Hatching a Plan
Austin's emerging culinary creative class is sharing talent and resources to find the right recipe for success
When former electrical engineer David Ansell began his soup delivery business in 2001, he worked out of his home kitchen. Like most people starting out in the food business with a good idea or recipe, that was all the overhead he could afford at first. The catch-22 most people face is that commercial kitchen space and equipment require a significant amount of up-front money, while bank loans or venture capital are almost impossible to come by when a product or business has no established track record. Ansell's idea of making soup from local, seasonal, organic ingredients and delivering it to customers on his bicycle caught on quickly. The need for more refrigerated storage forced him to look for a commercial kitchen almost immediately. He worked a few months in the downtown kitchen at Thai Passion that first season and spent the next year making soup at night in the kitchen at Lambert's on South Congress.
As Ansell's soup production grew, he kept his eye out for commercial space in South Austin. He was lucky enough to be first in line when an outfit called Easy Pickins folded and their space in a small strip center at West Mary and South First opened up. At that point, all he needed was funding to equip the kitchen and purchase supplies. "I was literally working on the business plan I would use to look for investment money when I noticed an envelope sticking up from the garbage can," Ansell recalls. "It was a promotion from a credit card company with a $20,000 credit line and convenience checks with a very low APR. I wrote the business account a check for $20,000 and within three weeks, the kitchen was equipped and we were making soup."
David Ansell is certainly not the first Austin entrepreneur to finance his dreams with credit cards, but it's a safe bet that many first-time small-business people don't have that kind of financing available to them. So just how does the talented cook with a wonderful recipe get over the first big hurdle to getting his or her product into the marketplace? Two years ago, it looked as though the local nonprofit Austin Community Development Corporation had come up with a solution to that problem. The CDC secured funding for a feasibility study to determine whether or not to create a local Food Entrepreneurship Center in East Austin. The facility was to include a commercial kitchen that could be shared on an as-needed basis, offices, and warehouse space. CDC also proposed to include such value-added attractions as training, technical assistance, financial- and business-planning advice, and the potential for access to capital. CDC enlisted the input of successful local food entrepreneurs and distributed Facility Needs Surveys to anyone potentially interested in using the proposed facility. Local response to the idea of a culinary business incubator was very enthusiastic.
Representatives of CDC reviewed all of the information and studied other similar programs in such cities as Denver and Portland before arriving at the conclusion that a Food Entrepreneurship Center was not a successful "mission match" for their agency. "Our stated mission is to promote economic vitality and job growth in low-income communities," said CDC Executive Director Margo Weisz, "and we came to the conclusion that the potential for job creation was not sufficiently robust to warrant CDC's involvement." Weisz went on to explain that in the models CDC studied around the country, most of the jobs created were low-paying, and that business growth often stalled at the point when new food products came up against competition with major national brands for distribution and retail space. "We're very disappointed about the results of the study, but the project just won't work for us," she concluded.
That brings us back to the original question about how Austin's potential culinary creative class can get their business projects off the ground. Food businesses are sharing space all over town. Some people work in restaurant kitchens (see "Red Hot Mama: Jill Lewis of Austin Slow Burn," p.46), other folks have turned their garages into a separate kitchen facility, and there are surely some working at home completely under the radar. Based on our visits to two busy commercial kitchens in the central city, they are doing it pretty much the same way that musicians, gamers, and filmmakers have done it: by pooling their talents and resources to nurture their various dreams to fruition. We found at least two supportive "nests," where new food businesses have the potential to hatch their own versions of Austin success stories.
David Ansell presides over a 1,000-square-foot commercial kitchen equipped with a large tilt skillet, stainless-steel tables, a commercial dishwasher, a four-burner cook-top, ovens, pot racks, a heavy-duty food processor, reach-in refrigerators, and a good-sized walk-in. In order to offset the costs of his rent and debt service, he leases kitchen space to two fledgling businesses. Eric and Martine Pelegrin prepare ptés and terrines under their Le Marseillaise banner, while Keith Wahrer and David Lawell make fresh energy bars they've dubbed Baraka Bars. During Ansell's most recent soup production season, from September 2003 to May 2004, the three entities were able to comfortably work around one another. The renters have the kitchen to themselves over the summer, while Ansell travels and works on his upcoming cookbook, Slow and Difficult Soup Recipes From the Soup Peddler, to be published by Ten Speed Press in 2005. Push may come to shove in the fall, however, especially when the Soup Peddler expands his delivery area to several inner-city neighborhoods north of the river. At that point, Ansell expects the kitchen will have fewer idle hours. Both the Pelegrins and the Baraka buddies have figured that deadline into their business plans.
The Soup Peddler Kitchen
Nice-born Eric Pelegrin was sous chef at Austin's beloved Chez Nous bistro for many years. There, he met and married the lovely Martine, and the pair moved on to pursue their dream of a small family business. "We went to the Westlake Farmers Market and fell in love with it," recalls Pelegrin. "We knew we wanted to have a booth to sell our ptés and terrines, just the way we would do it at home in France." The duo began looking for kitchen space and found Ansell through a list of commercial kitchens provided by the Sustainable Food Center. "David's kitchen was a block from our house, so we can walk to work it's great," says Pelegrin, adding that he and his wife were also attracted to Ansell's environmentally aware business sensibilities and his focus on fresh, local, organic foods. They rent by the hour. The business relationship appears to work well for both parties. Ansell says it's a bonus to have such an accomplished chef around for counsel, and Pelegrin acknowledges that he has received good business advice from his landlord. The Pelegrins spend anywhere from 12 to 15 hours a week in the kitchen preparing a full line of delicious authentic French country ptés and terrines, which they sell at the Westlake Farmers Market every Saturday morning. They also have long-range plans.
The Pelegrins have been invited to participate in a new Wednesday market in far North Austin on Pond Springs Road. They've also created a Roving Supper Club (see the "Food-o-File Event Menu," June 11) that will serve six-course French meals in different locations three weekends a month. Eric and Martine hope to raise enough money to finance their own dream, a small retail French-style charcuterie, where guests will sit at a few cafe tables, enjoying their ptés and fresh baguettes with affordable wines by the glass. Ansell supports them in their goals, saying "when you rent space to someone, the idea is to find a good business that plans to grow and eventually leave the nest." Ansell's other tenants have their eyes on flight some time soon, as well.
Partners Wahrer and Lawell operate the fresh vegan juice bar the Daily Juice on Barton Springs Road. They met David Ansell when all three appeared as panelists at a Green Fest discussion about environmentally sustainable small business. The partners had been producing a fresh energy bar in their tiny retail location but soon realized the demand for the bars outstripped their space. Now they produce two varieties of Baraka Bars (228-8521) in Ansell's South Austin kitchen. The bars are made with all-natural vegan ingredients, and are wrapped in corn husks. They are for sale locally at the Daily Juice, Ruta Maya, Cafe Mundi, Wheatsville Co-op, Eco-Wise, Bouldin Creek Coffee House, the Hideout, White Crane Pharmacy, and Whole Foods Markets. Wahrer and Lawell hope the Whole Foods connection will be their ticket to a successful niche market. They envision one day shipping frozen cases of their bars to Whole Foods outlets around the country. In the meantime, they are investigating outsourcing their production to a family member in Fort Worth by the fall.
When fall rolls around, David Ansell intends to double his soup production to 400 gallons a week and greatly increase his local distribution area. Ordering details will be on his Web site, www.souppeddler.com. Regarding the financial viability of his business, the Soup Peddler has this to say: "The first season, I was happy just to stave off starvation. The second year, it felt good to be able to take my girl out to dinner. This year, I made enough money to pay my employees and support myself over the summer break. This coming year, I'd like to be able to provide health insurance and pay the employees over the summer, too." The way Austinites have responded to Ansell's soups, there's no reason to think he won't be able to do just that.
The 2Dine4 Kitchen Stephen Shallcross and several of his childhood friends from Baton Rouge were partners in a catering business called Happy Foods from 1994 until 2001. For a time, they operated out of a cafeteria in a downtown office building and then shared space in the Mangia Pizza commissary kitchen before the partners went their separate ways. Shallcross struck out on his own as 2Dine4 (www.2dine4.com, 467-6600) and soon found the perfect home for his new venture. The 5,000-square-foot warehouse at 3008 Gonzales in central East Austin had housed the former wholesale Metropolitan Bakery. That meant there was already some existing plumbing in place as well as ovens and some other baking equipment available to purchase from the bankruptcy court. He paid around $225,000 for the building and seven surrounding lots. The warehouse needed plenty of cosmetic work and some additional equipment, but Shallcross and his staff took possession in December of 2001. Considering the seasonal profitability of the catering business, Shallcross soon subdivided the space and began looking for tenants to help with his mortgage payments.
Currently, 2Dine4 uses 2,000 square feet, and the remaining space is divided equally in 1,500-square-foot areas. "It made sense to find a baker because of the ovens, but we also hoped to find someone who could support themselves and provide baked goods for the catering business, as well," he explains. Because there is so much space available in the Gonzales Street warehouse, Shallcross was less concerned about finding businesses that would grow and leave than he was about creating a synergy where everyone would support one another. With his current lineup, he appears to have done just that. In addition to 2Dine4, the warehouse is now home to the production facilities for confectioners Dr. Chocolate, a soup- and salad-delivery business called SoupaDupa, Mary Louise Butter's Brownies, and Pavlos Cookies.
After relocating his retail operation from North Lamar to 1715 W. 35th in early January of 2004, Dr. Chocolate owner Glen Scott was pleased to find affordable warehouse space in the central city for his production facility. In his well-insulated section of the Gonzales Street warehouse, floor-model tempering machines keep chocolate melted at all times, and the temperature remains a balmy 72 degrees. Scott's staff varies from three to 15, depending on the season, and the new facility provides plenty of space in which to create the chocolate specialties for which Dr. Chocolate is locally famous. Shallcross has contracted to use many Dr. Chocolate products in his catering business, and Scott hopes that a wholesale baker will eventually move in and whip up some glamorous chocolate dessert products that he can showcase in his retail operation across town. It's a good fit all around.
Soup maker Tammy Starling began working in the warehouse kitchen in the fall of 2003. She makes soup on Mondays and packs and delivers it to customers in Hyde Park on Tuesdays, first by herself and then with a little help from her friends. "Stephen rarely has catering jobs on Mondays, and even when he does, it's easy for me to work around his staff," Starling says. This summer, she's expanded the offerings of SoupaDupa (www.soupadupa.com) to include fresh salads to go with her vegetarian soups, and her customers are eating them right up. Starling's immediate goal is to increase her average production of 35 to 50 quarts of soup each week and build up a clientele big enough to provide her complete support and enable her to pay some employees. It will be interesting during the coming year to see just how many soup consumers there actually are in the core of the city.
Mary Louise Butters shows up at the Gonzales Street kitchen on Wednesdays to bake her incredibly intense and delicious brownies and comes back on Thursdays to pack them up and deliver them to retail outlets around the city. Baking is an artistic calling she couldn't resist. A few years back, she quit her day job to stay home and create fiber art and signature quilts, but slow sales made her realize "people don't get hungry for art as often as they should." Butters' friends encouraged her to build a business around the great brownie recipe she'd been given by local legend John Henry Faulk and his wife, Liz. Butters took the dare. These days, she bakes eight different flavors of chocolate brownies (922-0342) and sells them at Eco-Wise, Therapy, Ruta Maya, Shag, Hill Country Weavers, Little City, Breed & Co., Gardens, Pacha, Northwest Hills Pharmacy, Trianon, and the Downtown Farmers' Market. Butters' brownies are intense, and they are also expensive, so she's not looking to place them just anywhere. "It's a $4 brownie, and very much worth it, but they sell best in upscale shops and salons," she reports. "That kind of place can't seem to keep them in stock." Butters has new flavors in development and will soon market the tasty trimmings of her chocolate delights, known as Brownie Butts.
Greek cookie entrepreneur Pavlos Zarkos has great admiration for the marketing genius who sold twice-baked Italian biscotti to the American public. He just wishes he could be as successful educating the American palate about his Paximadi cookies, made from an ancient recipe from the island of Crete. Paximadi are long and narrow, not unlike biscotti, but they are much more the texture of crisp shortbread than dense biscuits. They are munchable and dunkable. Zarkos' company began baking several flavors of Paximadi at the Gonzales Street kitchen in September of 2003, and he already sees expansion on the horizon. "We're in several coffee shops as well as 21 Whole Foods Markets in seven states now," he says. "We're negotiating with other distributors to get us into cities in the Southern U.S." He's still putting money back into the business at this point, but expects to have a salary and paid employees within the year. He's already scouting potential locations for his own production facility for when that day comes.
The tenants at 3008 Gonzales are not the only ones with big dreams. Shallcross and company have planted a garden in front of the kitchen, and they would ultimately like to develop some of the contiguous lots into an outdoor cooking and teaching facility that could also be used as an event venue for weddings and parties. All in due time. For the moment, Shallcross wants to position 2Dine4 in the upper echelon of local caterers. He's well on his way, after feeding thousands at the 2003 Junior League of Austin Christmas Affair and two trips to Northern California to entertain guests at the ATT Pebble Beach National Pro-Am golf tournament. Creating synergistic relationships with his warehouse tenants is an important part of his master plan.