Dogfish Head Craft Brewery: Sam and Mariah Calagione (2022)

0:05 Hey everyone, it's Guy here. So this week we're taking a quick break so our team can bring you lots of new episodes of the show. So we're bringing you a great one from the vault, the story of Dogfish Head Brewery. The founders, high school sweethearts, Sam and Mariah Calligione, came on the show back in 2022 and they shared how they turned Dogfish Head from of this weird little brew pub in Delaware, into one of the biggest brands in craft beer. This year actually marks a pretty major milestone for the company. It's Dogfish Heads Thirtieth year in business. And as you'll hear, it's been a few Fun and crazy ride. Enjoy the show.

0:45 One of the cool moments was while I was trying to raise the money, Mariah and I went to this regional festival called Pumpkin Chunkin'. Right. I took my homebrew pumpkin beer there and kinda muscled the the grannies and aunts out of the way that had their cakes and pies in the competition and and our dogfish head pumpkin ale won the the food competition. Wait, you hijacked a a baking competition of old women Grammys with your beer which is not even a part of a baking competition and you won that That's amazing, but that's not fair. It didn't say it wasn't for beer.

1:21 That's true. Don't hate the player, hate the game. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements. They built.

1:42 I'm Guy Roz, and on the show today, how Sam and Mariah Calligoni made some of the weirdest beers in America. turn them into a beloved craft beer brand? Dogfish Head Brewery. Last summer, I had one of those black and white to color moments, you know, like in The Wizard of Oz, when the black and white film switches to that vivid technacolor when Dorothy gets to Oz? Well, for me, it happened in a strawberry patch in Northern California.

2:18 It had been a long time since I picked strawberries. The first one I plucked was a small shiny bright red berry that I popped right into my mouth. And within what felt like light speed, I experienced that black and white to color moment. Because to compare a store-bought strawberry to one you pick is like comparing municipal tap water to freshly melted glacier ice. Just not the same. And once you eat a freshly picked strawberry, it's hard to go back to the plastic packs you buy at the store.

2:53 These are the kinds of moments that sometimes inspire a business idea. And for Sam Caligoni? It happened at a Mexican restaurant that also specialized in beer. This was the early 1990s, and Sam was in his mid-20s. And up to that point, beer at

3:11 mostly meant Budweiser, Coors, and Miller. Sam was a bartender at the restaurant. It was called Nacho Mama's burritos. And they happen to serve craft beers from Europe. Belgian ales, says, beer infused with fruit and spices. And when Sam tried them? It was like Dorothy entering that world of Technicolor.

3:34 To say it changed his life sounds cliche, but That's what happened. Sam became obsessed with unusual beer. So obsessed, he learned everything he could about how to make it. He brewed beer with overripe cherries and peaches, even pumpkins.

3:51 And by nineteen ninety five. Sam and his high school girlfriend Mariah decided to co found their own craft beer company. They called it Dogfish Head, and they launched it in the small town of Rehoboth Beach. In Delaware.

4:05 And it just so happened that they caught a wave that would turn American craft beer into a massive phenomenon. Dogfish Head Brewery would go on to become one of the most popular and acclaimed craft beer brands. And in twenty nineteen The company sold to Boston Beer Company in a deal worth around three hundred million dollars.

4:25 The story of Dogfish Head is also the story of two people, Sam and Mariah. Who had a special connection and a truly lucky partnership. Not just as a married couple, but as two entrepreneurs. Their business skills complemented each other so well that It was almost like they'd hired each other first and then decided to get married after.

4:48 Sam grew up in western Massachusetts, Mariah grew up in Delaware. The two of them met in the late nineteen eighties in high school. They both attended Northfield Mount Hermon in western Massachusetts, a boarding school that encouraged all of its students to have a job. the kids had to work the way through school and so the you know, we'd be preparing the meals, people would be, you know, doing the farming, stoking the fires in the in the power plant. And so, you know, I think really kind of that

5:17 impacted, you know, influenced our decisions to to be entrepreneurs, which is probably why that school's still such a big part of our lives. Tell me how you guys met each other. 'Cause you're you're still you're still together and this is like Forty years ago. Later. We've been making out with each other since the mid eighties, yeah.

5:34 I might be getting like our meeting story mixed up with that scene in Ghost where Demi Moore and Patrick Swayze are molding wet clay together. But I remember it being in an art class, but I know we also had work job together. Yes, and I do remember us meeting in the dining hall While we worked in the kitchen together for our work job. And How soon after you met did you start dating? Well, dating when you're at a boarding school is kind of a loaded term'cause there's nowhere to go on a date. So And you probably were not allowed in the in the girls' dorms and the boys' dorms, right? That was

6:09 Forboten. It was an intricate dance guy. We had something called visiting hours where you had to essentially be a contortionist'cause the rules was door had to be open the width of a shoe. You each had to have one foot on the floor. There had to be one light bulb on, so it was an awesome matrix of

6:27 fun challenges for young people dating each other. Alright, so you're You guys are like You know.

6:33 high school couple, whatever that means really in high school, but Sam, you were Uh I'm I'm kind of I understating this, you were kind of a troublemaker.

6:44 In high school. To the point where you and I'll just I'll just give this part of the story away, you were kicked out before you graduated, but before we get to that Point. What was going on? Were you W like w what were you doing that got you to that point where you were kicked out?

6:59 Well, the technical for when they did finally kick me out in m March of my senior we year was accumulation of offences, which meant They didn't have me for one big thing. They had me for lots of mid sized things. So I know the offenses included things like breaking into the hockey rink with a couple of friends and Just but I mean just

7:21 Pranks. These were just pranks you were doing. Yeah, you know, some want to like be You know, I always did want to be like the the class clown and kinda use my sense of humor to kinda bring my friends together. It was kind of a social thing and uh and and you know, one of them was actually I would wait outside of liquor stores and'cause I was a day student, right? And I would pay somebody that was of age extra money to get me a case of beer and I'd throw it in my hockey bag and then bring it on to campus and at a premium sell beer. to the boarding students until I got busted. So it was never really malicious at all.

7:56 Uh, and that's what made it so painful when I got kicked out, is'cause I love that school. I didn't really show it in a in a positive way, but in that era I was pretty unwieldy. There's a story that that I've read about When your your dad came to pick you up and and drove you home. And

8:16 Obviously you were disappointed. Parents are disappointed. What do you remember about that? Yeah, so I lived on the third floor of the

8:26 Poise. Dormitory that for whatever reason the administration school allowed all the troublemakers to to be a under one dorm. So I was in there with a bunch of friends and I had my record player on, my dad pulled up in his F one fifty pickup truck and I just opened up the window and just threw garbage bags of all my belongings down in the bed of the truck, you know, while

8:49 My roommate's played That's Life by Frank Sinatra, I guess. In homage to my Italian. Heritage and then my dad drove me from Northfield. uh back to Greenfield Mass, like a couple of towns away where we lived. You could see him like you know

9:05 Clenching. Doesn't know if he should say anything. I j I didn't know what to say to him and At one stop sign, he said. You know, Sammy, sometimes you're a tough kid to love. And that was uh Only sentence I got on my my way home and and it was a brutal night. You know, my mom I got home and she had a book ready for me that was called When Bad Things Happen to Good People. And then literally the next morning, we go outside and my Labrador Retriever that was on a run outside.

9:31 The run recoiled and he hung himself and died. So in within twenty four hours I got kicked out of high school. My dog died. My dog it sounds like a country music song come to life, but it was a true story and obviously a very traumatizing time, you know, in my life. Wow. You just needed a baseball bat to Yeah. Wow.

9:56 All right, you're kicked out. And Mariah, were you he was your boyfriend, right? What did your parents think th were they like, ooh, I don't know, Mariah, Sam seems like trouble. 'Cause you were going off to Brown University, I should mention. Like you were studying hard and keeping your head down and doing all the things you had to do. In meantime, your boyfriend's like I don't know.

10:15 It's kind of Going in a different direction. Yep, as far as you know, Guy, I was I was studying every night and s on the straight and narrow. Um, although after he got kicked out was the first time I ever got in trouble because I got caught sneaking off campus to have a visit with Sam. But then I was also there the next whole year without Him'cause he w did end up going to college, which is the good news of the story.

10:38 So Sam, you did manage to go to college, so you got your degree, your high school degree, and and you went off to College in Pennsylvania, Muhlenberg and Mariah, you went to Brown in Rhode Island. And did the two of you stay together that those f those four years? We did. We did. It was actually cool. 'Cause we our schools were very different, but we also knew each other's friends very well and enjoyed

11:03 That different experience that we got to have every once in a while. Um Why you weren't in college, Sam? At Muhlenburg College. Were you a

11:12 And I mean everybody's a beer person in college at some point, right? Did you think about beer? Did you app notice it, appreciate it, or were you uh like uh Kind of a typical college student just pounding beers. More like that typical

11:29 college student. I will say, you know, when I left Muhlenburg the next day I moved to New York City and English major all I wanted to go take you know courses at Columbia or you know, uh uh Ginsburg and Jack Kerouac went and so I started taking courses in the M FA program up there, but uh to pay my rent. I worked at a bar across the street from Columbia that was called Nacho Mama's burritos, which is a pretty you know, auspicious name for what actually was an amazing first generation craft beer bar. And you know, within weeks I had Chime Red and Sierra Nevada celebration and that's really where I had my Epiphany beers and and and started on on the journey, you know. This is like in the early nineties when

12:09 I mean Sam Adams is around, but it it most bars s serve probably, you know But Weiser Cors, Miller Light, et cetera. Yeah, it was really kinda the opening moments of the craft beer renaissance in America. So there were some first gen craft breweries like you mentioned Sierra Nevada, Inker Liberst Liberty we s we sold from your neck of the woods and uh Chamae, uh Brooklyn Lager. Harpoon, I remember. So yeah, so we that place specialized in the very finite number of, you know, diverse beers you could get at that time. And I I learned that I had not only a pretty good palate for appreciating them, but I had a passion for like talking about how they paired with food and then And w but what I do remember is being like a voracious reader, I did get like my

12:52 You know, library card at the New York. public library and I found books like The Joy of Home Brewing by Charlie Papasian. And I just went deep into rabbit holes and when you read the story of these monks in Belgium, you know, brewing with these local fruits and these Czech breweries, finding these saws hops. I was like, holy shit, this is just as rich as a world of, you know, Fitzgerald short stories or Salinger short stories and but Sam, a lot of people sorry to interrupt, a lot of p young people go and work at a restaurant that sells beer or at a specialty store. And most of them enjoy it and then go off and do something else. What happened? that you were like, wow, wow, I'm really interested in this. Was there somebody there? I mean, because you were just hired to pull pints of beer

13:39 And s sell them. But Clearly something clicked in your mind where you were like, This is interesting. What was it? Well, I think it was about like That same like rebellious reflection I had in high school of like

13:53 Screw the man. Like what I think I found was okay, as I read about the beer world, I was like, Wait a second, there's all these super cool very unique, very vibrant different beers around the world, but you can't really find them in America, and America's dominated by these same, you know, monolithic generic, frankly, in my view, light lagers made by giant companies.

14:15 This is this could be a really cool thing to rebel against. Did you go into that job? Thinking that you wanted to start a business one day'cause you went to But it seems to me that maybe actually

14:28 You really were already thinking about What could I do? Maybe I could like what kind of business could I do? Is that is that right? Yeah, I think so because you know, my dad was really entrepreneurial and always kind of presented to that. He always sort of romanticize that not in like uh Corny over the top way, but just he respected that sort of American dream up you know land of opportunity to be an entrepreneur. So that was in my back of my mind. But the other thing really was the owner of Nacho Mamas, Joshua Mandel, was only like four or five years older than me. He he'd left like the start of a career in in tech here in Boston, moved back to New York City

15:04 and started a burrito takeout joint with no entrepreneurial or business experience. So I didn't have to look that far from me to have this inspirational figure. And then he and I kind of both got into home brewing at the same moment when he was my boss. So it always felt very natural, like baby steps to go towards Writing a business plan. So Sam I remember this is like the early nineties. And home

15:31 Beer brewing kits were like kinda becoming all the rage. Maybe they already were, I don't remember, but You bought like a home kit to to to brew your own beer in your apartment? Yeah, you know, myself and Joshua Mandel Track down in the New York

15:45 Yellow pages. There was one store I think in all the five boroughs, or at least in Manhattan, called Little Shop Hops. And you could buy these like prefab kits and he walked out and went to the upper West side where he lived with his kit and I started walking towards Chelsea and as I was walking to my apartment with my homebrew kit, I passed a bodega that was having a sale outside on like all this moldy or just squishy, like fruit fly covered fruit. And for so some reason I was like, Oh my god, look at all those cherries, look how cheap that is. What if I take this pale ale kit? and squish the cherries into it. You know, it's not the recipe, but I wonder how that would taste. It has fermentable sugars, the Belgians brewed with fruit, so That was kind of the moment, you know, for me, I took that kit home and and uh started boiling it in our little tiny apartment. So that

16:34 That's interesting because you had w working at this. restaurant that sold Belgian ales, and as you mentioned, there's a long tradition of using fruit. in Belgian beers, right? So you were you were kind of inspired by that and thought, Hey, I wonder if I could Do something like that with my home. Yeah, and it was kinda like a hot mess. Like I didn't bother to read m the instruction manual or anything, and I bought all these used giant like thirty-two ounce.

17:01 glass bottles. And the other thing is it said you could either like sanitize the bottles with the solution or just heat'em up in your oven to sterilize them. So I remember I heated'em all up in my oven while I was And I took them out with like Tongues And put'em down on the floor to cool half an hour or whatever. I came back to Melted the carpet.

17:27 Carpet but it have fixed the carpet to the bottom of the of the bottles. Wow. So I remember getting like an exacto knife and ripping these circles out of the carpet of our rental apartment. But it was super cool'cause when we served the beer, every single bottle had like a built in coaster and that was a unique feature, of course, when we moved out of the apartment. There was this like Polka dots all over the kitchen. Who paid for that? That damage to the landlord. You know, we put another carpet over the circles in the carpet and

17:56 And just left. Um, all right. So you you kind of start this process and you leave it in there and you gotta wait for a couple of weeks before you try it, right? Yeah, yeah, yeah. You know, th usually as a home brewer it's awesome to do lots of bottles'cause every week you're so anxious to try it that you open one and it's so deflating to hear no noise, but that moment when a bottle opens and you hear that k of carbonation is like

18:22 Game on. All right, so you finally have this beer ready to go. And by the way, I think you had a roommate. Was your roommate mad at you for destroying the apartment? W was your roommate like, dude, what did you do? Or did they just laugh? They mostly laughed, yeah, and I do remember the first time You know,'cause I it was funny because I lived f randomly with a bunch of

18:42 actors who are still making an awesome living. As actors. Ken Marino was there the first time. He was my roommate. And he's in a show called The Other Two on HBO. Wow. And uh Joe Letruglio, the short cop on Brooklyn Nine Nine, was one of our roommates. Yeah, they were all in a show called The State on M T V when we were Oh yeah when we were a great show. Exactly. And so the the most surreal night was that Mariah came up from Providence.

19:10 All these guys from the state on MTV came over and some of them were my roommates. And then Ricky Lake, randomly enough, the talk show host. I'd done some weird episode with her 'Cause I was doing a little night uh work as a as a model or just side work, and they had me on the show like on it they had an episode episode called W When Good Girls Fall for Bad Boys. What and you were Wait, what'd you do on the Ricky Lake show? I played a bad boy. I just remember I was I didn't treat it very seriously, but she was laughing and I was like, Hey, you wanna come over to our house tonight? Made some homebrew. I didn't think we hear from her, but we got a knock on our third floor walk up. That's amazing.

19:53 Uh amazing just side gig that you had as a As a model. They they hired him for Ricky League because it was before the show premiered, so No one knew what the show was, so they had to hire actors to play The talk show guests.

20:09 Just owed Ricky Lake, Mariah. Sorry, Ricky. Wow, who knew? We just blew the lid off Ricky Lake. Jeez. We love you, Ricky Lake. All right. So Ricky Lake

20:24 The cast of the state And uh Mariah and you are all crammed into your apartment. About to unveil this home brewed cherry English Pale Ale.

20:35 With carpet on the bottom of the bottles. With carpeting as coasters attached to the bottles. And was it a big thing did you like say and now I'm gonna unveil I mean d was it Yeah. kind of this magical moment that you were Introducing to everybody.

20:50 It kinda was,'cause I I didn't know if the beer was good or not. And uh we opened it up and Everyone's Surprised, I remember that. Wow, this is actually really good, Sam. And I do remember drinking one of those whole thirty two thingies myself. thirty two ounce things, standing on the coffee table and saying, This is what I'm gonna do in my life, guys. I'm gonna

21:13 Open a little brewery that makes beers like this. Wow. So you've got Everyone likes this beer. And was it um Did it have that like a sweetness to it, uh or a like a sourness to it? I mean they w these were sweet cherries. Do you remember Whether there was a sweet to the beer?

21:28 I remember the cherry being pretty pronounced, and then the pits from the cherry gave it like a nice oaky wood sort of toasty character. What I wonder what Ricky Lake thought of the beer. Do you remember? I remember she liked it too. I don't think there was a a single dissenting voice in that group of drinkers. When we come back in just a moment. Sam decides to open a brew pub, finds a location for it, gets it ready, puts up a sign,

21:56 Just in time for someone to tell him. You know you're breaking the law, right? Stick around, I'm Guy Raz, and you're listening to how I built this. Hey, welcome back to How I Built This. I'm Guy Raz. So it's the early 1990s and Sam has just taste tested his cherry infused beer for a group of friends, and everyone's kind of surprised at how much they like it.

22:28 So when Sam wakes up the next day? He's still buzzing. I remember that the next morning I didn't have to work at Nachamama's till dinner shift, so I literally got up and with a hangover walked to the the biggest unit of the New York City Library and Start doing Lexus and Nexus searches about Start to write a business plan.

22:48 So You you s you thought right then and there, I'm gonna start I'm gonna write a business plan. Before we get to the business plan, You had not yet understood the science of beer at this point. Now of course you do, but then you were Kinda just throwing things into a

23:03 A bucket and mixing it and hoping it worked out. At that point, right? Um to some extent, but I w at that little shop of hops I bought the book that I first read in the library called Uh The Joy of Homebrewing and Charlie Papasian wrote that book and it's considered sort of the Bible and so Charlie did a really great job in the joy of homebrewing of putting into layman turns the science of fermentation. So by reading that, I had some level of confidence because his rallying cry throughout the book was Don't worry, relax, have a home brew. Yeah. Which is basically yep, there's some serious science going on in your kitchen right now with these little single cell animals called yeast, but don't freak out, you know, this has been happening for thousands of years, trust the process and you'll make good beer.

23:45 Hm. So you're so you're learning about I can make a business out of this. And I guess you decide that you're gonna start out by by opening a a brew pub, right, like a restaurant somewhere. Um why go

24:02 I in that direction with your business. Yeah, just making a brand that would bottle beer and sell it to stores or or or something like that. Well, you know, like I said, I came up in this big Italian family, both sides of my family, and my mom's famous for her Shrimp scampi.

24:18 And my grandmother on my Yacavelli Calligone side for And so I grew up with food and wine being like central to bringing people together. And that was kind of the lens that I started doing the search How can I blend my love of food with my newfound love of of of brewing? Yeah. You know, and

24:37 It was a fairly unique business plan in that era because the whole concept, like in the first page of the business plan I wrote Dogfish head will be the first commercial brew in America committed to brewing the majority of our beers outside the Rhine Heights gebout. And the Reinheits gebot is like four ingredients German purity laws. You can only use like four ingredients, right? Exactly. It basically says why are you used tops barley, that's all you got to choose from. And you were saying I am not going to Yeah. Yeah, you know, and I I even said w we're committed to brewing the majority of our beers using

25:10 unexpected culinary ingredients. Like our first beers, for example, out of the gates were beers like chicory stout made with organic Mexic and chicory and licorice root, immortale made with maple syrup from my family's farm up in Massachusetts, Juniper berries and aged on Oak, raison d'etre made with raisins and beet sugars. So right out of the gates, we were brewing these beers that were not referencies. Um, because m right, I mean like Sam Adams, for example, prided itself on the Reinheit ski boat, that it was a beer that could be sold in Germany'cause it it did adhere to those standards. Like that was

25:50 A point of pride for a lot of the smaller craft brewers. Yeah, and and uh rightfully so. I mean the first folks out of the gates The Jim Cooks and the Ken Grossman from Sierra they're brewing these Beautiful fresh local interpretations of modern you know, European beer styles. Yeah. And that was amazing, but Ryan, I I mean, I knew we weren't gonna have a big marketing budget even to, you know, stand out in that first round of brewers. So that's why I was like, what can we do to really stand out and reading about people like Alice Waters and James Beard who had very similar message which is

26:26 America has an amazing agricultural Base. Let's stop. Genuflecting towards European. food traditions, let's create our own American traditions with our own ingredients. And that was sort of the the epiphany moment that led me to kinda say, I I wanna go on this journey that really is about culinary

26:44 Inspiration for beverage recipes. The restaurant business is like one of the riskiest enterprises you can get into. It is like very uh labor intensive and overhead intensive and food spoils, like it is

26:59 the riskiest, craziest business to go into. Like didn't anybody say that to you about the restaurant business? I know they did because banks wouldn't give me any money and that's what they would say. But Where I think I was lucky is you know, Mariah and I worked our asses off in our our summer jobs. And so when I was raising that money, like it was my my dad believed in us, uh Mariah's dad believed in us, my orthodontist put in money, he believed in us, a guy built stone walls for my summer job on golf courses.

27:31 believed in us and his wife put in money. So, you know, sharing our passion and the business plan and the concept with a number of people in our lives helped us get on our way. Then these are friends and family. Right. Two hundred thousand bucks, right? To do this? Yep. Yeah, but cost two hundred and twenty thousand, yeah.

27:49 And it was really I did it, I structured it as personal loans out of the gate so it wasn't that initially that you know they had equity in the company. So that also helped Mariah and I keep control of the company as we were getting our our feet under us. Yeah. And I mean, you clearly have both of you now have amazing beer palettes, right? And but And and there are people who have natural palates. Like you meet like Wine Somaliers who are just like

28:17 But but Then there are people who train their palates. But still it takes time. How did you know at this moment, at this time? That y that what you were making was good. Did you have

28:28 kind of I don't know, stress test it? Well, I mean certainly the the our friends getting free beer liked it. But that is not the stress test I was expecting. I'd say one of the cool moments was while I was trying to raise the money, Mariah and I went to this regional. festival called Punkin Chunkin where a bunch of farmers and, you know, homespun engineers create these

28:55 These like Rube Goldberg-esque machines that huck pumpkins in a field and the a sort of sideshow of that competition is the a bacon competition. Right. I took my homebrew pumpkin beer there and kinda muscled the the grannies and aunts out of the way that had their cakes and pies. in the competition and and our dogfishhead punk and ale won the the food competition. Wait, you you hijacked a a baking competition of old women Grammys with your beer which is not even a part of a baking competition and you won that That's amazing, but that's not fair. Don't hate the player, hate the game. It didn't say it wasn't for beer. That's true. Yeah, I do remember there was a few judges and they're like it just says it's something that you can ingest that's made with pumpkins. That's all you need to do to enter this, so he's we gotta let him in. And he you won. You won this comp this I mean it wasn't like a massive national but it was a local little comp but still that's kinda cool. You won. Yeah. It didn't lead to like an SBA loan or anything, but

29:57 And what was in your Your pumpkin ale. Uh same as Dogfish had Punk and Ale today. So it's fresh pumpkin meat, fresh crushed allspice, cinnamon nutmeg, and then instead of fermenting it with you know, regular sugar. I I ferment it with brown, you know, organic brown sugar, and we still use brown sugar in the punk and ale today, so Wow.

30:18 Um all right. So while you're writing this business plan, Mariah while while Sam is writing this plan, W what were you thinking? I mean you were Coming out of This August, you know. Ivy League institution and you know, you were

30:30 P had lots of options to do many different things and I wonder did you Did you immediately think, Yes, this is it. This is a great business idea or or were you thinking, uh, you know, maybe maybe Sam will like move on, like maybe this will be interesting to him for a couple of months and then He'll figure something else out. No, I mean I I love the idea of Opening the

30:50 Pure pub, particularly like as he said, as a restaurant.'Cause I had worked in restaurants every summer during high school and college, so I was familiar with that whole world of waiting tables and so the original plan was Yeah, he'll move to Providence and start looking for restaurant real estate while I was working in local T V news up there. Okay, and I guess I guess you guys go ahead with with that plan, but from what I understand you

31:16 You sort of get cold feet when you find out that there's another brew pub about to open in Providence, you guys were uh presumably I think you were hoping to be the f the first ones there. So So at that point do you Do you start to look elsewhere like Like in another city.

31:32 Yeah, yeah. So you know, Mariah and I talked it through and we were kinda like well let's see what's another State. close to New England where where we are right now, that d has yet to have a brewery opening. post prohibition and it it happened to be Mariah's home state of Delaware where we worked in the in the summers of our college years. And at the same time my dad called and he said, Hey

31:53 There was a group that was trying to open a brew pub in in Rehobith Beach, Delaware. But they're not opening. So we said Okay. Let's control all delete all the providences in this business plan and replace with Ruth Beach, Delaware. Yeah.

32:09 And uh I also knew that beautiful coastal Delaware's, you know, pretty much two hours from D C Baltimore, Philly, three and a half from Manhattan. So it'd actually be like an ideal hub to eventually distribute beer to major metro markets. And what what's available there? Where in and this is Rehoboth Beach, Delaware? Yeah, yeah, Mariah and I, you know, found a building

32:36 That was just a few blocks off the beach in Rehoboth where it was called like I remember Mariah. Do you remember what they used to call that part of town? The the part of town where businesses went to tie. Uh it was Just far enough from the beach that everyone said, Well, why do you want to be that far off? Which I mean, it's it's literally laughable now because it's only four blocks away. Yeah.

33:02 And and you come up with a name for it. Dogfish head brewings and eats. And and by the way, how how did you come up with that name? So my folks had a little summer place on an island. that was in Mid Coast Maine and it looked out at a jut of land called Dogfish Head. And I liked how that name kind of meant a place to me, a rustic woodsy place, kinda like the rustic woodsy beers. But I also liked how it

33:28 Just sounded like three kind of whimsical words, you know, put together in a creative way so that it wouldn't it wouldn't reek of geography if we ever distributed our our beer coast to coast. Right. So you didn't want to call like uh Delaware brewing company, yeah. Or like the first state brewing or something like that. Exactly.

33:48 Or Della Wear. Classic. Right? You can get that T shirt on the boardwalk, guy. Exactly. All right, so you uh so so you find this location in Rehoboth Beach. How many seats was it gonna have? I feel like it was like a hundred and twenty and then plus the deck. So that's a that's a big Decent size restaurant. Yeah, it was two stories. I mean it was it had a lot of space. Yeah.

34:13 And we Rented it from A woman, wonderful woman who her family had had a crab place that they ran there for like decades. and then they started just renting it out to tenants and it it had this reputation of of not being a real well run place. But literally the day like The day I got the wooden sign made that said Dogfish had brewings and eats, I said, Hey Mariah, stand across the road so you can get a full view of me taking off the old restaurant sign from the facade of the building and putting our sign up on the building. And uh so the first surreal moment was I

34:49 Unscrew their sign and I take it off and there's a sign of another failed restaurant behind that underneath. So this is a really good good omen. Like one fail, two failed and now here you go. It gets worse. It gets worse, guy. Cause then I'm like, Okay, and so I screw the dogfish brewings and eats side. Mariah's taking the old school analog photos of this whole hot mess, and literally some guy walks by and goes Brewings and eats. You know it's illegal to open a brewery in Delaware, right? And if you remember Mariah's dad said, Oh, some other entrepreneurs were gonna open a Bere in Delaware and they just couldn't raise their money. Well that person walking by, of course I should have done my homework. let us know brewing was not legal'cause he had some connection to the other brewery that failed. And so he proceeded to tell me, Oh yeah, yeah, the statutes in Delaware law still say it's illegal to open a brewery in this in this state. Wow.

35:44 This is an old law, probably goes back to prohibition. it seems like it was just a technicality, but even to like deal with that just sounds like a headache with all the things you're already dealing with. The the you know just the regulatory stuff and the filings and finding the employees and building out the kitchen and the space and then brewing the beer and you know So What did you do?

36:03 So literally that same day that we ripped two old restaurant sides off a wall, put ours up on the wall. I drove up to Dover and literally I was like, Hey Mariah what do I do when I get to Dover? She like oh go left onto Lockerman, blah, blah, blah. So I found the right road and I rolled down my windows and I was kinda like all right, which one of these is the House of Representatives? This is the state capitol building. Yeah, I guess that's what it would be. And uh And I walk through the little security thing and I get on the other side. They're like, Can we help you? And I'm like Yeah, I'm under construction on a brewery and somebody told me it's illegal. Who do I talk to about that? And uh they were really sweet. I mean they they were like, Well, son, you're gonna have to write a bill. And uh they they open their doors and I think that's something that I wanna give shouts to the state of Delaware. It's a a super

36:49 business friendly state when you think of its history from DuPont to Gore to agricultural. Shell companies. Yeah. Maybe that too. But they were super cool. Like they're helping me. They're like all right, so write this up. Get a lawyer who can stand with you and massage the language and literally guy within a month We were on the floor. Getting a bill that we wrote. Brought forward and then Governor Carper, who's now you know, signed that bill. And it actually turned into this just kismet moment'cause all of a sudden our our state's biggest newspapers are writing, twenty four year old kid, you know, foolishly rents a restaurant to open a brewery, it's illegal and he has to go to Dover.

37:33 Yeah, so people were kinda rooting for us to get the I'm sure. I mean what what you couldn't have bought better publicity around that. And then subsequently after that we became really friendly with those good folks in in Dover through the years. Alright, so you get this law passed. Brewing. is legal in the state of Delaware. Yeah, that was an amazing moment. And I remember like calling Mariah from a payphone, you know, like let the faucets open you know, it was kinda like one of those post prohibition moments of

38:00 Wow, we we we got we made this happen. Yeah. June twenty third, nineteen ninety five. You open the restaurant full this is it's now fully open, right? How was business that first summer? It was good. I mean people came in, people wanted to explore. We had a lot of people ordering, you know, their standard beers and We'd explain that we didn't sell those beers, we made our own beers.

38:23 So every every customer was a a teaching opportunity, I guess. I mean most people's palettes at that time was like, you know, your standard Coors and Miller Light, and maybe Sam Adams, Um which

38:40 Uh is a great beer, but was not as radical as what you were you guys were doing. Were there people who were like Mm, not for me. Yeah, I mean especially once we open

38:52 you know, necessity's a mother of invention and the fact that we couldn't afford a a full scale, you know, commercial brewing system and had to start with tiny little pot and pans, you know, making twelve gallons of beer. It was actually a blessing in disguise,'cause I would brew two or three batches per day, and let's say I was brewing raison d'etre, Belgian brown ale with raisins and beet sugars. In the three brews that day I would tweak one variable in that recipe three times. And that was our first like de facto focus group. So I would ask the customers who cared enough to visit this crazy little brewery. Hey, did you like the batch that had more raisins, less raisins? And we kind of developed the recipes in concert with our original fans and and that's kind of how our brand grew.

39:36 And they actually paid us to do that. Which was kind of helpful. And uh back then I would hand out like file cards when we'd hand people beers and ask them, What do you think of these? And I I wish that we kept them. I remember we had one beer on tap called High Alpha Wheat that was made with lavender buds and one of the comic cards came back and says this beer tastes like tongue kissing Laura Ashley.

40:03 Like I don't know if that's a good thing or a bad thing, but probably fair point. what you were doing was that it was expensive, right? You were using a higher uh m volume of grains and

40:20 Expensive. you know, dried fruits and sugars and so you had to Sell your beer for more money. Double the price of a

40:30 Budweiser or Miller Light. Did you have to educate people around that? Yeah, to a degree, but that's the education we were doing anyway to explain to them. What?

40:38 the different beer was in the first place. So I think it kind of worked hand in hand. You know, I think in in the bigger context, you know, beer is Pretty much an affordable thing to splurge on. Right. So That worked in our benefit. And yes, it was more expensive than, you know The regular beer that you would buy down the street, but you could only get

40:59 R beer. At our place and I think people appreciated that it was gonna cost more'cause They knew why. I think you know, they saw it being made. Right. So from what I understand in

41:10 Initially, maybe in the first at least year. You were brewing all of the beer for this restaurant in fifteen gallon kegs. On propane burners. That's not a lot of beer for a restaurant that's has a hundred and fifty seats every night. So

41:26 What just help me understand how how you were brewing enough beer. What were you doing? Yeah, so um I had a a mattress in the cellar of the pub. So I would only go home to our house maybe three or four nights a week and then stay in the basement of the cellar and We would shut it. midnight or one and then I'd start brewing, you know, before the day would get hot. You'd wanna start brewing by you know, eight in the morning or so. So five or six days a week I would Triple brew, you know, twelve gallon batches. It worked fine. I would use the hose before people got there in the in the in the brewery for my showers. And Mariah had a f a real job because we needed insurance. What were you doing, Mariah? What was your real job? I was working in uh local T V news.

42:10 in Salisbury, Maryland. On on camera? Uh mostly off camera. I prefer that. But you what were doing that in a day daytime and come in the restaurant at night? Yeah, I would come in in bus tables or work at the front door Do some dishes. Yeah. Whatever needed to be done. And Sam, you were doing you were brewing the beer and doing payroll and doing the shifts and the the schedules and stuff like that. Oh he wasn't doing payroll. Let's be clear. Come on. No one trusts me with the math, guy. Come on. Um I was more I was doing the front of house Basically talking about the beer and the food and how they work together with the customers. I'd be getting ready t to get the bands on stage and Oh, you would do live music?

42:53 Yeah, like the holy trinity was original beer, original food, original music. We also refused to have any cover artists, which you know, ninety three percent of the bands that played back then were Jimmy Buffett cover bands. So we were like finding all these indie rock bands from across the country, you know. So that was a big part of kind of the brand building as well. And then like trying to foster relationships with other entrepreneurs, knowing that in the winter the tourists were gonna go away and try to get other sort of entrepreneurs to choose us as their preferred watering hole. Those were the kinds of work I I was doing as well as as brewing. Alright, so you've got the restaurant going.

43:30 Um but It's very rare for any business, let alone a restaurant. to break even or be become profitable in the first year. I'm assuming that you were not profitable in your first year.

43:43 The restaurant actually did pretty darn well, like right out of the gates. But What did become challenging is I knew that Our recipes were unique.

43:54 Nationally. by that focus on the culinary, I knew that If I could start distributing the the beers to cities like D C, Baltimore, Philly, Manhattan And I could get the Washington Post to write about a beer made with raisins or the fully inquiry to write about a beer made with chicory or that would Help her.

44:13 Brand growth disproportionate to our tiny scale down in in coastal Delaware. Right.'Cause you you could not do that. with just that Delaware market, you had to go to those huge media markets and consumer markets like Philadelphia, D Ca that kinda drove us to get our bottling line going in our building and buy a little box truck and get on the road and I would drop off two pallets at a distributor in New York or Philly, but then take a bucket of beers to Art Forum magazine or interview or food and wine or and and you know, usually people would let us in their door for if say, Hey we wanna throw a uh we wanna throw an impromptu happy hour for your editorial staff or your writers

44:53 And that really helped us start getting national attention. So um Uh, what Mariah, what gave you the confidence to leave your job? in in television to to go full time'cause I think full time nineteen ninety seven, you joined the company full time. So right before I left my full time job to come to Dogfish, we opened a separate production brewery to brew and package beer that we could then distribute to these, you know, markets around us.

45:23 my last job in T V news I was working managing the assignment desk for the news department. So I was like the receiver of all of the press releases and media alerts and you know, so I naively assumed that that meant, Oh, I know how to do the opposite of that and put out all this information and I'm of course I know how to do marketing, but quickly I realized that I was not needed as much to do marketing as I was all of these other things that we needed to be able to do. Like accounting. Accounting and HR and T T B or or Tobacco Tax Bureau were excise tax forms twice a month. But I learned I learned a lot. And while this is happening, we also went head first into starting a family. So so it was definitely a an intense time for for us as a as a couple and as entrepreneurs. Yeah, it's remarkable to me when I

46:16 Meet people who met. When there are teenagers are kids because that is so rare, right? Like your judgment as a as a kid or teenager is just so different from your judgment. And even our judgment as adults is you know, pe people Marriages don't last or whate whatever it it is, right? But

46:33 I mean part of it is luck that that just two of you guys happen to be compatible and liked each other. But but I'm just just curious, Sam, from your perspective'cause he married very well, right? Like you married somebody very smart and who was like the brains of the operation, a dogfish head, right?

46:50 In Mariah, did you see somebody who could be like U you know, not just life partner, but like a business partner. Yeah, yeah. So I often use that analogy of like a comic book universe as an entrepreneurial universe where there's all these mutants with Complimentary superpowers that take on the big bad guy, you know, a giant corporation or some monolithic industry. And so uh, you know.

47:13 to use the Marvel universe. Uh you know, I'd say I was a lot like Cyclops where I just was like spraying, you know, creative energy in a million directions out of my brain and eyes and sometimes for good and sometimes recklessly and destroying stuff and Mario's definitely always been more like the professor X, like she can read my mind and and could kind of see the lay of the whole land, you know, cultivating and nurturing creative ideas that I have into a direction that's, you know, positive for for dogfish, but you know, just also for us as a family. Hm.

47:47 Um all right. So so At this point both of you are are working at Dogfish Head. full time. You're a and and you're starting to take your beer outside of Delaware, trying to get some national attention. And and so how how exactly were you doing that? Like were you were you marketing mostly to small bars or were you also I don't know, trying to like some some big stores or like some of the big restaurant chains? So we knew as we were growing making these really exotic beers. It's not like the biggest

48:16 Chain. Applebees or chain Costco's was gonna take a chance on a beer made with raisins or a beer made with apricots. So our goal at first was to find these You know, much like and I I I know you did a a great story with merge records, and if you look at how much the indie music movement in America, essentially in the same era when craft beer was coming up, late seventies, early eighties, that whole concept of getting a van as a band and you go across the country and you find this grassroot network of other people who Venue to venue, yeah. Yeah, the other people that give a shit in every city about this art movement that you're involved in. So really I found that grassroot network of hardcore craft beer bars and restaurants that prided themselves on exotic lists, and that's where I would drive to when I'd go to Pittsburgh or Hartford or

49:07 Or wherever and I try to do a beer dinner and talk to the local newspaper and really it was like this sonic youth, you know, model of growing a a brewing company. Yeah. I read a story about a beer event that you were at, Sam, in ninety seven. So you're still in your late twenties, twenty eight maybe around then. And uh this was a an August crowd beer makers, and you stood up to talk about this um new Beer you were making with

49:38 A apricot puree. What what happened? Yeah, is that the brick scaler which was a Mecca Oh, in DC. Yeah, you remember that, don't you? Famous bar, yeah. So I'm there and they were like one of the first places to host these brewers dinners. Like we'd all get our five minutes at the microphone, there'd be a room of a hundred people, and you get up there and describe your beer and then you'd go back to the brewer's table. And I remember very proudly saying, you know

50:07 getting up on the stage and being like as a homage to like the fruit aromatics of Northwest American hops, I've decided to infuse the beer while it's fermenting with fresh puree apricots and kind of made my passion plea to describe the beer. And I sit back down and a little older brewer than me gets up on the stage And quiets the audience with a spoon on his pint and he says, I believe that fruit belongs in your salad, not in your beer. Okay, all right. But but at that moment did you feel kind of like

50:42 Upset or did you were you confident that you were on to something? Mariah and I were I think scared because we had bill collectors calling us and I'd come home and we'd both be beat up and tired, but I'd be like, hey, I I dropped off that beer in Pittsburgh, and you remember how last time nine people showed up for my beer dinner? Guess what? Eleven people showed up this time. You know, she was supportive and was not like this is crazy. We're not making money. Let's just shut this down. But there were some challenging years there where we thought we were gonna go bankrupt, like late nineties, right, Mariah? Yeah, I got really good at disguising my voice when our

51:17 Green purveyor would call and ask for money and I'd be like Oh no, they're not here. What was it? Was it just you were running the business inefficiently or you just weren't selling enough beer or what was going on? Well, any time you want to make more beer. you need more capital because it's such a capital intensive process. It's like you can't just

51:40 make more beer without investing in more tanks and a more bottling lines and more so so we were living hand to mouth and any money that we got in we were putting right back, whether it is into our people, our ingredients, or our equipment. And I'd add to that, you know, it was all crappy used We had a bottling line that came from East Germany that I think made soda over there in the nineteen fifties and was sent to America as part of a cold war initiative to

52:09 screw up American manufacturing and we literally paid a guy who was all very skittish and wore ski goggles to just stand behind the bottling line and push valve number seven down as his job'cause the machine didn't work. And literally I think uh one fifth of the beer that came off that bottling line wasn't even a full bottle and we couldn't sell it. Not a very sustainable business model. And then that was really around the time that Mariah's dad, Tom Draper, could see that we needed some help. He's like, you know what, all right, I'm I want to put in this amount of money and I I don't know if it was a hundred thousand or or it was some meaningful amount. but I do want uh minority equity stake and we're gonna form a board of directors. And we were like oh okay, let's do that. Okay.

52:51 And that was awesome, but to your point of what was the cash flow like One of our first board meetings where Tom Draper I stood up and showed him like some magazine article about our beer that got national coverage, and he was quiet for a minute and then he just said, Sam Cash is king and you have no cash. Which is uh true. When we come back in just a moment.

53:14 How Sam and Mariah begin to turn things around with help from a famous beer journalist, a retro children's toy, and King Midas. Stick around, I'm Guy Raz, and you're listening to how I built this. Hey, welcome back to How I Built This. I'm Guy Raz. So it's the late 1990s and Dogfish Head has a strong cult following, but it also has cash flow problems and it needs to start growing faster.

53:57 Fortunately, the famous beer journalist Michael Jackson, yes, a different Michael Jackson, starts saying some really nice things about the brand. Yeah, and telling people that were making fun of us or or laughing at us, he said, Hey hey, wait a second. Dogfish is a very traditional brewery. If you look thousands of years back, every culture in every region of the world was using local indigenous ingredients. to make beer and in the beer world that gave us you know, we were always thinking beyond beer. Like how can we recontextualize beer and moments like that were impactful. I should mention that Michael Jackson

54:33 Right, like he's that important. Yeah, that's great. Meantime, there's I think I think Another pretty pivotal moment was

54:42 was around this time, sort of the turn of the millennium, around two thousand, when you launch the Ninety minute IPA. And then eventually the sixty minute IPA. These this would become Signature.

54:54 What what first of just can you t explain what is the ninety minute IPA? Yeah, sure. So I PA is uh you know, many centuries old English beer style and basically it was India Pale Ale, right? India Pale Ale and it was basically process, you know, of uh uh an elimination. The English would send beer to the troops in India and just learned through different shipments. If they sent regular mild or regular pale ale, the beer would be spoiled when it got there. So they kinda amplified the alcohol, they added extra hops, very hoppy, more bitter. So those two factors made this more durable, more intense beer style called IPA. So that was already in existence. But

55:35 What we did is kinda took our culinary inspiration into that IPA space. So one morning, I think it was in ninety nine, I was heating up water to brew, and then a Chef Show came on the television above the bar and they were talking about if they added little pinches of crack pepper to a soup the whole time the soup was simmering. That the flavor, the complexity, the nuances of the You know, more gracefully than if they had. Hold on. I'm just saying'cause I c I'm I'll do a lot of cooking. You're saying If you add grinds of pepper throughout the simmering process, it has a different effect than if you just add it all at once.

56:12 Yeah, I r distinctly remember them saying if I took the same volume of pepper in one handful and added it, it would taste all Dislocated and bitter but by adding little tiny doses. it can, you know, give more nuance and complexity. So I'm watching the chef talk about this and I literally I just had a epiphany. I shut off the gas burner on my Brewery and I drove out to the highway to

56:35 Salvation Army store'cause I remembered like this is a place where you get used jeans and flannel shirts and cool stuff like that. And they had one of those old vibrating football games from the sixties or seventies that the little guys would be on the field and it had a vibrating motor under it. And I bought the football game. I drove back to the brewery. I took a five gallon bucket and I perforate holes into it with a with a hand drill and then I duct tape the bucket on some two by fours to the vibring football game. and then filled the the bucket with pelletized hops. and just put a step ladder over my boil kettle and just changing the angle of the football game, I could vibrate the hops out of the bucket, down the vibrating football game, into the boiling beer, with a goal of could I make, you know, one pellet hit the boiling beer for the whole ninety minutes of the boil, one stream of pellets. So it's just like one giant

57:27 Hop edition. This sounds like a very complicated um experiment. Yeah. But by doing this little tiny continual hopping method it made our beers really intensely, aromatically, beautifully hoppy without being crushingly bitter. Like if we added that same volume of hops all at once, the beers would have an unpalatable, lingering bitterness by that volume. Because

57:50 IPAs can be prohibitively can it's like a an obstacle for a lot of people,'cause there are people who do not like happy beer. A lot of people, especially when it's bitter. But this was a way to get people into the hop's door. Without the bitterness. Yeah, exactly. And to start with everyone's like, You're the one and done brewing company. No one's gonna drink more than one of these super strong, super hoppy beers. But when people tried it, they would buy it again. And I remember like being in our in our house and Mariah like Coming outside and being like

58:21 Hey, these guys own a website called Beer Advocate and 90 minutes the best you know, reviewed the highest rated beer on their on their website and they wanna do an interview. And I remember being Simultaneously stunned the A ninety minute was the best selling. Or the highest rated beer. on their website and really surprised that there were people that had a website that rated beer. That's how little I knew about the internet, you know, back then. Yeah.

58:47 There's something about beer, especially craft beer, that just like attracts a certain cult following. And c we know we know from this show. that when you create a niche product that attracts a cult following, it eventually becomes a mass product. Well, like we also started as The anti mass product, right? Like we like our whole craft industry started that way.

59:10 But We were at the right time. coming up in that industry and There was a shakeout in the late nineties that we Navigated.

59:21 They did not survive. Mm-hmm. I mean, I think a lot of people got into it who weren't like all about the beer. They were more like You know, I read about this my crib trend in the Wall Street Journal and I'm gonna make a lot of money and It's like podcasts. Yeah, a lot like podcasts. Yeah. Um but yeah, so so the so

59:40 Yeah, from a branding perspective, what you did But I don't think this was like a a cynical marketing move at all. It was really uh just a passion. You carved out your niche by like Not just experimenting with with different ingredients and weird but doing collaborations. Like one of the first unusual collaboration you did was with a a professor at at Penn.

1:00:00 To resurrect like an ancient Egyptian or you know, Middle Eastern Brewing method,'cause they were brewing beard, you know. Three thousand years ago. Yeah, and that as fate would have it, there was a beer festival at the University of Pennsylvania. The guest speaker was Michael Jackson, who we've already talked about. Yeah. And Michael Jackson got a tap on his shoulder by this guy, Dr. Pat McGovern.

1:00:22 who's said, Hey, I'm a molecular archaeologist and I basically can reverse engineer what they were drinking, you know, the night they buried King Midas and uh and Michael Jackson rest in peace, put us together with Doctor Pat and it formed this awesome relationship where we've you know, we've reversed engineered and kind of these liquid time capsules from ancient China, ancient Italy, ancient Turkey And uh that's been a big big part of our journey. Well. I mean

1:00:53 Amazing and and I I we should mention Michael Jackson. I think he he passed away in two thousand seven. But I mean what a an incredible chance because you know, I remember when this beer came out. because it was a just a natural media story. The beer King Midas drank is now being brewed by this company in Delaware. Yeah, and it's funny'cause it ended up with Sam on a full page spread of people magazine wearing a a crown on his head. But like i we would have never thought People magazine would be interested in our beer, but like

1:01:26 That's Something that afforded us a new audience. And you know, it could have been a fly by night sort of, you know, oh, this is just a little gimmick and I'm sure there were some snickers in the industry where people probably were like uh just a gimmick. But it wasn't actually it did it did it start to sell. People started to buy it. Yeah. Um I think by two thousand four I read uh Dogfish was doing like seven million in revenue.

1:01:49 eight hundred thousand dollars in earnings. So you were you turned it around by then. You guys were Definitely doing pretty well at that point. I will say by that era guy One of the things that was fortunate for us We're always really transparent with our customers and said, You know, this beer had three times the ingredients in it as a normal light lager and we have to charge three times as much for it. So we

1:02:10 Did reap the benefit of that pricing premium we were able to command and that did help a lot with cash flow. So in general we enjoyed at least a decade of double digit annual growth and so that really helped us Yeah. our sort of financial feet under us.

1:02:29 So As you grow. There was an article that came out in two thousand eight in The New Yorker, which You're in a New Yorker, right? That's a pretty awesome place to be. That article.

1:02:39 It talked about how you by that point you had quadrupled in size from two thousand four, so you were doing like forty million revenue, but you still could only meet four fifths of demand, like a fifth of your orders went would go unfilled. I mean, that's great to have such a high demand, but it's also a problem.

1:02:56 Right, because you don't want to not fill those orders. What was happening? We just didn't have the capacity to meet demand. Yeah, we we called our sales team at the time the the sales prevention team. You were telling to stop selling? Well we pulled well at one point we pulled out of a number of states we found like we couldn't supply

1:03:16 As many states as we had opened up, so we retracted. A bit. We didn't want to get. too far out over our skis. That growth was great, but we didn't want to outgrow our people and our processes all at the same time. So we kind of intentionally slowed things down a a little bit.

1:03:34 Yeah. H how how about your relationship, the two of you? I mean Now you're really growing. You've got uh probably by two thousand eight at least a hundred, maybe two hundred employees. Um, you've got distribution channels, you're working with distributors. And you're also raising children.

1:03:52 Have any tension between the two of you have over how to run the business, or was it just very clearly demarcated what Mariah did, what Sam did? Well, I think we had we definitely had different focus areas and that also meant we had natural time apart, which was probably a great thing too. Our desks at the brewery are are literally next to each other. So it's great when we're there together, but it's also great when either one of us is on the road and we get a little space there. We we joke that the window between our two cubicles is actually bulletproof glass. Ha ha

1:04:27 No, I mean uh I I did wanna say though, it w it did put an interesting dynamic on our family as we're as we're raising Sammy, our son, and Greer our daughter for family time, because we do get to travel a lot to do collaborations with breweries around the world. We would choose you know, what trips we could bring Sammy and Greer on so that they could see, you know, what we were doing was not just about making a living, but we were trying to build this community and giving back to our community. So having our kids be part of that instead of feeling guilty about the challenges of quote unquote work life balance, I think, was something we had to learn along the way. Yeah, no, I mean there isn't a work life balance'cause there's no like

1:05:09 demarcation between work and not work really. I mean we we go out to dinner at night where it's it's at an account. Like we go to somewhere on the weekend, like pretty much everywhere sells beer, right? So so we're traveling and Um There is no like okay At this moment we're not gonna talk about work anymore. It's just it doesn't happen. It's not possible.

1:05:31 Yeah. Um, I w I wanna ask you about something that happened in two thousand ten, which it sounds amazing. You were approached by Zero Po, an amazing production company. I know They made famously uh Anthony Bourdain's shows. Mm-hmm. They approached you'cause they wanted to do a show with you, which they did. You eventually Did a deal.

1:05:52 to make a show called Brewmaster, Sam, you are the face of the show. began airing on Discovery. And didn't last for more than five or six episodes. What happened?

1:06:03 You wanna go or you wanna go. No, you go, you're the face of that shelf. You're right. Zero point zero beautiful storytellers and Anthony Bourdain an a amazing inspiration. And so they did an amazing job and they we were really proud of the show that we we made kinda celebrating this blossoming global craft brewing movement. And then the show started airing and Discovery's Offices are actually right down the road from us in DC. And they came and watched it with us and I'll be careful here and I won't say the name of one of the international brewing conglomerates decided they were gonna make custom ads to run during our show. And Mariah are queen of social media and I said

1:06:45 Well, I guess we can't stop you from having them as advertisers, but you know, when our fans talk about that, we're gonna talk to them about it, have a normal conversation about how we feel about that and how they feel about that. And sure enough, after that first episode the interwebs was a chatter and we we said, Yep, that's not a N D craft brewery. It's it's trying to look like one. And then like within two weeks the executives at the network are saying, Oh, a major beer brand is pulling their advertising unless we stop running your show. And to Anthony Bourdain's credit, he jumped on his own social and let people know he started talking about this. Yeah. Yeah He was like Big Beer killed this show. But uh kind of I mean. I'm not trying to take their side, but

1:07:30 Big beer companies saw that the Kraft Beer Revolution was well underway, and so they were making all these they would just throw Brooklyn or some cool word into a beer and But it was really made by like Budweiser and by Anheiser Busch and And cores, right? Yeah, there's a good amount of that going on.

1:07:48 Nothing wrong with it. They're trying to make money too. And at the beers. Not bad and well branded, okay. More power to them. And that and that when I mentioned that we're living in this great moment where this community of sort of misfits found each other. We actually do have a real home, which is we have a trade group called the Brewers Association. And so as craft beer became this movement that left the margins and came towards the center.

1:08:15 We saw these international breweries making beers and selling them as if they came from small local indie breweries. Right. So the the our trade group came together and I was on the board along with Jim Cook and Ken Grossman and Kim Jordan. Now you're talking about everyone's been on how I built this. You got good taste, guy. You got good taste. Uh and so a bunch of us you know, recognize that we needed to come up with a definition of a true independent American craft brewery. So essentially it means if you're over three million barrels or more than twenty five percent owned by a brewery that's over three million barrels, you can't use our trade group's seal that says you're an indie craft brewery and three million Barrel sounds like a lot until you put it in the context of market share, and that means, you know, you're less than, you know, like a five percent or four percent or even even less. Hey Sam, you said three million a couple of times, but isn't it actually six? Yeah, I think it is. Just fact checking you. Thank you for fact checking me, honey. But it's it's very European.

1:09:16 Right, like obviously champagne. You can't must come from champagne. Parma Ham, uh Parmesan. And so this is a version of that. It's like saying, Hey, if you want to call yourself a craft brewery But there's no there's no real legislation backing that, right? Like A big multinational

1:09:32 Company can brew an something and call it craft beer. They may not have your seal of approval on it, but they can still call it craft beer. Right, and and uh and we're up against these international conglomerates. So that's why these smaller businesses really need this definition of of what our businesses are like and then really beers, you know, the beauty's in the eye of the beer holder, and I guess it's up to the consumer to say, I give a shit about that definition or I don't. Um

1:10:01 All right. You get to I mean I think at a certain point you were like Within the top ten. Craft brewers in the US.

1:10:10 Probably by twenty eighteen. So is that about right? Sound sound about right? It does. And

1:10:16 May ninth, twenty nineteen. Announcement comes out. you're being acquired as a m describes a merger. uh with The Boston Beer Company.

1:10:25 Yeah. that you would become part of this bigger Company. Help me understand why why this was a good decision. I mean there was gonna be money involved and

1:10:37 But You were doing great on your own. Why did you feel like it was a better decision to Merge with the the biggest force in craft beer. So I was on the board with

1:10:48 Jim Cook. you know, at the Bruce Association for over a decade. And uh I would see Jim at his booth at the Great American Beer Fest, you know, working his ass off, serving the beer, or listening to him on a radio commercial talking about the Ryan Heights Kabote and the purity of of the brewing. Yeah so I always admired him before we were friends. And then around ten or twelve years ago we did our first collaborative beer with Sam Adams and I remember calling down to Delaware and talking to Mariah. I was like, Oh my God, now I've met other people from Sam Adams and they remind me a lot of our co-workers. They're fun, they're passionate, they're creative, they want to win in the marketplace. And so at some point in our journey, we just started looking at our

1:11:32 our companies and our our values and saw that our values were were very complimentary, but also our portfolios because Boston beer company as Jim and the co workers built it. Yes, it had Sam Adams, the number one craft lager in America, but it also had Angry Orchard, the number one cider in America. It had tea, it had seltzer, whereas dogfish had hoppy ales, it had sours, it had distilled spirits, our canned cocktails as well, which is now you know the fastest growing. Category and the fastest growing part of Dogfish Heads business. Yeah. And the values and sort of that portfolio Trove Mariah and I's decision to do the merger.

1:12:12 Well let me let me ask you about'cause this is important. A lot of people listening Right. they have companies they get to a point where they have to decide, do we take this fork or that fork? And and one fork could be We stay independent like Gary and Kit Ericsson, Cliff Barr, they stayed independent, they continued to grow. But you could also take that fork and it could be a bad decision, right? The market changes, things happen, it it it can be scary.

1:12:33 Yeah. And and what we were also seeing as a independent Craft brewery. is that we w looked around and we were one of the few independent mid size Craft breweries left.

1:12:46 A lot of the big na multinational breeds had been buying up a lot of our peers. So we were like, Okay, well, we can be independent, but we're at this really Awkward. Almost teenage size where

1:12:58 were not fully national, like really deep nationally, and we're we're too big to be just local, you know, and we're independent, and all of our peers are now Not independent. I w not all of them, I would say the majority, maybe eighty percent. But it is Incredible that this

1:13:15 thing that you really didn't need that that much money to start out with. turned into a deal that went for three hundred million dollars. to Boston Beer Company. I mean I'm sure that had you thought about that in nineteen ninety five, you would have thought, that's gonna be an amazing outcome, but you couldn't have imagined that you would build a brand worth three hundred million dollars. That was not part of the original business plan.

1:13:38 And like honestly if we pulled into our brewery like I did yesterday in Milton Delaware and the big tanks that hold, you know, ten thousand cases of beer. We're just filled with sixty minute I would feel like we failed in our Is that still your best seller, by the way? Sixty minute IPA.

1:13:52 Sixty minute IPA is still our best seller, but what what I'm most proud of is we come into this brewery that has some national scale And the the tanks are still filled mostly with beers that have sea salt and lime and monk fruit and pumpkin. We're just brewing them at scale. So the community that we built, like from the smallest brewery in the country in Delaware That's the most rewarding part of it. All right.

1:14:18 There was pushback. Okay, anybody who's seen Portlandia knows what that means. Right. Anytime the band that goes from playing the indie club to the stadium their sellouts. What, you're collaborating with Eldon John?

1:14:31 And cold play? How could you do that? You're not cool anymore. Especially'cause you know, you guys were Wor you know, you got this punk rock aesthetic, you have a brand called Punkin Ale. It's a punk pumpkins on the thing, and there's an aesthetic. you know, kinda fighting against the man, the big guys, and now

1:14:50 You're part of a Big. Company. And there were people who were like, you guys sold out. Did you care when you heard that? Did that sting or were you like, No, those people just don't understand?

1:15:00 Oh of course we cared. But we also expected it. And We hoped that over time they would see that the way we're operating, the partners that we're choosing do still fit into the dogfish that they know and loved.

1:15:14 And for those who that merger was a problem with we had to earn it back and I I hope that we've done that, but The drinkers have to say. And and thankfully now in the world of social media, a lot of that sentiment is quantifiable. So as we went into the merger, we knew of course the smaller of the entities that merges is always gonna take, you know, more of the arrows for the bigger. And so we knew monitoring our social channels that the sentiment would be more negative for us, but it was up to us to continue that real dialogue with our fans to say, no, you know, we're still doing what we're doing in Delaware, we're ac adding jobs, not taking jobs away, investing in the community. Um and had those conversations and soon enough we could see that sort of uptick and

1:15:59 in positive sentiment back into our world. So it takes time and it kinda you have to put your money where your mouth is and never really let the the tail of of inspiration be wagged, you know, by the dog of of money. That's how you say it. So all right. Now you are

1:16:16 Working. as part of this bigger company. And I'm gonna make you uncomfortable here. This is the uncomfortable part of the show. There are a few others, but um you both I mean you y this made you very rich. You have a lot of money. Does it mean anything practically to your life? Does it change anything about the way you live your life? I would say no. And I mean

1:16:36 You know, pre merger. Thanks to the hard work that we've put in and our co workers have put in and a a fair amount of luck. We were already we we made a good living. So nothing really about the merger moment other than the scale of the dollars.

1:16:53 has changed how we live our lives, and we know how lucky we are. But we also know that we love to get up and do the work we've done for twenty seven years. today just as much as we did

1:17:07 when we were fighting to be the one of the smallest breweries and not just the smallest brewery in the country. Alright, so Sam, you answered my luck or skill question. Thank you for preempting it. Appreciate it. Can you tell we we're uh avid listeners? Um Mariah.

1:17:25 What do you think? I mean, I have my take on your story because uh I mean the fact that you met in the cafeteria when you were fifteen or something, you know, and that you're still together. takes hard work too, but I think there's an element of luck there. I don't know what do you think? How what what do you attribute the success of this This business too. Oh, I I don't think it can be either or I think There was

1:17:43 A lot of hard work, different hard work along the way, but There's so much that we've talked about today that is like and then we had this amazing opportunity and then this really cool thing happens. So I think No luck. kind of came to us'cause we were looking to for it. Um, you know, we didn't pass by opportunities that In hindsight.

1:18:03 were really amazing lucky opportunities that we had. And I'll say, you know I go for a paddleboard or or a bike ride pretty much every morning to ear my beer calories. And when I get all the way out, whether it's on water On a bike trail I always kinda say the same mantra which is thank you for this beautiful day, thank you for this beautiful place.

1:18:23 Thank you for my beautiful life and thank you for my beautiful wife. And that is from My days of being a a pretty uh you know, rebellious teenager not knowing where I Where things would go.

1:18:35 The biggest part of luck for me was meeting Right? That's Sam and Mariah Kellioni, founders of Dogfish Head Craft Brewery. Is there anything like totally off limits when it comes to flavoring beers? Like I don't know, like would you use like raw tuna or I don't know, like human saliva, guy. You gotta come back the next time we do our chicha beer and we we chew the corn and That was a good one. I don't think I could drink human saliva beer. I just don't think I could do it. It sold out. Sold out, wow.

1:19:08 We boil it, we boil it. Spit happens. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs and some of my observations about the world, sign up for my newsletter at guyRaz.com or on Substack. This episode was produced by Alex Chung with music composed by Ramteen Arablui. It was edited by Neva Grant with research help from Catherine Cypher. Our production staff also includes Carla Esteves, JC Howard, John Isabella, Chris Massini, Sam Paulson, Carrie Thompson, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

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