Getting into the spirit isn't easy
After becoming a casualty of the tech bust, Paula Angerstein was eager to reinvigorate her professional life with a new career in the liquor industry.
During her travels to Italy, Angerstein discovered the pride that Italians had in their homegrown products.
"I wanted to bring that type of product to Austin with something that folks here could call their own, and know it was made with local pride," Angerstein says.
The result: Angerstein is squeezing the Austin liquor market with a new twist on alcohol. Her creations, Paula's Texas Lemon and Paula's Texas Orange, are homegrown citrus liqueurs that have quickly made a splash here.
But it hasn't been all sunshine for the three-year-old business. She discovered early on that having the idea for a business was the easy part of the recipe. One of the most difficult aspects of having an alcohol-based business was getting all of the approvals and licenses that are required.
"Dealing with all the regulations as a first-timer was harder than I thought it would be," Angerstein says. "But more importantly, it took longer than I thought because [regulators] are very detail-oriented, and it seemed like we were constantly going back and redoing things."
Regulations slowed Angerstein in many ways, but also sped up some timelines. For example, health code regulations prompted Angerstein to move her operation earlier than expected, forcing her to absorb extra costs prior to her product launch.
Angerstein and others in the industry say there are an untold number of rules under which alcohol-oriented businesses must operate, and they don't all come from the Texas Alcoholic Beverage Commission. Cities, counties and the federal government all have regulations of which Angerstein and her peers must be aware -- and those rules regulate almost everything, from how a product is made to how it is marketed.
"When it comes to compliance, you end up relying a lot on others telling you, 'No, you can't do that,'" she says. "Luckily, TABC knows that not everybody can know all the rules, so there is some leniency -- they probably won't yank your license for a small mistake."
TABC spokeswoman Carolyn Beck says the agency has taken several steps in recent years toward being more business-friendly. TABC's Web site, for example, contains several relatively new areas that help business owners interact with the agency. And because the state's Sunset Advisory Commission has wrapped up its evaluation of the agency, more changes at the TABC are expected in the coming year -- many are intended to remove some regulatory burdens and fees. Beck recommends that anyone starting an alcohol-oriented business start by visiting the TABC's Web site.
According to the TABC, the first step in creating your own beverage is to receive a distiller's license. Fewer than a dozen businesses -- including Angerstein's and Tito's Handmade Vodka, in Austin -- have ever received such a license. Representatives of Tito's say it was difficult to obtain the first license, but Angerstein says the path has been cut and now it's easier for other alcohol makers like her to follow.
"There is a path, but it's by no means a paved highway," she says.
The regulatory processes are much easier and more refined for retailers. Thousands of retail licenses have been awarded over the decades, and there are even consultants who specialize in helping new bar or liquor-store owners.
Once legal, Angerstein could begin doing what she set out to do: make great liqueur. To sell her product though, she would need a wholesale distributor to get it onto shelves.
Angerstein worked her product's way into the market via Twin Liquors, which was the first to agree to carry it. Executives at Twin Liquors subsequently helped her land a meeting with their distributor, Republic Beverage, which opened the doors of opportunity even wider.
Now that Angerstein's business is established, she says her biggest challenge
relates to marketing.
"The toughest thing is reaching people with limited marketing dollars ... especially when we have to compete with the big guys ... who are mostly about marketing now and less about their product."
Angerstein says sales are strong in Austin -- so much so that she doubled her first-year revenue last year -- but there is much work to do in Dallas and Houston.
"We've done well here because I understand this market well," she says. "It's been a lot tougher to get people in Houston and Dallas to give our product a try. It's frustrating, because the product sells itself but it's hard to get to even that point because we're a small outfit that can't do a lot of marketing."
Preston Rhone contributed to this article.