Setbacks don't dampen spirits of vodka-making brothers in Dripping Springs, Texas


by By KAREN BROOKS / The Dallas Morning News

Posted on August 15, 2009 at 4:38 PM

Updated Tuesday, Oct 20 at 3:15 PM

DRIPPING SPRINGS, Texas - A pair of brothers from Dallas is learning that vodka is a dangerous business - and not because of one-too-many New Year's Eve shots.

The Kelleher brothers will celebrate survival and renewal this New Year's, grateful that their Dripping Springs Vodka distillery limped through a holiday season of tragedy and devastation wrought by fire.

By mid-January, they hope to have their family business, San Luis Spirits - operating less than two years - back up to 100 percent, shipping 3,400 cases a month into a market increasingly thirsty for Texan spirits.

But they look ruefully on the past 20 months, with two fires, and a flood during the epic rains of 2007, and wonder what else they'll have to overcome in order to make vodka, as their great-great-great-grandparents did.

"You can only do the phoenix act so many times," said Kevin Kelleher, who co-owns and runs the company with his brother, Gary.

Their little office on a tiny piece of tree-covered property looks more like a campsite than the place an award-winning vodka is made. A few yards away, a huge pile of charred copper and burnt wood and twisted metal is surrounded by a fence and police tape.

Kevin Kelleher calls it "the bomb site." It used to be the heart and soul of their operation, with six copper stills designed by Gary Kelleher himself and built in the Hill Country.

On Nov. 7, a contractor was inside the metal building that holds all six stills when hot vapors ignited and the building exploded. The stills rocketed through the roof, and the worker went to the Brooke Army Medical Center with second- and third-degree burns, according to reports.

The Kellehers, citing potential litigation and the investigation, declined to comment specifically on the explosion, other than to describe its effects on their business. The fire is being investigated as an accident.

Production stopped immediately; at least 5,000 cases - and perhaps much more, given the holiday season - that normally would have been made and shipped were lost.

Three weeks later, two new stills were up and running in a temporary spot a few steps away from the original site, fenced off and in the open air.

But it took six more weeks for the first new bottle of Dripping Springs Vodka to be sealed and sent down the line. The brothers hope to be up to full production by mid-January. After that, they plan to move to a new site altogether, up the road in an old granite-cutting factory.

Gary Kelleher had the idea to bring back the family tradition of vodka-making in 2005, and his brothers Kevin and Tim had just sold their international consulting business.

Tito's, a popular Austin brand, had gotten national and international acclaim as the first Texas vodka, so the Kellehers have faced tough competition from the beginning.

Apparently, the idea of distilling vodka was an acquired taste for Kevin Kelleher. In spite of some initial skepticism, he and his wife, Susan - who says the fires gave her pause about continuing the business - moved from San Luis Obispo, Calif., to Dripping Springs. He put his life savings into the new business.

The distillery was up and running in May 2007.

In its third month of operation, with two copper stills running and a market limited to Austin, San Antonio and South Texas, the company's only building and everything inside it went up in smoke.

Gary Kelleher was distilling vodka into five-gallon glass jars that were built not to explode - but one of them did, igniting propane pipes underneath them.

He was unhurt, but everything burned. The office, the bottling operation, both stills.

It took three months to get running again.

Then, a year later, in September, Dripping Springs Vodka won the Vodka Purity Trophy at the International Wine and Spirits Competition in Surrey, England - an award that hasn't been given to anyone since 1987.

It was a vindication of sorts: proof, if you will, that the brothers were meant to carry on the tradition of their German forebears. And they proudly display the trophy in their office, in full view of the latest "bomb site" outside the windows.

What amazes the Kellehers most is that their stubborn refusal to give up is mirrored in others who have a stake in the operation and stay with them while they literally rise from the ashes. Twice.

"They're good people, and they keep battling back from their adversities," said liquor distributor Bud Luckett, adding that he has faith not only in the brothers but in the product. "Maybe they should change their name to Phoenix Vodka."