Sud Savant: Dogfish Head Founder and President Sam Calagione Talks Beer With

You read right, kids.  I had the insane privilege of stealing some of Sam Calagione’s time and chatting about some recent happenings with his company.  For those not yet familiar, Sam is the Founder and President of Dogfish Head, a Delaware brewery that needs no introduction in craft beer circles.  DFH makes “off centered brews for off centered people,” since 1995 and takes great pride to incorporate extremely unusual ingredients not found in our modern conception of beer.

I actually got so excited that I forgot to start recording the call right away (I’m not sure if the shaking was the 12 ounces of espresso I had just ingested or just nerves).  Just know that there was some small talk and Sam must have sensed that there were some questions on the horizon about curtailing distribution, because he started talking about it almost right away.  From where I started recording, this is our conversation.  Enjoy!  I know I sure as hell did.

Sud Savant:  You’re not the only brewery that has been forced to curtail distribution.  Recently, you’ve announced plans for another 3 year, $45mil expansion effort to take place to help remedy that.

Sam Calagione: Yeah, somewhere around that big dollar amount between $40-$50 million depending on what we put in.  The goal is that we look at our whole footprint of our Delaware production facility and said, “OK, let’s start being smarter about our growth and really put together a plan to maximize how many barrels we can get out of that facility.  In other words, we’ve lived through (very luckily) the three years of 40, 50 60% growth and now that we’re about 145,000 barrels this year, going that fast is too hard, too painful, beats us all up as coworkers.  It’s unsustainable growth for us.  We don’t want to have an IPO.  We don’t want to take venture capital money.  We don’t want to sell out to a big brewery.  So we learned that about 20% growth, for right now, is the manageable number.   We’ll grow by 20% this year, grow about 20% next year, and who knows after that.

SS:  Are you worried at all about getting back into the markets you’ve left?  Other taps are going to hop in those spots in the meantime, right?

SC: We’re all about collaboration when it comes to energy on competition.  Yeah, we had to pull out of some states, but we’re hopeful that those spots vacated will be taken by small, “indie” craft breweries.  And then when we’re ready to go back in those markets that the customers will welcome us back, though it’s never easy to pull out of markets, by any means.

SS:  Absolutely.  You’ve a fantastic web presence with Twitter, Facebook, Blogfish, etc.  Do you think that involvement with your customers, even though you’re taking a hiatus from the area, will help you re-enter those communities a little more easily.

SC:  Yes.  It’s kind of painful.  My wife Mariah does all our social media.  We’re proud for all of our coworkers when Dogfish is celebrated for doing something great or making great beer, but then the flipside is that when we are criticized we take that equally personally on behalf of our coworkers.  Through Facebook, Twitter, and, we think we did a very professional job in explaining to customers why we’re pulling out of markets and which markets we’re pulled out of.  But you still get the harsh criticism, “Oh, if you guys knew how to run a business, you wouldn’t have to pull out of markets.”  So that process was painful, but it was at least an honest and open dialogue with the consumers, which you never really see the big breweries have, frankly.

SS:  Correct.  There’s a lot of blog and forum traffic about “When are we going to get DFH in our area?” or “Why are you pulling out?”  You’ve answered that in several places.  For those folks who might still be confused as why Florida has DFH, but Rhode Island does not, is it a “first-come, first-serve type policy?”  I’m assuming there are some economics that take precedence there, as well?

SC: Yeah, and obviously it wasn’t any of our very close markets, but it wasn’t out furthest geographic market.  There were some strategic components beyond just straight geography, but I’ll just leave it at that.

SSHa! Fair enough.  Switching gears and talking about community again, you guys have a great brand community in addition to your web presence and it often revolves around creating conversations: hotel partnerships, franchising pubs, modern art in both your label art and of course the tree house, books, film festivals, canoe trips… do you feel you might ever stretch DFH a little too thin one day or do you think that those activities are more essential to cultivating interest in the brand behind the beer?

SC:  We want to keep innovating and pushing the envelope, but we really do look at brewing as an art in liquid form.  So we love collaborating with and cross-promoting other creative, artistic companies or people that we believe in.  For instance, a rock & roll artist like Tara McPherson, or musicians like Jon Langford and Will Oldham and all that cross pollination with the world of art inspires us to innovate even further.  It’s an integral component to what DFH is all about as a brand.  Stretched too thin?  We feel it sometimes.  Right now, we’ve got a billion projects going on…

SS:  Yes, you do!

SC:  We just did our first “Analog-A-Go-Go,” a festival we hosted that’s a celebration of the process between beer lovers and music lovers.  In addition to our ongoing bocce tournaments and Off-Centered Film Fest, we’ve got a lot going on but we’ll know when we’re stretched too thin and hopefully add talented people to our team to let us keep doing all these projects.  Really, other than these events, our social media, and, the only place we advertise is a few beer publications.  That’s all we do.  We’re not big proponents of old school advertising and marketing.

SS: Good to hear.  It also appears that community involvement breeds more and more collaboration all the time.  You’ve brewed with 3 Floyds, Stone, Victory, Epic, the recently announced Short’s Brewery out of Michigan, and of course Sierra Nevada.  It was also recently announced that a new batch of “Life & Limb” will be coming out called “Life & Limb II.”

SC: Ken Grossman (Sierra Nevada co-founder) just emailed me a picture of pallets and pallets of Life & Limb going out the doors, so I was psyched to see that.

SS:  Nice!  There are a few questions that it has spawned. Usually the “2” after the name indicates a different recipe.  Is there a different recipe, a variation on a theme, or the same thing, but new batch?

SC: We thought the maple was a touch too forward in the last batch.  So while the birch and the roastiness will still be there, and the maple will be as well, we turned down the maple by maybe 10%.  Just a hair less maple-centric and a little more roasty.

SS: I can’t wait to try it!  Do you look for this to become a trend or an annual thing with Sierra Nevada?

SC: Well, we did it two years ago.  I’d love to potentially do Life & Limb every other year.  It’s a beer that Ken & I got together with the idea of making beer that would last, and could have the legs, to still taste wonderful when both of our kids were 21 years old.  The idea was imagined at the GABF.  My daughter right now is 8 years old, say “OK, imagine her at a GABF in twelve years going over to the Sierra booth, seeing his son & daughter, then splitting a beer that was brewed that many years ago, talking about the old days of craft brewing. “  It’s really a testament to our goals to keep both our breweries as family companies.

SS Excellent. Because there is “Life & Limb II” is there also going to be “Limb & Life II”?

SC: We did do a small batch!  I don’t know if we’re going to call it “Limb & Life II” because that one was a bigger departure from the original recipe of the small beer that we made up.  Like the original one, this one was made off of the second running of the beer, but it will have a teeny, tiny bit of distribution.

Another one that I should mention, that I did recently and should hit the market in a month or so, is a collaboration with The Bruery, a great little brewery in Orange County, California.  We brewed a beer together that still has yet to be named, but the profits will be going to a Japanese craft brewers’ relief fund.

SSTa Henket, introduced late last year, has been receiving tons of press: Brew Masters and, I was pleased to see as a subscriber, Smithsonian Magazine had a very nice write up for DFH.

SC:  We’re very proud of that one.  It’s definitely a good chance to talk about the world of craft beer with a different crowd than usual.

SS: I imagine so! With all the good press are there any plans to roll with that momentum for a larger release?  The latest I could find on said that it was not on the schedule for 2011.

SC:  Yeah!  I don’t know what exactly is on the schedule, but we are planning on getting a batch of that out this year, maybe Octoberish or so.

SS: (Yes!)

SC: We’re really proud of that beer and it will be made, fermented, with yeast that we captured from the night air in Cairo, which is a pretty unique component to have in a beer.

SSI think people will really be excited to hear that news.  Now, you’ve got the creative thinking and independent personality that would seem to make it easy to not only imagine new things, but also to put them into action.  Is there anything that you would have loved to do, but has not come to fruition?

SC: We’re really proud of our spirits.  We have a tiny little distillery within the walls of our restaurant in Rehoboth and Allison our Distillery Manager just does a fantastic job making our gins and rums and vodkas.  I would say something that is on the immediate horizon, but we have yet to be able to throw our resources towards (but really want to & need to) is making a bigger distillery.  It’s out on the horizon and something we’re excited about, but there are other projects between that and today, though we’ll get to it soon.

SSYou mentioned resources, is that what’s holding it back I imagine: The massive expansion and just trying to satisfy existing market demands?

SC: Exactly.   We don’t want to go way further than that, like I mentioned earlier.  We don’t want to take to have to take in outside money.  We can do this all on our own by cashflow with our existing bank debt plan.  We gotta walk, but we can’t run and that’s the way it’s supposed to be.

SSSort of an off the wall question, is there any is there anything that you were too embarrassed to take to the R&D folks and maybe you just brewed a little batch at home first, just to make sure?

SC: No.  You know, because I am the R&D folks.  I don’t really have to ask for approval to do what I can do, which is kind of nice about being the president and founder of the company.  It’s usually me saying “Hey, let’s do this whacked out thing,” and inviting one of the brewers to come down to the pub and brew it with me.  So I’m not the one saying, “Let’s not do this.”  I’m the one convincing everyone to do it, often times.  For the most part, everyone that works here is just as excited as I am to be focused on brewing beers that have never been brewed before.  You know that’s kind of our niche, the “off-centered ales.”   I think we’re all equally proud about that.

SSTrust me; it’s exciting as well for those of us that don’t work there.  A question that’s a little less fun: DFH has experienced some turnover at some pretty key positions – brewmaster, head brewer, asst brewmaster, etc.  Are you at all worried about the quality of DFH beer, given that the recent departures were some pretty proven talent?

SC:  Yeah, they were great guys, but no.  Actually, I’m really excited for the future.  Our new Brewmaster and Brewery Ops Director, we’ve been working with them via email, but they both start their first day in the brewery this coming Tuesday.  They’re super talented people with experience at much bigger companies, bigger breweries, that can help us grow.  We already have all the awesome brewers that have already been here that, like me, come from more of the homebrewing and craftbrewing scene.  These guys that are joining us have bigger production experience, so I’m sure we’re going to be able to shape some innovation and creativity, which we always have, but bring it up to a new level in terms of quality and consistency.

SSYou’re referring to Tim Hawn and Patrick Staggs?

SC: Yup.

SSDFH takes a lot of pride, obviously in being “off-centered.”  Are you concerned with any negative backlash to DFH image from hiring, what some might consider, part of the macrobrew crowd?

SC: In our brewmaster’s case, yes, Tim comes from the Miller/Coors world, but his facility was all about the Blue Moon brand.  While I wouldn’t call Blue moon craft beer, I would say that it’s definitely more flavorful and uses more exotic ingredients than the industrial lager that Coors/Miller is mostly known for.  So he has great experience there.  He used to work at James Paige Brewing.  He’s worked at a malt house.  It’s not just the big brewery experience that he brings to the table.  Patrick, sure he oversaw the making packaging of Dr. Pepper and Snapple, but he’s a passionate beer geek and very competent brewer.  These are guys who came to our world because they love what we’re doing and their goal isn’t to make what DFH is more like the big companies they come from.  Their job is to take what is great about these other companies and to apply it to the innovation and creativity that we’ll continue to champion at Dogfish.

SS: Yes, hopefully their expertise will lend itself incredibly well to DFH as it continues to grow.  Another less fun question, there has been a lot of legislation happening in different states regarding craft brewing, distributing, and licensing.  Do you have any take on it?  Does DFH have any “battle plans” drawn up for if/when the fight comes to Delaware?  You’re obviously no stranger to effecting legislation.

SC: I’m on the Board of the Brewers Association, our trade group, which represents the vast majority of the American craft brewers.  We’re very active, and more active every day, in federal and state legislative matters that effect small breweries.  I think you see a trend of more of these battles happening on the state level than the federal lever and that’s why each state’s craft brew “guilds” are very critical.  Toward that end, we just began the Dogfish state guild and just had the first meeting with the majority of Delaware craft brewers here in Milton, DE last week.  We had our congressman come in for the meeting!  Small brewers have to be active politically in order to protect our rights.  Let’s face it.  The consolidation of the giant brewers, the consolidation of the giant retailers, and the consolidation of the giant distributers, is only going to become more threatening to craft breweries.  Our solidarity and voice in Washington and the state capitals is critical to our long term success.

SS: Absolutely.  Now for something completely different.  How have Coco Loco and T’weasonal been received at the brewpub?

SC: Oh, wow, you even know about our specialties!  The Coco Loco, brewed by our great brewer Chris, is fantastic!  It’s just a great tropical tasting, tropical, great hot weather beer.  The T’weasonal, we brewed that about a month ago… did you see the link to the NY Times about that?

SSOh yeah!  With the cinemagraphs?  Very cool stuff.

SC: Yeah, that was a neat way to tell the story.  We’re really pleased with that.  The beer, pre-carbonation, tasted fantastic!  But I’ll get to taste the carbonated tonight because it goes on tap today at noon, so I’m going to go down there to try it.  Anybody, when they come to this area, I definitely recommend stopping by our Rehoboth Brew Pub.  We don’t do any focus groups or taped outside consultants or marketing.  We decide what beers we’re going to roll out for full distribution just by using our pub, the regulars, and people who come from across the country to drink there.  They’re either saying, “Hell yeah!  That one’s great!  You should brew more of that one,” or we can just watch how quickly the test batches are going to know which beers people are super excited about.

SS:  You live in Delaware.  You play hockey.  You’re surrounded by hockey. Bruins, Islanders, Devils, Rangers, even the now-moved Whalers.  Do you have a favorite team up there?

SC: I grew up in western Mass, kind of by the Vermont border.  I grew up watching the Bruins!  I feel horrible and elated at the same moment, because I didn’t get to watch hardly any professional hockey this year, but am stoked that the Bruins took the cup.  I still play.  DFH sponsors the team and both myself and the restaurant GM/brewer, Jason, both play on the DFH adult team, which is pretty competitive, A-League adult hockey.  I’m still very into playing it, but I don’t really have the time to watch it anymore.

SSIf it’s any consolation, you picked the right one.  Playing over watching, that is.

SC: Agreed

SSSam, I can’t tell how excited I’ve been all week for this interview.  It has been a huge honor just to grab a few minutes with you on the phone.  Thank you so much for your time and for answering a lot of goofy questions by a goofy kid in Illinois.  I love the face and voice you’ve given to craft beer and to independent thinking, unique, well, off-centered and off-the-wall people.

SC:  Well, thank you.  We’ll keep putting the “ware” in Delaware and the “mental” in experimental.  Have a great holiday weekend.

SS:  You too, sir.  Cheers.

Joel R. Kolander is the Cheif Blogger for Sud Savant, a beer-savoring blog for the rest of us. We’re not here to get plowed. We’re not here because we are world-famous beer critics. We’re here because we enjoy savoring a great beer with even better friends. Sharing great beer is just as amazing as finding it in the first place. Lets share!