May 12-18, 2005

naked city

On Risk and Malt Liquor

GRAND SAM: Calagione with Bryan Selders in 2003 as The Pain Relievaz, "a beer-geek-hip-hop group" (here), and with a bottle of Raison D'Extra at Dogfish Head's Milton brewery in 2002 (below).

Brewer and author Sam Calagione discusses the finer points of the craft brewing business.

by Brian Howard

Sam Calagione, a former English major who's made his bones as the brewmaster and president of Delaware's iconic Dogfish Head Craft Brewery and brewpub, is finally putting that English background to good use. After 10 years in the brewing biz, the 35-year-old — who takes on the Goliaths of the beer industry armed with "off-center beers" as slingshots — has written his first book. Brewing Up a Business: Adventures In Entrepreneurship from the Founder of Dogfish Head Craft Brewery (Wiley) is part memoir, part business tome. Within, Calagione references idols like Dylan, Warhol and the Sex Pistols while discussing candidly and hilariously risk, enduring exploding kegs, learning from beer experiments gone awry (how about a lavender and peppercorn beer?), and talking the Delaware legislature into rewriting the law on the way to opening his then-tiny Rehoboth Beach operation back in 1995. With the Philadelphia signing/beer dinner/launch party for Brewing Up a Business looming (Tue., May 17, 7 p.m., at Monk's Café, 264 S. 16th St., $75, 215-545-7005), we caught up with Calagione on the phone.

City Paper: A lot of your business influences are artists, from Warhol to Miles Davis. Can bigger businesses learn from this?
Sam Calagione: I almost hope that they learn nothing from this idea, and remain in the quagmire of stasis that so many of them are in. … By nature, a public company's ultimate goal is maximizing shareholder value, and the unwritten subtext of that goal is [to] minimize risk. That's one of the greatest weapons in the small company's arsenal: Take risks that the big companies can't. That can mean exploring niches that they would never even recognize as having potential. … I feel like breweries like Dogfish Head are in a completely different industry than breweries like Budweiser. Yeah, we're technically both making what the government would call beer, but they're essentially in a commodity industry and we're more in the entertainment industry. We're entertaining, at the very least, people's taste buds.

CP: Speaking of which, you mention in the book a beer made with peppercorn and lavender leaves. What was that like?
SC: That was called High Alpha Wheat [and it] smelled kind of like soap. But it tasted like a nice wheat beer. Wheat beers tend to have almost a perfume-y, floral character to them, and I thought the lavender would enhance that quality. I think I used a little too much lavender.

CP: There's a push-and-pull in any craft/independent endeavor: I'll call it the sell-out factor — the point where you start reaching a bigger audience and risk alienating the core supporters who got you off the ground. Is that something Dogfish Head wrestles with?
SC: We don't wrestle with it so much as we acknowledge it. Thankfully, looking at our considerable growth, I know we're doing good things for our industry. But with extreme growth, it's inevitable that you're going to offend some of the early adopters. Basically you're no longer their little secret. … At Dogfish Head, we're full-on beer geeks, and there's a great difference between a beer geek and a beer snob. A beer geek is someone who's truly and honestly passionate about beer. A beer snob is someone who's educated themselves to a great degree almost to use it as a weapon. They're trying to be part of a really exclusive club and they use their opinions to keep people out of their exclusive club. And those are the people that really piss me off.

CP: I hear that Dogfish Head is now in the business of making malt liquor. Is this some sort of great untapped market?
SC: It's pretty much a study in inefficiency [laughs]. Basically, we do monthly beer tastings with our whole staff and we did a beer tasting of malt liquors. … We tried all the beers and we were really underwhelmed by how they tasted. And we said, "Shit, we can make a better malt liquor than this." The whole project is done a little bit tongue-in-cheek. So we gave it the sort of fancy name that is the total opposite of that style's perception: Liqueur De Malt. And then we actually sought out the highest caliber ingredients. The big breweries use corn because it's a cheap source of sugar compared to barley. What we did was find these really exotic gourmet corns from the food industry, like a red corn, Aztec corn and blue corn to make Liqueur De Malt, and then we hand-bottled every 40-ounce bottle and dosed a little bit of sugar and yeast into every single bottle so that the beer would naturally carbonate in the bottle. Natural carbonation makes for finer, more velvety bubbles. And then to further that, we take the time to hand-stamp with our logo 12 brown bags that go into every case of malt liquor, so that it's sold in this traditional manner and drunk from the brown bag. Keepin' it real and all. … At the end of the day it has more impact as a statement, as sort of a line in the sand, than it has on the bottom line of our company.

CP: So I'm guessing yours might be the first business book to reference the Sex Pistols.
SC: I hope it's the first one. I'm a huge music head. I reference Miles Davis and Bob Dylan and Wilco in the book. Probably they wouldn't wish to be viewed as brands, but essentially great iconoclastic musicians can be studied as brands. Bob Dylan succeeded because nobody sounded like Bob Dylan, nobody looked or acted or expressed themselves like Bob Dylan. It wasn't like the marketplace — the radio stations and record labels — in the '60s was crying out for Bob Dylan. And he didn't give a shit, he said, "I'm gonna be different, and whether or not the world is ready for me, I believe I can make a difference." Examples like that have a lot of value to small businesspeople. … If you can create something that's unique … you shouldn't be upset that you started appealing to more people, you should be psyched that more people found their way to you. The purest way to grow a business is to not change what you're doing to appeal to more people, but to change the perspective of more people to bring them toward you.