First Draft: Dogfish Head mastermind pours advice for local brewers
The first time Sam Calagione was in Pittsburgh, he slept in the back of a box truck because he couldn't afford a hotel.
Oh, how the craft beer industry has changed in that time.
“I used to come up here with two pallets of beer in a box truck and a mattress,” says Calagione, who founded Delaware's Dogfish Head Brewing Co. in 1995. “I couldn't afford a palatial hotel.”
He can now, having built one of the country's most well-regarded craft breweries. One recent Tuesday morning, he appeared well-rested after spending the night at the Priory Hotel on the North Side. Calagione was in Pittsburgh to promote his new book, “Off-centered Leadership,” which spins lessons learned as he's grown Dogfish Head into an industry icon.
His affection for atypical ingredients in beer — wasabi, saffron, gesho root, exotic South American wood — has built his reputation as a rebel, but he has a puritanical commitment to craft beer, which he says is under siege from corporate breweries.
First Draft recently spoke with Calagione about craft beer's growth, his impressions of Pittsburgh's burgeoning scene and his advice for anyone starting a brewery. An edited transcript follows.
Question: You've said this is as competitive as you've ever seen the industry. What do you think the implications are for today's small craft brewers?
Answer: I think there's never been a better time in American history to be a beer drinker and beer brewer. It's so cool to see that there's hundreds, if not thousands, of breweries brewing outside the Reinheitsgebot (German beer purity law), but when we started, it wasn't considered cool. We were being heretics and weirdos to put coffee and raisins and maple syrup in our beer.
Q: Some people considered it a gimmick.
A: Yep. They called us the “one and done brewing company” because our beers were 9, 10 or 11 percent. No one will ever drink a second one of those. The model that is very sustainable as a startup, in terms of staying profitable from the get-go, is this model of a tiny little production brewery that does the bulk of their sales out of their own tasting room. That model didn't really exist when Dogfish was coming up, and I think it's because the Internet makes these breweries much easier to find.
Q: What changes if any of these breweries gets more ambitious? It could heighten the sense of competition.
A: The heightened competition is good and bad. Everyone's going to be better at their game. I don't think only the breweries that choose to grow as quickly as possible are those that are going to survive and thrive. I think the model for a successful brewery regardless of their aspirations of scale is they have to be maniacally focused on three things: quality, consistency and being well-differentiated. I think if you're focused on those three things, it doesn't matter if you want to stay a tiny little brewery in an industrial park selling growlers and pints from your door or you want to grow the way we have selling beer coast-to-coast.
Q: Your mantra has been collaboration within your own company. What about collaboration with other breweries?
A: I think that's a great thing. But I think you have to up your game on quality, consistency and be well-differentiated if you're going to embark on a collaboration to get the most out of it. It might be nothing more exotic than each of you researching your favorite variety of hops and introducing them in equal contribution levels to a beer, but to have a unique way into the collaboration that speaks to your own brand identity is, I think, what's important. And to do it not just for commercial opportunity but for the opportunity to learn from another entity.
Q: Can you talk about the relationship with macro breweries, like AB InBev, some of the tensions in the industry and maybe where you'd like to see them head?
A: First off, let the record show that I think ABI makes high-quality, consistent liquid and would never denigrate their attention to quality. But in terms of being well-differentiated, the three points of that stool, that's not really their goal as they make overtures to the world of indie craft. Their goal is to take some of the momentum of the true indie craft and bring it into their public company's world.
The goal of an indie craft brewer is just to make world-class beer, create an awesome culture for both the people that love their beers as consumers and the people that they work for. A public company like ABI, their legal goal is maximizing shareholder value every quarter. So they're going to come at things from a totally different set of priorities, and they bring a level of competition to the game that's unparalleled. They have amazing access to distribution, access to raw ingredients, access to market. That's economic Darwinism.
But I do think the consumer deserves to know the truth about the beers that they're buying and when a beer like Goose Island is marketed like this craft brewery from Chicago, and most of the beer is not actually made in Chicago and the pricing that it sells at is not what a normal indie craft brewery can afford.
Q: Does it matter if their quality doesn't suffer?
A: I can see the argument where that could be said. But when these beers are sold for prices that aren't sustainable for indie craft breweries to sell their beers at and yet they're marketed as if they came from a little indie craft brewery, I think there's some issues of integrity in that messaging.
Q: You seem to be very concerned about the money and new ownership coming into the craft beer industry.
A: My biggest concern is that the world's biggest breweries are co-opting the definition of craft. The Brewers Association ... defines independent craft brewery as small, independent and traditional. Small meaning less than 6 million barrels, traditional meaning all-natural ingredients and independent being 25 percent or less owned by a giant brewery. That's our line in the sand. Maybe for another brewery it's not and for a consumer it's not. But it's the best line in the sand that we have. I think consumers need to know what that line in the sand is, what brewers sit on one side of it and what brewers sit on the other, and they can choose if they care about walking across that line or not.
Q: Pittsburgh's craft industry is still pretty young. Do you have any lessons to impart?
A: In general, you can't go wrong as a brewery if you keep demand in front of supply. If you're making all the beer you can sell, why change what you're doing? If you find you've got excess capacity but there's still great demand for your beer, open a new market but wait until the demand has caught up with your new level of supply or else you get in a situation where if you build up too much brewing equipment, too much capacity, too much labor, then you're trying to push the beer on the market instead of letting the market pull it from you.
Q: Is there a particular brewery that you want to try?
A: While I'm here? I know it's brewed across the way in Ohio, but I want to try a nice hoppy beer from Fat Heads. If I go to Church Brew Works, I'll probably have that because I enjoyed a few of those back in the day. What else do you recommend that's new?
Chris Fleisher won't say which breweries he recommended, but if you got a surprise visit from Calagione last week, you were probably one of them.