Young entrepreneur turning lemons into a sweet success
SALEM - When life handed him lemons, Phil Mastroianni went to the New Hampshire Liquor Commission.
Launching his Salem-based company, Fabrizia Spirits, five years ago was no easy ride for Mastroianni, who began as a 25-year-old accountant with a dream of producing traditional Italian limoncello for the masses.
"I started out making small batches for fun," he said. During a visit with relatives in Calabria, Italy, Mastroianni learned of an old family recipe for the lemony libation.
Upon his return to the States, he tried making a few small batches on a whim, serving his Uncle Joe a glass during a holiday dinner.
"He loved it," Mastroianni said with a grin. "That's when I realized this could become a business."
Taking a huge leap of faith, Mastroianni kept his day job, but also began seeking a place to produce his product in Massachusetts. But he was taken aback when he learned of the start-up costs.
"I was told I'd need $10,000 just to get my manufacturing license," Mastroianni said. "We would have had to sell a thousand cases of the stuff just to pay that fee alone."
Venturing over the border, he found the Granite State somewhat more welcoming to new businesses, with annual licensing fees set at $1,700.
"It was a no-brainer," he said with a laugh. "Coming to Salem was the best thing I've ever done."
In the early days, lemons were peeled by the bushel in his parent's Newton, Mass., garage, then driven to Fabrizia Spirits' headquarters at 2 Industrial Drive.
The first batch of 800 bottles was bottled by hand, with Mastroianni, his brother, Nick, and a former business partner scrapping together $15,000 to get started.
He cashed in his paltry 401(k), emptied his savings account and took cash advances on his credit cards to begin regular production of the all-natural liqueur.
While Mastroianni had obtained the permits to manufacture the product, he didn't know the first thing about navigating the complex wine and spirits industry. He attempted to break into the highly competitive Massachusetts and Rhode Island markets, which proved nearly impossible.
That all changed when he called Rick Gerrish, who at the time was the spirits buyer for the New Hampshire Liquor Commission.
"He told me exactly what I needed to do," Mastroianni said. "And he met with me right away."
Learning how greatly New Hampshire's state-controlled liquor and wine distribution model differed from other states, Mastroianni agreed to place his products in 40 of the state's 77 liquor stores on a six-month trial basis.
"I began traveling from store to store, promoting the product," he said. "It was finally time to quit my day job."
Gerrish said New Hampshire is a unique place for selling and producing liquor because both the large, corporate companies and the small start-up business are required to go through the same process.
"I was impressed by (Mastroianni's) passion, even after I told him what he was up against," Gerrish said.
Within six months, Fabrizia Spirits exceeded its sales goals. These days its Limoncello is the second top-selling one in the entire state, exceeded only by global best seller Bellini.
The beverage earned a gold medal at the 2012 San Francisco International Spirit competition.
Fabrizia Spirits are now sold in 11 states, and Mastroianni said he plans to add several more states by fall.
The company has two employees, though seasonal fluctuations require hiring several additional workers in preparation for the holiday season.
Mastroianni said he hopes to hire more workers as the company grows. Just last fall, the company released a new product, Blood Orange Liquor, with much market success.
The distillery produces up to 3,000 bottles a week.
Project sales for 2013 are between 70,000 to 80,000 bottles - nearly doubling from 2012's 40,000 bottles sold.
With a steady history of increasing sales, Mastroianni said his days at the current site may be numbered, but one thing is certain.
"I'm staying in New Hampshire," he said. "Preferably, I'll be staying in Salem."