Dear Client:
Dogfish Head co-founder Sam Calagione recently sat down with InsideHook for a wide-ranging interview that covered the beginnings of the brewery, the future of it and everything in between.
As you all know, Sam has been in this industry a sweet while, recounting how he started writing a business plan for Dogfish Head in the early 90’s at age 24 and raised $220,000 to get the brewery started.
With Dogfish Head debuting in 1995, Sam says he thinks that places them in “second-gen craft movement,” putting them behind brewers like Sierra Nevada and Sam Adams, and in line with craft companies like Stone Brewing and Bell’s Brewery.
YA KNOW, THOSE WERE DIFFERENT TIMES… Though other craft breweries came before Dogfish Head, Sam notes that they were “the first commercial brewery to introduce culinary ingredients into craft beer” – something that most craft brewers do now – “but in the mid-’90s, it was not cool,” he said.
“People thought we were assholes and heretics for putting coffee in beers or fruit in IPAs, so for three years we were on the brink of bankruptcy,” Sam added.
But around the turn of the millennium things started to change. “The English patriarch of beer,” Michael Jackson, showed them some love in 1999 with “a really nice story” on how Dogfish Head was “reviving the ancient traditions of brewing, where brewers could be creative about what goes into their beer,” and helped open people’s perspective.
Then around that same time, Dogfish Head released Midas Touch and the first Imperial IPA in the U.S. with 90 Minute IPA, “and we started getting some recognition beyond coastal Delaware,” Sam said.
And pretty soon, this little brewery out of Milton, Delaware that was on the verge of bankruptcy, turned into a brewer that was collaborating with big name musicians, a brewer that owned its own hotel, a brewer that had enough financial sustainability to give back and work with environmental groups, and a brewer that joined forces with one of the largest craft companies out there, Boston Beer, as the interview pointed out.
HOW THEY FOUND A FIT INSIDE BOSTON BEER. Asked about why Dogfish Head merged with Boston Beer, Sam explained it like so…
“We were like, shit’s getting real. Little breweries are opening up everywhere — it went from a brewery opening every week to two breweries opening every day. It’s not sustainable! And seltzers and cocktails were growing faster than craft beer. And with so many local breweries, we were losing volume further from home. So our options were to go into debt and hire sales people and compete with Coors and Bud, or contract and fire a bunch of people. Or we could merge with a like-minded American craft brewery.”
Enter Boston Beer and Jim Koch. Sam recalled how he was introduced to Jim through a collaboration with Boston Beer for a SAVOR festival many years ago, and he could tell then that they “had a lot in common.” So “the cultural overlap was a big part of our decision to merge,” he said, adding that they “work well together: Dogfish is strong in sours, IPAs and distilled spirits, and Boston Beer is strong with lagers, seltzers, Twisted Tea and cider.”
Questioned on whether the merger brings about “some worries” on where the craft industry is going, Sam responded that he “wouldn’t use the word worried – we’re excited to keep over-indexing our focus on beer, even though it’s not the biggest thing we make anymore. By volume, we sell more Truly and Twisted Tea, but we are the Boston Beer Company. Seltzer has been around 10 years, beer’s been around for 10,000. Beer will be back. So let’s focus on innovation in the beer space after IPAs.”
BEYOND BEER BOTH AN “OPPORTUNITY” AND A “NECESSITY.” Sam admits, however, that companies cannot simply focus on beer nowadays to remain relevant. He considers things like spirits (a space they’ve been in for decades now), as well as RTDs and non-alcs (spaces they more recently entered into), to be both opportunities and necessities in today’s landscape.
“It’s an opportunity to flex our creative muscles and innovate in new and exciting areas. It’s also a necessity in the fact that to remain relevant, we must give the drinkers what they want, and that often means expanding our list of offerings into tangential but still off-centered areas,” Sam said. “Today’s younger consumers are looking for diversity and bold flavors and our portfolio needs to deliver on both. And I’ve always thought of Dogfish Head as a beverage and food company, not just a beer company.”
SO, WHAT’S THE NEXT AREA OF FOCUS FOR DOGFISH HEAD? But within beer, what’s next for Dogfish Head?
Fruited sours for starters, Sam said and explained why: “It’s not bitter like an IPA, and it can appeal to a margarita drinker or a Pinot Grigio drinker.” He added that they’re “bullish on sours” and that’s “part of the reason” why they recently opened their new outpost in Miami, noting that they’ve got “a partnership with the University of Florida College of Agricultural and Life Sciences” where they’ll explore “experimental fruit.”
Until Monday,
Harry, Jenn and Jordan
“Then, I’ll just regress, because I feel I made myself perfectly redundant.”
– Charlie Kelly
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