Found this article in the business section of the News Journal this morning.
Dogfish Head top dog among craft brewers
Milton operation expands to meet ever-growing demand
By ERIC RUTH, The News Journal
Posted Tuesday, March 13, 2007
In the world of beer, where “big” is huge, no place is bigger right now than little Delaware.
A growing national love affair with full-flavored, robust-natured beers — “big beers,” in industry parlance — has helped catapult Delaware’s Dogfish Head to the front of a field overrun with small, independent “craft” brewers.
Lifted by an ever-expanding distribution network now covering 27 states, Milton-based Dogfish Head saw its sales rocket up 37 percent in 2006, according to the Brewers Association, an industry group representing independent breweries. Revenues rose a whopping 51 percent.
That growth led all U.S. craft brewers, who have been riding a boom themselves for three years now, posting an 11.7 percent increase in sales last year.
“They’ve just been booming year after year, starting with the little brewpub [in Rehoboth Beach in 1995],” said Paul Gatza, director of the Brewers Association, based in Boulder, Colo. “The craft category as a whole is very hot, but Dogfish Head continues to out-index even that.”
Dogfish Head has landed at the top of that profitable heap thanks to a canny sense for drinkers’ preferences and a quirky inclination to put out offbeat, buzz-worthy brews, experts say — the new Red and White, for example, is a Belgian-style “white” beer brewed with coriander and orange peel, fermented with pinot noir juice, then aged in used Oregon pinot noir barrels.
“Our mantra has always been, ‘Off-centered ales for off-centered people.’ That’s our call to arms,” said Sam Calagione, Dogfish’s founder and owner.
“They’re always doing these beers that get people’s interest,” like the ultra-hoppy 120-minute IPA superbrew, said Jeff Bearer, who podcasts a daily show on craft beers from Pittsburgh through his Web site CraftBeerRadio .com. “The other part is their availability. They have a wide distribution area.”
Such complexly crafted beers are gaining a customer base that goes beyond serious beer aficionados, industry experts say. Increasingly, Delaware is gaining a craft-beer prominence that goes beyond Dogfish Head, Gatza said. “Iron Hill restaurant group is very well-respected around the country,” he said. “Stewart’s [Brewing Company, in Bear] is well-known and has won awards in the past,” and the relatively new Twin Lakes Brewing Company in Greenville is grabbing attention.
For Dogfish Head, the rising prominence is especially rewarding because of how little it has to do with glitzy promotions. The company devotes less than 2 percent of revenue toward marketing, and doesn’t advertise in mass media or on television, Calagione said.
“Our beers are our billboard. Let them market themselves,” said Calagione, who is nonetheless regarded as something of a promotional campaign himself.
“Dogfish Head has some aura around it, partly because of Sam Calagione,” Bearer said. “He’s like a rock star in the craft beer world.”
On Web sites such as RateBeer.com, where such “auras” can be punctured by a few well-placed jabs, even the connoisseurs acknowledge that Dogfish Head’s prominence is no marketing trick. The company’s World Wide Stout is rated as the 11th-best beer in the world, and it’s No. 1 among all East Coast brewers.
For some “big beer” snobs, there is always the fear that a beloved brand will get too big for its own good, jacking up production to meet demand, and letting standards slip in the process. Dogfish Head’s Milton brewery just went from 30,000 to 103,000 square feet, giving it a capacity of 220,000 barrels a year instead of 45,000.
The boosted capacity feeds a growing business — six Dogfish Head Ale Houses are planned for the mid-Atlantic over the next six years. Starting this month, the company expanded distribution to Georgia, giving it a reach from Washington state to the Deep South.
Calagione insists that quality will remain a priority through the growth, and beer fans like Bearer agree.
“There’s no way you can say they’ve sold out,” he said. “They’re definitely not sacrificing their formula for profits.”