Sam Calagione is the founder of Dogfish Head Craft Brewery, one of the hottest breweries in the entire nation. Dogfish Head ranks 14th on the Brewers Association’s list of Top 50 U.S. Craft Brewers based on beer sales volume. In May, Calagione won the James Beard Award for the Outstanding Wine, Spirits or Beer Professional of the Year, after being nominated in the category seven consecutive years. But many years before the accolades and the awards, Calagione took his company to the next level with a strategy that nearly all other entrepreneurs would balk at.
Sam opened Dogfish Head Brewery in Milton, Delaware way back in 1995 when the term “craft brewery” was not in the basic vocabulary of the regular Joe, let alone a popular business. In 2003, Dogfish Head created 60 Minute IPA, which became an immediate success. Sam noticed all of the massive sales and demand for 60 Minute IPA and was excited, but he was also concerned. His #1 beer could have easily constituted up to 80% of Dogfish Head’s sales, but Sam had the discipline and foresight to see that having a popular brew is great, but in the long run, it could hurt his business as a whole. So in 2005, Calagione decided that he would not allow his #1 beer by far would never to surpass 50% of all Dogfish Head sales. While nearly any other brewery would covet having just one beer as popular as 60 Minute IPA, Sam saw the negative of being dependant on one variety of beer. Sam didn’t want Dogfish to be known only for 60 Minute IPA because nobody would know about its other beers. Sam knew about how beer fads come and go and what if fickle drinkers lost interest in IPAs, they would look for another beer after they were over IPAs.
At first, this was not a welcome decision. Distributors and retailers and complained immediately. “I have customers walking into my store trying to buy your 60 Minute IPA and then yelling at me for not having it stocked,” a local liquor store owner told Calagione. “Then they’re leaving without buying anything. I’m a local entrepreneur, you’re a local entrepreneur — can’t you help me?”
Even the Dogfish sales team worried about straining relationships with the people and businesses who helped put 60 Minute IPA on the map. “It gave us a pretty unique soapbox to stand on in a crowded marketplace. We can say, ‘We want to stand for something different,’” Calagione said. Despite the temptation of money, Calagione turned down sales for several years. An unthinkable move for a burgeoning business.
Dogfish offered free hats for customers at local liquor stores who bought their other beers. Calagione persuaded Amtrak to carry 90 Minute IPA, a boozy 9 percent alcohol by volume older brother of 60 Minute IPA. Amtrack is now the beer’s largest buyer. Dogfish Head Brewery grew nearly 400% between 2003 and 2006. Now Dogfish Head Brewey employs over 250 workers. Calagione opened a brewery and Dogfish-themed hotel. And the future for Dogfish Head is bright because of the marketing strategies set by Calagione as well as people shying away from big beer. A report from Goldman Sachs shows that big beer companies are losing customers, especially millennials. A study of 10,000 drinkers in the U.S. found that 57% of millennials were weekly craft beer drinkers.
To this day, 60 Minute IPA is still Dogfish’s most popular beer, with 43% of Dogfish’s sales. However, because of the difficult manuevers in the past eight years, three of its top five beers are new creations. “One or two of them could overtake 60 Minute in the next five to ten years,” Calagione said. Something that he’s been working tirelessly at.