← How I Built This with Guy Raz
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- [00:00]
Guy Raz
Wondery subscribers can listen to How I Built this early and ad free right now. Join Wondery in the Wondery app or on Apple Podcasts.
- [00:10]
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- [01:14]
Guy Raz
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- [01:58]
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- [02:00]
Guy Raz
These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease. 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 Calaggione came on the show back in 2022 and they shared how they turned Dogfish Head, from 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 Head's 30th year in business, and as you'll hear, it's been a fun and crazy ride. So enjoy the show.
- [02:52]
Sam Calagione
One of the cool moments was while I was trying to raise the money, Mariah and I went to this regional fest called Pumpkin Chunkin.
- [03:01]
Guy Raz
Right?
- [03:02]
Sam Calagione
I took my home brew pumpkin beer there and kind of muscled the grannies and aunts out of the way that had their cakes and pies in the competition. And our Dogfish had Punkin Ale won the food competition.
- [03:14]
Guy Raz
Wait, you hijacked a baking competition of old women grannies with your beer, which is not even a part of a baking competition, and you won? That's amazing. But that's not fair.
- [03:27]
Mariah Calagione
It didn't say it wasn't for beer.
- [03:29]
Guy Raz
That's true.
- [03:30]
Sam Calagione
Don't hate the player, hate the game. Gain.
- [03:38]
Guy Raz
Welcome to How I Built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Sam and Mariah Calagione made some of the weirdest beers in America and turned 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 Technicolor when Dorothy gets to Oz. Well, for me, it happened in a strawberry patch in Northern California. 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. These are the kinds of moments that sometimes inspire a business idea. And for Sam Calagione, 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 at least to him, mostly meant Budweiser, Coors, and Miller. Sam was a bartender at the restaurant. It was called Nacho Mama's Burritos. And they happened to serve craft beers from Europe. Belgian ales, saisons, beer infused with fruit and spices. And when Sam tried them, it was like Dorothy Entering that world of Technicolor. To say it changed his life sounds cliched, 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. And by 1995, 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. 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 2019, the company sold to Boston Beer Company in a deal worth around $300 million. 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, it was almost like they hired each other first and then decided to get married. After Sam grew up in western Massachusetts, Mariah grew up in Delaware. The two of them met in the late 1980s 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.
- [07:12]
Sam Calagione
The kids had to work their way through school. And so the, you know, we'd be preparing the, the meals, people will 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 impacted, you know, influenced our decisions to be entrepreneurs, which is probably why that school's still such a big part of our lives.
- [07:33]
Guy Raz
Tell me how you guys met each other. Because you're, you're still, you're still together. And this is like 40 years later.
- [07:39]
Sam Calagione
We've been making out with each other since the mid-80s. Yeah, 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.
- [07:55]
Mariah Calagione
Yes. And I do remember us meeting in the dining hall while we worked in the kitchen together for our work job.
- [08:03]
Guy Raz
And how soon after you met did you start dating?
- [08:06]
Mariah Calagione
Well, dating when you're at a boarding school is kind of a loaded term because there's nowhere to go on a date, so.
- [08:12]
Guy Raz
And you probably were not allowed in the, in the girls dorms and the Boys, dorms, right? That was verboten.
- [08:18]
Sam Calagione
It was an intricate dance guy. We had something called visiting hours where you had to essentially be a contortionist because 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 fun challenges for young people dating each other.
- [08:38]
Guy Raz
All right, so you guys are like, you know, high school couple, whatever that means really, in high school. But Sam, you were. I'm kind of understating this. You were kind of a troublemaker in high school to the point where you. And 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? What were you like, what were you doing that got you to that point where you were kicked out?
- [09:07]
Sam Calagione
Well, the technical term for when they did finally kick me out in March of my senior year was accumulation of offenses, 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 friends and playing hockey naked.
- [09:27]
Guy Raz
Just. But I mean, just pranks. These were just pranks you were doing?
- [09:31]
Sam Calagione
Yeah, you know, some.
- [09:31]
Guy Raz
Because they were funny.
- [09:32]
Sam Calagione
Well, and just wanting to like be, you know, I always did want to be like the class clown and kind of use my sense of humor to kind of bring my friends together. It was kind of a social thing. And. And you know, one of them was actually I would wait outside of liquor stores and because 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 onto campus and at a premium, sell beer to the boarding students until I got busted. So it was never really malicious at all. And that's what made it so painful when I got kicked out is because I loved that school. I didn't really show it in a positive way, but in that era I was pretty unwieldy.
- [10:14]
Guy Raz
There's a story that I've read about when your dad came to pick you up and drove you home, and he was obviously you were disappointed. Your parents are disappointed. What do you remember about that?
- [10:31]
Sam Calagione
Yeah, so I lived on the third floor of this boy's dormitory that for whatever reason, the administration school allowed all the troublemakers to be 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 F150 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 my roommates played that's Life by Frank Sinatra, I guess, in homage to my Italian heritage. And then my dad drove me from Northfield back to Greenfield, Mass. Like, a couple towns away where we lived. You could see him, like, you know, jaw, like, clenching, doesn't know if he should say anything. 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 the only sentence I got on my. My way home. 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, the run recoiled, and he hung himself and died. So within 24 hours, I got kicked out of high school.
- [11:46]
Guy Raz
Your dog died.
- [11:47]
Sam Calagione
It sounds like a country music song come to life, but it was a true story and obviously a very traumatizing, you know, in my life.
- [11:55]
Guy Raz
Wow. You just needed a baseball bat to take out the headlights of the truck, and then you really would have a country music song.
- [12:01]
Sam Calagione
Sounds like Footloose.
- [12:02]
Guy Raz
Yeah. Wow. All right, you're kicked out. And Mariah, were you. He was your boyfriend, right? What did your parents say? Were they like, ooh, I don't know, Mariah, Sam seems like trouble. 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. And meantime, your boyfriend's like, I don't know, he's kind of going in a different direction.
- [12:25]
Mariah Calagione
Yep. As far as, you know, guy, I was studying every night and on the straight and narrow. 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 because he did end up going to college, which is the good news of the story.
- [12:46]
Guy Raz
So, Sam, you did manage to go to college. So you got your degree, your high school degree, 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 those four years?
- [13:01]
Mariah Calagione
We did. We did. It was actually cool because our schools were very different, but we also knew each Other's friends very well and enjoyed that different experience that we got to have every once in a while.
- [13:15]
Guy Raz
While you were in college, Sam, at Muhlenberg College, were you a beer guy? And I mean, everybody's a beer person in college at some point, right? You know, but did you think about beer? Did you notice it, appreciate it? Or were you like, kind of a typical college student, just pounding beers?
- [13:35]
Sam Calagione
More like that typical college student, I will say. You know, when I left Muhlenberg the next day, I moved to New York City and English major, I wanted to go take, you know, courses at Columbia where, you know, Ginsburg and Jack Kerouac went. And so I started taking courses in the MFA program up there. But to pay my rent, I worked at a bar across the street from Colombia 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 Chimay Red and Sierra Nevada Celebration. And that's really where I had my epiphany beers and started on the journey.
- [14:13]
Guy Raz
You know, this is like in the early 90s when, I mean, Sam Adams was around, but most bars served probably, you know, Budweiser, Coors, Miller Lite, et cetera.
- [14:23]
Sam Calagione
Yeah, it was really kind of the opening moments of the craft beer renaissance in America. So there were some first gen craft breweries like you mentioned. Sierra Nevada, Anchor Liberty, we sold from your neck of the woods. And Chimay, 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. But what I do remember is being like a voracious reader, I did get like, my, you know, library card at the New York Public Library, and I found books like the Joy of Home Brewing by Charlie Papazian. 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 Sz hops, I was like, holy, this is just as rich as a world of, you know, Fitzgerald short stories or Salinger short stories.
- [15:24]
Guy Raz
Yeah, but Sam, a lot of people, I'm sorry to interrupt. A lot of 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 and sell them. But clearly something clicked in your mind where you were like, this is interesting. What was it?
- [15:55]
Sam Calagione
Well, I think it was about, like, that same, like, rebellious reflection I had in high school of, like, screw the man kind of worldview. 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 is dominated by these samey, you know, monolithic, generic. Frankly, in my view, light lagers made by giant companies. This is. This could be a really cool thing to rebel against.
- [16:26]
Guy Raz
Did you go into that job thinking that you wanted to start a business one day because you went to take writing classes? But it seems to me that maybe actually you really were already thinking about, what could I do? Maybe I could, like, what kind of business could I do? Is that right?
- [16:42]
Sam Calagione
Yeah, I think so. Because, you know, my dad was really entrepreneurial and always kind of presented to that. He always sort of romanticized that. Not in, like, a corny, over the top way, but just he respected that sort of American dream, 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, 4 or 5 years old than me. He'd left, like, the start of a career in tech here in Boston, moved back to New York City, 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.
- [17:33]
Guy Raz
All right, so, Sam, I remember this is like, the early 90s, and home beer brewing kits were, like, kind of becoming all the rage. Maybe they already were. I don't remember. But you bought, like, a home kit to brew your own beer in your apartment?
- [17:48]
Sam Calagione
Yeah. You know, myself and Joshua Mandel tracked down in the New York 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, 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 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 started boiling it in our little tiny apartment.
- [18:41]
Guy Raz
So that, that's interesting because you had been 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 kind of inspired by that and thought, hey, I wonder if I could do something like that with my home beer kit.
- [19:01]
Sam Calagione
Yeah. And it was kind of like a hot mess. Like I didn't bother to read these construction manual or anything. And I bought all these used giant like 32 ounce glass bottles. And the other thing is, it said you could either like sanitize the bottles with the solution or just heat them up in your oven to sterilize them. So I remember I heated them all up in my oven while I was getting the beer ready to be bottled. And I took them out with like tongs and put them down on the floor to cool a half an hour or whatever. I came back to, to pick it up. I was like, what the. And they wouldn't come off the ground.
- [19:31]
Guy Raz
Because it melted the carpet.
- [19:33]
Sam Calagione
It not only melted the carpet, but it affixed the carpet to the bottom of the, of the bottles.
- [19:39]
Guy Raz
Wow.
- [19:40]
Sam Calagione
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 because 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.
- [19:57]
Guy Raz
Who paid for that? That damage to the landlord.
- [20:00]
Sam Calagione
You know, we put another carpet over the circles in the carpet and, and just left.
- [20:06]
Guy Raz
All right, so you, you kind of start this process and you leave it in there and you got to wait for a couple weeks before you try it, right?
- [20:14]
Sam Calagione
Yeah, yeah, yeah. You know, usually as a home brewer, it's awesome to do lots of bottles because 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 of carbonation is like, game on.
- [20:30]
Guy Raz
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? Was your roommate like, dude, what did you do? Or did they just laugh?
- [20:42]
Sam Calagione
They mostly laughed.
- [20:44]
Guy Raz
Yeah.
- [20:44]
Sam Calagione
And I do remember the first time, you know, because it was funny, because I lived randomly with a bunch of 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.
- [21:01]
Guy Raz
Wow.
- [21:02]
Sam Calagione
And Joe Latruglio, the short cop on Brooklyn Nine Nine, was one of our.
- [21:06]
Guy Raz
They were your roommates?
- [21:07]
Sam Calagione
Yeah, they were all in a show called the State on MTV when we were.
- [21:10]
Guy Raz
Oh, yeah. That was a great show.
- [21:13]
Sam Calagione
Exactly. And so the most surreal night was that Mariah came up from Providence the night I served that first home brew. All these guys from the State on MTV came over. Some of them were my roommates. And then Ricky Lake, randomly enough, the talk show host. I'd done some weird episode with her because I was doing a little night work as a. As a model or just side work, and they had me on the show. Like, on it. They had an episode so called When Good Girls Fall for Bad Boys.
- [21:43]
Guy Raz
And you were. Wait, what you do on the Ricky Lake show?
- [21:46]
Sam Calagione
I played a bad boy. And I just remember I didn't treat it very seriously, but she was laughing, and I was like, hey, you want to come over to our house tonight? I made some homebrew. I didn't think we'd hear from her, but we got a knock on our third floor walk up.
- [22:00]
Guy Raz
That's amazing. Amazing. Just side gig that you had as a. As a model.
- [22:06]
Mariah Calagione
But they hired him for Ricki Lake 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.
- [22:16]
Sam Calagione
You just outed Ricki Lake. Mariah.
- [22:18]
Mariah Calagione
Oh, sorry, Ricky.
- [22:21]
Guy Raz
Wow. Who knew? We just blew the lid off Ricky Lake.
- [22:25]
Mariah Calagione
Oh, no.
- [22:26]
Sam Calagione
We love you, Ricki Lake.
- [22:30]
Guy Raz
All right, so Ricki Lake, the cast of the state, and Mariah and you are all crammed into your apartment about to unveil this home brewed cherry English.
- [22:42]
Mariah Calagione
Pale ale with carpet on the bottom of the bottle.
- [22:45]
Guy Raz
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, was it kind of this magical moment that you were introducing to everybody?
- [22:57]
Sam Calagione
It kind of was because I. I didn't know if the beer was good or not. And we opened it up and everyone was surprised. I remember that when they were just like, wow, this is actually really good, Sam. And I do remember drinking one of those whole 32 thingies myself, 32 ounce things, standing on the coffee table and saying, this is what I'm gonna do in my life, guys. I'm gonna open a little brewery that makes beers like this.
- [23:23]
Guy Raz
Wow. So you've got. Everyone likes this beer. And was it. Did it have that, like a sweetness to it or like a sourness to it? I mean, these were sweet cherries. Do you remember whether there was a sweetness to the beer?
- [23:36]
Sam Calagione
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.
- [23:44]
Guy Raz
I wonder what Ricky liked out of the beer. Do you remember?
- [23:47]
Sam Calagione
I remember she liked it too. I don't think there was a single dissenting voice in that group of drinkers.
- [23:55]
Guy Raz
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 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.
- [24:16]
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- [24:58]
Guy Raz
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- [27:04]
Sam Calagione
I remember that the next morning I didn't have to work at Nacho Mama's until dinner shift. So I literally got up and with a hangover walked to the the biggest unit of the New York City library and started doing Lexis and Nexus searches about starting to write a business plan.
- [27:21]
Guy Raz
So you thought right then and there, I'm going to start, I'm going to 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 kind of just throwing things into a bucket and mixing it and hoping it worked out at that point, right?
- [27:40]
Sam Calagione
To some extent. But at that little shop of hops, I bought the book that I first read in the library called the Joy of Home Brewing and Charlie Papazian wrote that book and it's considered sort of the Bible. And so Charlie did a really Great job in the joy of home brewing, of putting into layman terms 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 homebrew. 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.
- [28:19]
Guy Raz
So you're learning about beer, but at this point, you know, you want to make a business out of this, and I guess you decide that you're going to start out by opening a brew pub. Right. Like a restaurant somewhere. But why go in that direction with your business instead of like just making a brand that would bottle beer and sell it to stores or, or something like that?
- [28:42]
Sam Calagione
Well, you know, like I said, I came up in this big Italian family, both sides of my family. My mom's famous for her shrimp scampi, and my grandmother on my Yakavelli calagione side for these crazy chicken cutlets. 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 brewing?
- [29:08]
Guy Raz
Yeah.
- [29:08]
Sam Calagione
You know, and 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 brewing in America committed to brewing the majority of our beers outside the Reinheitzgeboat.
- [29:23]
Guy Raz
And the Reinheitsgeboat is like foreign. It's a German purity laws. You can only use like four ingredients.
- [29:28]
Sam Calagione
Right, Exactly. It basically says, why are you tops barley? That's all you got to choose from.
- [29:33]
Guy Raz
And you were saying, I am not going to adhere to that.
- [29:37]
Sam Calagione
Yeah. You know, and I, I even said we're committed to brewing the majority of our beers using unexpected culinary ingredients. Like our first beers, for example, out of the Gates were beers like Chicory Stout made with organic Mexican coffee and chicory and licorice Root Immortal Ale made with maple syrup from my family's farm up in Massachusetts, juniper berries. And each done oak raison d'etre made with raisins and beet sugars. So right out of the Gates, we were brewing these beers that were not referencing modern beer styles because.
- [30:11]
Guy Raz
Right. I mean, like Sam Adams, for example, prided itself on the Reinheitz Gibbot that it was a beer that could be sold in Germany because it did adhere to those standards. Like, that was a point of pride for a lot of the smaller craft brewers.
- [30:26]
Sam Calagione
Yeah. And 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.
- [30:40]
Guy Raz
Yeah.
- [30:41]
Sam Calagione
And that was amazing. But Mariah and 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, 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 kind of say, I want to go on this journey that really is about culinary inspiration for beverage recipes.
- [31:19]
Guy Raz
The restaurant business is, like, one of the riskiest enterprises you can get into. It is, like, very labor intensive and overhead intensive, and food spoils. Like, it is the riskiest, craziest business to go into. Like, didn't anybody say that to you about the restaurant business?
- [31:37]
Sam Calagione
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 summer jobs. And so when I was raising that money, like it was my. My dad believed in us. 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 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.
- [32:14]
Guy Raz
And these are friends and family. Right, Because I think you raised about 200,000 bucks, right, to do this?
- [32:19]
Sam Calagione
Yep. Yep. Cost 220,000. Yeah. And it was really. I did it. I structured 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 feet under us.
- [32:35]
Guy Raz
Yeah. And, I mean, you clearly have. Both of you now have amazing beer palates. Right. And there are people who have natural palates. Like, you meet, like, wine sommeliers who are just, like, blind tasters. But then there are people who train their palates. But still, that takes time. How did you know at this moment, at this time, that what you were making was good? Did you have people around you who could kind of, I don't know, stress test it?
- [33:05]
Sam Calagione
Well, I mean, certainly our friends getting free beer liked it.
- [33:10]
Guy Raz
That is not the stress test I was expecting.
- [33:13]
Sam Calagione
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, like, Rube Goldberg esque machines that huck pumpkins in a field. And a sort of sideshow of that competition is the baking competition.
- [33:36]
Guy Raz
Right.
- [33:37]
Sam Calagione
I took my homebrew pumpkin beer there. Kind of muscled the grannies and aunts out of the way that had their cakes and pies in the competition. And. And our Dogfish had pumpkin ale won the. The food competition.
- [33:49]
Guy Raz
Wait, you. You hijacked a baking competition of old women grannies 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.
- [34:02]
Sam Calagione
Don't hate the player, hate the game.
- [34:04]
Mariah Calagione
It didn't say it wasn't for beer.
- [34:05]
Guy Raz
That's true.
- [34:06]
Sam Calagione
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 we gotta let him in.
- [34:16]
Guy Raz
And he won. He won this comp. This. I mean, it wasn't like a massive national. It was a local little. But still, that's kind of cool. You won't.
- [34:25]
Sam Calagione
It didn't lead to, like, an SBA loan or anything.
- [34:31]
Guy Raz
And what was in your pumpkin ale?
- [34:35]
Sam Calagione
Same as Dogfish had pumpkin ale today. So it was fresh pumpkin meat, fresh crushed allspice, cinnamon, nutmeg, and then instead of fermenting it with regular sugar, I fermented it with brown, organic brown sugar. And we still use brown sugar in the pumpkin ale today.
- [34:49]
Guy Raz
Wow. All right, so while you're writing this business plan, Mariah, while Sam is writing this plan, what were you thinking? I mean, you were coming out of this August Ivy League institution, and you had lots of options to do many different things. And I wonder, did you immediately think, yes, this is it. This is a great business idea, or were you thinking, maybe Sam will move on, maybe this will be interesting to him for a couple months and then he'll figure something else out?
- [35:18]
Mariah Calagione
No, I mean, I Love the idea of opening the brew pub, particularly, like, as he said, as a restaurant, because 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 TV news up there.
- [35:42]
Guy Raz
Okay. And I guess, I guess you guys go ahead with that plan. But from what I understand, you sort of get cold feet when you find out that there's another brew pub about to open in Providence. You guys were presumably, I think you were hoping to be the first ones there. So at that point, do you start to look elsewhere? Like at another city?
- [36:04]
Sam Calagione
Yeah, yeah. So, you know, Mariah and I talk it through and we were kind of like, well, let's see, what's another state close to New England where we are right now, that has yet to have a brewery opening post prohibition? And it happened to be Mariah's home state of Delaware, where we worked in the summers of our college years.
- [36:22]
Mariah Calagione
And at the same time, my dad called and he said, hey, there was a group that was trying to open a brew pub in Rehoboth Beach, Delaware, but they're not opening. So we said, okay, let's control, alt, delete all the providences in this business plan and replace with romance Beach, Delaware.
- [36:40]
Guy Raz
Yeah.
- [36:41]
Sam Calagione
And I also knew that beautiful coastal Delaware is, you know, pretty much two hours from D.C. baltimore, Philly, three and a half from Manhattan. So it actually be like an ideal hub to eventually distribute beer to major metro markets.
- [36:58]
Guy Raz
So you get out of Delaware and what. What's available there? Where? And this is Rehoboth Beach, Delaware.
- [37:04]
Sam Calagione
Yeah. Yeah. Mariah and I, you know, found a building that was just a few blocks off the beach in Rehoboth, where it was called, like, I don't remember. Mariah, do you remember what they used to call that part of town?
- [37:16]
Mariah Calagione
The. The part of town where businesses went to die.
- [37:20]
Sam Calagione
We like the sound of that.
- [37:22]
Mariah Calagione
So that's, for us, 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.
- [37:34]
Guy Raz
Yeah. All right, so, okay, you guys find this place and you come up with a name for it. Dogfish Head Brewings and Eats. And by the way, how did you come up with that name?
- [37:44]
Sam Calagione
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, kind of like the rustic, woodsy beers. But I also liked how it 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.
- [38:12]
Guy Raz
Right. So you didn't want to call, like, Delaware Brewing Company.
- [38:16]
Sam Calagione
Yeah.
- [38:17]
Guy Raz
Or like the First State Brewing or something like that.
- [38:20]
Sam Calagione
Exactly.
- [38:21]
Guy Raz
Or Delaware Classic. Right.
- [38:25]
Sam Calagione
You could get that T shirt on the boardwalk guy.
- [38:28]
Guy Raz
Exactly. All right, so you. So, so you find this location in Rehoboth beach to open up. How many seats was it going to have?
- [38:37]
Mariah Calagione
I feel like it was like 120 and then plus the deck.
- [38:40]
Guy Raz
So that's a, that's a big, decent sized restaurant.
- [38:42]
Mariah Calagione
Yeah, it was two stories. I mean, it was, it had a lot of space.
- [38:45]
Guy Raz
Yeah.
- [38:45]
Sam Calagione
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 had this reputation of not being a well run place. But literally, 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 so the first surreal moment was I unscrew their sign and I take it off and there's a side of another failed restaurant behind that underneath.
- [39:29]
Guy Raz
So this is a really good, good omen. Like one fail, two fail. And now here you go.
- [39:34]
Sam Calagione
It gets worse. It gets worse, guy. Because then I'm like, okay. And so I screw the Dogfish Brewings in Eats side, and 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 brewery in Delaware and they 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 because 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.
- [40:15]
Guy Raz
Wow. 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 sound a headache with all the things you're already dealing with, just 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?
- [40:36]
Sam Calagione
So literally that same day that we ripped two old restaurant signs 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? And she's like, oh, go left onto Lockerman. Blah, blah, blah. So I found the right road and I rolled down my windows and I was kind of like, all right, which one of these is the House of Representatives?
- [40:55]
Guy Raz
This is the state capitol building.
- [40:56]
Sam Calagione
Yeah, I guess that's what it would be. And I walked through the little security thing, and I get on the other side 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 they were really sweet. I mean, they were like, well, son, you're gonna have to write a bill. And they open their doors. And I think that's something that I want to give. Shouts to the state of Delaware. It's a super business friendly state. What do you think of its history? From dupont to Gore to agricultural shell companies?
- [41:28]
Guy Raz
Yeah.
- [41:32]
Sam Calagione
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 the senator, you know, signed that bill. And it actually turned into this just kismet moment because all of a sudden our state's biggest newspapers are writing, 24 year old kid, you know, foolishly rents a restaurant to open a brewery. It's illegal. And he has to go to Dover.
- [42:03]
Guy Raz
To change the law.
- [42:05]
Sam Calagione
Yeah. So people were kind of rooting for us to get.
- [42:07]
Guy Raz
I'm sure. I mean, what, what? You couldn't have bought better publicity around that.
- [42:12]
Sam Calagione
And then subsequently after that, we became really friendly with those good folks in Dover through the years.
- [42:17]
Guy Raz
All right, so you get this law passed. Brewing is legal in the state of Delaware.
- [42:23]
Sam Calagione
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 kind of like one of those post prohibition moments of, wow, we made this happen.
- [42:35]
Guy Raz
Yeah. June 23, 1995, you open the restaurant. This is. It's now fully open. Right. How was business that first summer?
- [42:44]
Mariah Calagione
It was good. I mean, people came in, people wanted to explore. We had a lot of people ordering their standard beers, and we'd explain that we didn't sell those beers. We made our own beers. So every customer was a teaching opportunity, I guess.
- [43:01]
Guy Raz
I mean, most people's palates at that time was like, you know, your standard Coors and Miller Lite and maybe Sam Adams, which is a great beer, but was not as radical as what you were. You guys were doing. Were there people who were like, not for me.
- [43:21]
Sam Calagione
Yeah. I mean, especially once we open. You know, necessity's the mother of invention. And the fact that we couldn't afford a full scale, you know, commercial brewing system and had to start with tiny little pots and pans, you know, making 12 gallons of beer in the corner of our. Our restaurant. It was actually a blessing in disguise because 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 groups. I would ask the customers who cared enough to visit this crazy little brewery, hey, did you like the batch that. 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.
- [44:08]
Mariah Calagione
And they actually paid us to do that, which was kind of helpful.
- [44:13]
Sam Calagione
And back then, I would hand out, like, file cards when we'd hand people beers and 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. I don't know if that's a good thing or a bad thing, but probably fair point.
- [44:41]
Guy Raz
One of the things about what you were doing was that it was expensive, right? You were using a higher volume of grains and expensive, you know, dried fruits and sugars. And so you had to sell your beer for more money. You know, a pint of beer might be like, double the price of a pint of Budweiser or Miller Lite. Did you have to educate people around that?
- [45:06]
Mariah Calagione
Yeah. To a degree. But that's the education we were doing anyway to explain to them what the different beer was in the first place. So I think it kind of worked hand in hand. You know, I think in the bigger context, you know, beer is pretty much an affordable thing to splurge on.
- [45:21]
Guy Raz
Right.
- [45:22]
Mariah Calagione
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 our beer at our place. And I think people appreciated that it was going to cost more because they knew why. I think, you know, they saw it being made.
- [45:40]
Guy Raz
Right. So from what I understand, in initially, maybe in the first, at least year, you were brewing all of the beer for this restaurant in 15 gallon kegs on propane burners. That's not a lot of beer for a restaurant that has 150 seats every night. So what? Just help me understand how you were brewing enough beer. What were you doing?
- [46:03]
Sam Calagione
Yeah, so I had 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 cell. We would shut at midnight or 1, and then I'd start brewing, you know, before the day would get hot. You'd want to start brewing by, you know, eight in the morning or so. So five or six days a week, I would triple brew, you know, 12 gallon batches. It worked fine. I would use the hose before people got there in the brewery for my showers. And Mariah had a real job because we needed insurance.
- [46:38]
Guy Raz
What were you doing, Mariah? What was your real job?
- [46:40]
Mariah Calagione
I was working in local TV news in Salisbury, Maryland.
- [46:44]
Guy Raz
On camera?
- [46:45]
Mariah Calagione
Mostly off camera. I prefer that.
- [46:49]
Guy Raz
But you what, were doing that in the day, daytime, and come in the restaurant at night?
- [46:52]
Mariah Calagione
Yeah, I would come in and bus tables or work at the front door, do some dishes, whatever needed to be done.
- [46:58]
Guy Raz
And Sam, you were doing. You were brewing the beer and doing payroll and doing the shifts and the schedules and stuff like that.
- [47:05]
Mariah Calagione
Oh, he wasn't doing payroll.
- [47:06]
Sam Calagione
They don't trust me with the mask.
- [47:08]
Mariah Calagione
Let's be clear. Come on.
- [47:10]
Sam Calagione
No one trusts me with a math guy. 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 to get the bands on stage and.
- [47:23]
Guy Raz
Oh, you would do live music?
- [47:25]
Sam Calagione
Yeah, like the Holy Trinity was original beer, original food, original music. We also refused to have any cover artists, which, you know, 93% of the bands that play back Then were Jimmy Buck graphic 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 going to go away and trying to get other sort of entrepreneurs to choose us as their preferred watering hole. Those were the kinds of work I was doing as well as brewing.
- [47:59]
Guy Raz
All right, so you've got the restaurant going, but it's very rare for any business, let alone a restaurant, to break even or become profitable in the first year. I'm assuming that you were not profitable in your first year.
- [48:15]
Sam Calagione
The restaurant actually did pretty darn well, like right out of the gates, bringing people in. But what did become challenging is I knew that our recipes were unique nationally by that focus on the culinary. I knew that if I could start distributing the beers to cities like dc, Baltimore, Philly, Manhattan, and I could get the Washington Post to write about a beer made with raisins or the fully inquire to write about a beer made with chicory, or that would help our brand grow disproportionate to our tiny scale down in coastal Delaware.
- [48:51]
Guy Raz
Right, because 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.C. yes.
- [49:01]
Sam Calagione
And that kind of 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, you know, usually people would let us in their door for say, hey, we want to throw an impromptu happy hour for your editorial staff or your writers. And that really helped us start getting national attention.
- [49:30]
Guy Raz
So what, Mariah, what gave you the confidence to leave your job in television to go full time? Because I think full time, 1997, you joined the company full time.
- [49:42]
Mariah Calagione
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. My last job in TV 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.
- [50:24]
Guy Raz
Needed to be able to do, like accounting.
- [50:26]
Mariah Calagione
Accounting and HR and ttb or Tobacco Tax Bureau were excise tax forms twice a month. But I learned. I learned a lot.
- [50:35]
Sam Calagione
And while this is happening, we also went headfirst into starting a family. So it was definitely an intense time for. For us as a couple and as entrepreneurs.
- [50:46]
Guy Raz
You know, it's remarkable to me when I meet people who met when they were teenagers or kids, because that is so rare.
- [50:54]
NerdWallet
Right.
- [50:54]
Guy Raz
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, people, marriages don't last or whatever it is. Right. But, I mean, part of it is luck that just two of you guys happened to be compatible and liked each other. But I'm just curious, Sam, from your perspective, because you married very well, right? Like, you married somebody very smart and who was, like, the brains of the operation. A dogfish head, Right. In Mariah, did you see somebody who could be, like, you know, not just life partner, but like a business partner?
- [51:30]
Sam Calagione
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 complementary superpowers that take on the big bad guy. You know, a giant corporation or some monolithic industry. And so, you know, to use the Marvel universe, 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 Mariah's definitely always been more like the Professor X. Like, she could read my mind and could kind of see the lay of the whole land, cultivating and nurturing creative ideas that I have into a direction that's positive for Dogfish, but just also for us as a family.
- [52:20]
Guy Raz
All right, so at this point, both of you are working at Dogfish Head full time, and you're starting to take your beer outside of Delaware, trying to get some national attention. And. And so how exactly were you doing that? Like, were you marketing mostly to small bars, or were you also, I don't know, trying to get into, like, some big stores or, like, some of the big restaurant chains?
- [52:43]
Sam Calagione
So we knew as we were growing, making these really exotic beers, it's not like the biggest chain Applebee's 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 know you did 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 70s, early 80s, that whole concept of getting a van as a band, and you go across the country and you find this grassroot, networks of other.
- [53:19]
Guy Raz
People, venue to venue.
- [53:20]
Sam Calagione
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 grassroots network of hardcore craft beer bars and restaurants that prided themselves on exotic lists. And that's where I would drive to when I go to Pittsburgh or Hartford or wherever and I try to do a beer dinner and talk to the local newspaper. And really, it was like the Sonic Youth model of growing a brewing company.
- [53:50]
Guy Raz
Yeah, I read a story about a beer event that you were at Sam in 97. So you're still in your late 20s, 28 maybe, around then. And this was an August crowd of beer makers, and you stood up to talk about this new beer you were making with apricot puree. What happened?
- [54:13]
Sam Calagione
Yeah, I was at the Brick Skeller, which was a mecca. Oh, in D.C. yeah, you remember that, don't you?
- [54:19]
Guy Raz
Famous bar.
- [54:20]
Sam Calagione
It had, like, the most beers available under one roof. And. Yeah, so I'm there. And they were, like, one of the first places to host these brewers dinners. Like, we 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, 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 pureed 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.
- [55:12]
Guy Raz
But. But at that moment, did you feel kind of, like, upset, or did you. Were you confident that you were onto something?
- [55:18]
Sam Calagione
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 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 going to go bankrupt. Like, late 90s. Right, Mariah?
- [55:46]
Mariah Calagione
Yeah, I got really good at disguising my voice when our grain purveyor would call and ask for money, and I'd be like, oh, no, they're not here.
- [55:54]
Guy Raz
You know, 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?
- [56:05]
Mariah Calagione
Well, anytime 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 make more beer without investing in more tanks and more bottling lines and more. So we were living hand to mouth, and any money that we got in, we were putting right back, whether it was into our people or our ingredients.
- [56:26]
Sam Calagione
Or our equipment, 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 1950s and was sent to America as part of a Cold War initiative to screw up American manufacturing. And we literally paid a guy who was a very skittish and wore ski goggles to just stand behind the bottling line and push valve number seven down as his job because the machine didn't work. And literally, I think 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 want to put in this amount of money. And I don't know if it was 100,000 or it was some meaningful amount, but I do want minority equity stake, and we're going to form a board of directors. And we're like, oh, okay, let's do that.
- [57:23]
Guy Raz
Okay.
- [57:24]
Sam Calagione
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 true.
- [57:44]
Guy Raz
When we come back in just a moment, 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. A major challenge that many employers face is the pressure to hire quickly. It's a tough hurdle to overcome because it can be incredibly time consuming to search for great candidates and sort through applications. Well, if you're an employer who can relate, I have one question for you. Have you tried ZipRecruiter? ZipRecruiter has figured out how to solve this very problem. In fact, four out of five employers who post on ZipRecruiter get a quality candidate within the first day. And right now you can try ZipRecruiter for free at ZipRecruiter.com build ZipRecruiter's powerful matching technology works fast to find top talent so you don't waste valuable time or money. So relax employers and let ZipRecruiter speed up your hiring.
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Guy Raz
Just go to ziprecruiter.com bilt right now.
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- [59:10]
Guy Raz
That's the same price as a genuine smile from a stranger, a a picture perfect sunset or a cute dog running up to you and licking your hand. Again, that's ziprecruiter.combilt ziprecruiter the smartest way to Hire do you experience excessive bouts of money stress? Do you avoid your bank balance like it's a text from an ex? Do you feel guilt and second guessing about your spending? If you answered yes, you may be suffering from financial funko. Ynab, spelled Y N A B is a life changing app designed to cure financial funk with a simple method that offers total control of your money. The average YNAB user reports saving close to $600 in their first month and 6,000 in their first year. Side effects may include less financial stress, getting better sleep, and eliminating arguments about money. Using YNAB may be habit forming. Before starting, ask your wallet if adding more joy to every Day, Every Dollar is right for you. Listeners of How I Built this can claim an exclusive 3 month trial subscription for free with no credit card required@ynab.com built Life is short. Spend it well with YNAB. Hey, welcome back to How I Built this. I'm Guy Raz. So it's the late 1990s and dogfish head has a strong culture following, but it also has cash flow problems and it needs to Start growing faster. Fortunately, the famous beer journalist, Michael Jackson. Yes. A different Michael Jackson starts saying some really nice things about the brand.
- [60:59]
Sam Calagione
Yeah. And telling people that were making fun of us or laughing at us. He said, 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 and distribution ingredients to make beer. And in the beer world, that gave us, you know, we were always thinking beyond beer. How can we recontextualize beer? And moments like that were impactful.
- [61:24]
Guy Raz
I should mention that Michael Jackson to beers like Robert Parker to wine. Right. Like he's that important.
- [61:30]
Sam Calagione
Yeah, that's great.
- [61:31]
Guy Raz
Meantime, there's, I think, I think another pretty pivotal moment was around this time, sort of the turn of the millennium, around 2000, when you launch the 90 minute IPA, and then eventually the 60 minute IPA.
- [61:45]
Mariah Calagione
These.
- [61:45]
Guy Raz
This become signature beers for you. What, What? First of. Just. Can you explain what is the 90 minute IPA?
- [61:53]
Sam Calagione
Yeah, sure. So IPA is, you know, many centuries old English beer style.
- [61:58]
Guy Raz
And basically it was India Pale Ale. Right.
- [62:00]
Sam Calagione
India Pale Ale. And it was basically processed, you know, 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 kind of 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 what we did is kind of took our culinary inspiration into that IPA space. So. So one morning, I think it was in 99, I was heating up water to brew. Then a chef show came on the television above the bar, and they were talking about if they added little pinches of cracked pepper to a soup the whole time the soup was simmering, that the flavor, the complexity, the nuances of the pepper would be woven into that soup more gracefully. And then if they added, wait, hold.
- [62:55]
Guy Raz
On, 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?
- [63:05]
Sam Calagione
Yeah. I 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 give more nuance and complexity. So I'm watching the chef talk about this, and I literally. I just had an epiphany. I shut off the gas burner on my brewery, and I drove out to the highway to Salvation army store. Because 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 60s or 70s 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 perforated holes into it with a, with a hand drill. And then I duct taped the bucket on some two by fours to the vibrating 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 90 minutes of the boil. One stream of pellets. Pellets. So it's just like one giant hop edition.
- [64:21]
Guy Raz
This sounds like a very complicated experiment.
- [64:25]
Sam Calagione
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.
- [64:43]
Guy Raz
Because IPAs can be prohibitively. They can. It's like an obstacle for a lot of people because there are people who do not like hoppy beer. A lot of people, especially when it's bitter. But this was a way to get people into the hops door without the bitterness.
- [64:59]
Sam Calagione
Yeah, exactly. And to start with, everyone's like, you're the one and done brewing company. No one's going to drink more than one of these super strong, super hoppy beers. But when people tried it, they would buy it again. I remember like being in our, in our house and Mariah like coming outside and being like, 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. They want to do an interview. And I remember being simultaneously stunned that a 90 minute was the best selling or the highest rated beer on their website. And really surprisingly, there were people that had a website that rated beer. That's how little I knew about the Internet, you know, back then.
- [65:40]
Guy Raz
Yeah, there's something about beer, especially craft beer, that just like attracts a certain cult following. And 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.
- [65:56]
Mariah Calagione
Well, like, we also started as the anti mass product. Right. Like, we, like our whole craft industry started that way. But we were at the right time coming up in that industry. And there was a shakeout in the late 90s that we navigated.
- [66:12]
Guy Raz
And the shakeout meant that a lot of small brew pubs closed. They did not survive.
- [66:17]
Mariah Calagione
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 microbrewery trend in the Wall Street Journal and I'm going to make a lot of money.
- [66:27]
Guy Raz
And it's like podcast.
- [66:29]
Mariah Calagione
Yeah, a lot like podcasts. Yeah.
- [66:31]
Guy Raz
But, yeah. So from a branding perspective, what you did, I don't think this was like a cynical marketing move at all. It was really just a passion. You carved out your niche by like, not just experimenting with different ingredients and weird, but doing collaborations. Like, one of the first unusual collaborations you did was with a professor at Penn to resurrect like an ancient Egyptian or, you know, Middle Eastern brewing method, because they were brewing beer, you know, 3,000 years ago.
- [67:03]
Sam Calagione
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.
- [67:11]
Guy Raz
Yeah.
- [67:11]
Sam Calagione
And Michael Jackson got a tap on his shoulder by this guy, Dr. Pat McGovern, who 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 Michael Jackson, rest in peace, put us together with Dr. 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 that's been a big, big part of our journey.
- [67:45]
Guy Raz
Wow. I mean, amazing. And I wish I mentioned Michael Jackson. I think he passed away in 2007. But I mean, what an incredible chance because, you know, I remember when this beer came out, because it was just a natural media story. The beer King Midas drank is now being brewed by this company in Delaware.
- [68:05]
Mariah Calagione
Yeah. And it's funny because it ended up with Sam on a full page spread of People magazine wearing a crown on his head. But, like, we would have never thought People magazine would be interested in our beer. But, like, that's something that afforded us a new audience.
- [68:23]
Guy Raz
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, Ugh. Just a gimmick. But it wasn't actually. It did start to sell. People started to buy it. Yeah, I think by 2004, I read Dogfish was doing like 7 million in revenue, $800,000 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.
- [68:51]
Sam Calagione
Guy, one of the things that was fortunate for us, we were 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 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 get our sort of financial feet under us.
- [69:23]
Guy Raz
So as you grow. There was an article that came out in 2008 in the New Yorker, which. You're in the New Yorker, right? That's a pretty awesome place to be, that article. It talked about how you, by that point you had quadrupled in size from 2004. So you were doing like 40 million revenue, but you still could only meet 4/5 of demand. Like a fifth of your orders would go unfilled. I mean, that's great to have such a high demand, but it's also a problem. Right, because you don't want to not fill those orders. What was happening? We just didn't have the capacity to meet demand.
- [69:56]
Mariah Calagione
Yeah, we called our sales team at the time, the sales prevention team.
- [70:02]
Guy Raz
You were telling to stop selling.
- [70:04]
Mariah Calagione
Well, we pulled at one point, we pulled out of a number of states. We found like, we couldn't supply 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 little bit.
- [70:28]
Guy Raz
Yeah, how. How about your relationship, the two of you? I mean, now you're really growing. You've got probably by 2008, at least 100, maybe 200 employees. You've got distribution channels, you're working with distributors, and you're also raising children. Did you guys ever sort of have any tension between the two of you over how to run the business, or was it just very clearly demarcated what Mariah did, what Sam did?
- [70:56]
Mariah Calagione
Well, I think we definitely had different focus areas and. And that also meant we had natural time apart, which was probably a great thing, too. Our desks at the brewery 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.
- [71:14]
Sam Calagione
We joked the window between our two cubicles is actually bulletproof glass. No. I mean, I did want to say, though, 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.
- [71:59]
Mariah Calagione
Yeah, no, I mean, there isn't a work life balance because there's no, like, 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.
- [72:14]
Sam Calagione
So.
- [72:14]
Mariah Calagione
So we're traveling and there is no, like, okay, at this moment, we're not going to talk about work anymore.
- [72:22]
Guy Raz
It's just.
- [72:23]
Mariah Calagione
It doesn't happen. It's not possible.
- [72:25]
Guy Raz
Yeah. I want to ask you about something that happened in 2010, which sounds amazing. You were approached by Zero Point Zero, an amazing production company. I know they made famously, Anthony Bourdain shows. They approached you because they wanted to do a show with you, which they did. You eventually did a deal to make a show called Brewmaster Sam. You are the face of the show. It began airing on Discovery and didn't last for more than five or six episodes. What happened? It was a pretty good show.
- [72:57]
Sam Calagione
Brian, you want to go?
- [72:58]
Mariah Calagione
No, you go. You're the face of that show.
- [73:01]
Sam Calagione
Thanks. You're right. 0.0 beautiful storytellers and Anthony Bourdain, an amazing inspiration. And so they did an amazing job. And they. We were really proud of the show that we. We made kind of 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 D.C. 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 going to make custom ads to run during our show. And Mariah, our queen of social media, and I said, 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. 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 indie 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.
- [74:15]
Guy Raz
He started talking about this.
- [74:17]
Sam Calagione
Yeah, yeah.
- [74:18]
Guy Raz
He was like, big beer killed this show. But kind of. I mean, I'm not trying to take their side, but big beer companies saw that the craft beer revolution was well underway, and so they were making all these. They would just throw Brooklyn or some cool word into a beer, but it was really made by, like, Budweiser and by Anheuser Busch and Coors, Right?
- [74:37]
Sam Calagione
Yeah, there's a good amount of that going on.
- [74:41]
Guy Raz
Hey, nothing wrong with it. They're trying to make money, too. And if the beer's not bad and well branded, okay, more power to them.
- [74:49]
Sam Calagione
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 called the Brewers Association. And so as craft beer became this movement that left the margins and came towards the center, we saw these international breweries making beers and selling them as if they came from small, local indie breweries. So our trade group came together, and I was on the board along with Jim Cook and Ken Grossman and Kim Jordan.
- [75:21]
Guy Raz
Now you're talking about. Everyone's been on how I built this.
- [75:23]
Sam Calagione
All the beer brewers. You got good taste, guy. You got good taste. 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 3 million barrels or more than 25% owned by a brewery that's over 3 million barrels, you can't use our trade group's seal that says you're an indie craft brewery. And 3 million barrels sounds Like a lot, until you put it in the context of market. And that means, you know, you're less than, you know, like a 5% or 4% or even less.
- [75:58]
Mariah Calagione
Hey, Sam, you said 3 million a couple times, but isn't it actually 6?
- [76:02]
Sam Calagione
Yeah, I think it is.
- [76:03]
Mariah Calagione
Just fact checking you.
- [76:04]
Sam Calagione
Thank you for fact checking me, honey.
- [76:08]
Guy Raz
But it's very European, right? Like, obviously, champagne must come from champagne, Parma, ham, 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 real legislation backing that. Right. Like, a big multinational company can brew something and call it craft beer, they may not have your seal of approval on it, but they can still call it craft beer.
- [76:34]
Sam Calagione
Right. And we're up against these international conglomerates, so that's why these smaller businesses really need this definition of what our businesses are like. And then really, beers, 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.
- [76:55]
Guy Raz
All right, you get to. I mean, I think at a certain point, you were, like, within the top 10 craft brewers in the U.S. probably by 2018. Is that about right? Sound about right?
- [77:08]
Sam Calagione
It does.
- [77:09]
Guy Raz
And May 9, 2019, announcement comes out. You're being acquired, as describes a merger with the Boston Beer Company, makers of Sam Adams, that you would become part of this bigger company. Help me understand why this was a good decision. I mean, there was going to be money involved, but you were doing great on your own. Why did you feel like it was a better decision to merge with the biggest force in craft beer?
- [77:40]
Sam Calagione
So I was on the board with Jim Cook, you know, at the brewers association for over a decade. And I would see Jim at his booth at the Great American Beer Fest, you know, working his ass off serving the beer, or listen to him on a radio commercial talking about the Reinheitzkeboat and the purity of. Of the brewing. Yeah. So I always admired him before we were friends. And then around 10 or 12 years ago, we did our first collaborative beer with Sam Adams. And I remember calling down to Delaware to talk 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. Our companies and our values and saw that our values were. Were Very complementary, but also our portfolios because Boston Beer Co. 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.
- [78:59]
Guy Raz
Yeah.
- [78:59]
Sam Calagione
And the values and sort of that portfolio drove Mariah and I's decision to do the merger.
- [79:05]
Guy Raz
Well, let me, let me ask you about, because this is important, a lot of people listening, right? They have companies, they get to a point where they have to decide we take this fork or that fork and one fork could be we stay independent like Gary and Kit Erickson, Clif Barr, they stayed independent, they continue to grow. But you could also take that fork and it could be a bad decision. Right. The market changes, things happen. It can be scary.
- [79:26]
Mariah Calagione
Yeah. And what we were also seeing as an independent craft brewery is that we looked around and we were one of the few independent mid sized craft breweries left. A lot of the big multinational breweries 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 we're not fully national, like really deep nationally and we're too big to be just local, you know, and we're independent. And all of our peers are now not independent. Not all of them. I would say the majority, maybe 80%.
- [80:06]
Guy Raz
But it is incredible that this thing that you really didn't need that much money to start out with, turned into a deal that went for $300 million to Boston Beer Company. I mean, I'm sure that had you thought about that in 1995, you would have thought that's going to be an amazing outcome. But you couldn't have imagined that you would build a brand worth $300 million.
- [80:27]
Mariah Calagione
That was not part of the original business plan.
- [80:31]
Sam Calagione
And like, honestly, if we pulled into our brewery like I did yesterday in Milton, Delaware, and the big tanks that hold, you know, 10,000 cases of beer were just filled with 60 minute. I would feel like we failed in our.
- [80:43]
Guy Raz
Is this to your bestseller, by the way? 60 Minute IPA.
- [80:46]
Sam Calagione
60 Minute IPA is still our best seller. But what I'm most proud of is we come into this brewery that has some national scale and the tanks are still filled mostly with beers that have sea salt and limes. 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.
- [81:11]
Guy Raz
All right? There was pushback. Okay? Anybody who's seen Portlandia knows what that means, right? Anytime the band goes from playing the indie club to the stadium, they're sellouts. What, you're collaborating with Elton John and Coldplay. How could you do that? You're not cool anymore. Especially because, you know, you guys were. You know, you got this punk rock aesthetic. You have a brand called Punk and Ale. It's a punk Pumpkins on the thing. And there's an aesthetic, you know, kind of fighting against the man, the big guys. And now 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.
- [81:54]
Mariah Calagione
Oh, of course we cared. But we also expected it. I mean, 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. And for those who that merger was a problem with, we had to earn it back. And I hope that we've done that. But the drinkers have to say, and.
- [82:17]
Sam Calagione
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 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 adding jobs, not taking jobs away, investing in the community, and had those conversations. And soon enough, we could see that sort of uptick in positive sentiment back into our world. So it takes time, and it kind of. You have to put your money where your mouth is and never really let the tail of inspiration be wagged by the dog of money, if that's how you say it.
- [83:07]
Guy Raz
So, all right, now you are working as part of this bigger company, and I'm going to make you uncomfortable here. This is the uncomfortable part of the show. There are a few others, but you both. I mean, this made you very rich. You have a lot of money. Does that mean anything practically to your life? Does it change anything about the way you Live your life.
- [83:27]
Sam Calagione
I would say no. And I mean, you know, pre merger, thanks to the hard work that we've put in and our co workers have put in and a fair amount of luck, we were already. We made a good living. So nothing really about the merger moment other than the scale of the dollars has changed how we live our lives. And we know how lucky we are to be able to say that. But we also know that we love to get up and do the work we've done for 27 years today just as much as we did when we were fighting to be one of the smallest breweries and not just the smallest brewery in the country.
- [84:07]
Guy Raz
All right, so, Sam, you answered my luck or skill question. Thank you for preempting it. Appreciate it.
- [84:12]
Mariah Calagione
Can you tell we're avid listeners.
- [84:17]
Guy Raz
Mariah, what do you think? I mean, I have my take on your story because, I mean, the fact that you met in the cafeteria when you were 15 or something 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? What do you attribute the success of this business to?
- [84:33]
Mariah Calagione
Oh, I don't think it can be either or. I think there was 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 the luck kind of came to us because we were looking for it. You know, we didn't pass by opportunities that, in hindsight, were really amazing lucky opportunities that we had.
- [85:00]
Sam Calagione
I'll say. You know, I go for a paddle board or a bike ride pretty much every morning to earn my beer calories. And when I get all the way out, whether it's on water, on a bike trail, I always kind of say the same mantra, which is, thank you for this beautiful day, thank you for this beautiful place, thank you for my beautiful life, and thank you for my beautiful wife. And that is from my days of being a pretty, you know, rebellious teenager, not knowing where I. Where things would go. The biggest part of luck for me was meeting Mariah.
- [85:35]
Guy Raz
That Sam and Mariah Kelly, 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?
- [85:46]
Sam Calagione
Or, I don't know, like, well, we've used human saliva. Guy, you gotta come back the next time we do our chicha beer. We chewed the corn and that was a good one.
- [85:56]
Guy Raz
I don't think I could drink human saliva beer. I just don't think I could do it.
- [86:00]
Mariah Calagione
It's sold out.
- [86:01]
Guy Raz
Sold out. Wow.
- [86:02]
Sam Calagione
We boil it. We boil it. Spit happens.
- [86:07]
Guy Raz
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@guyraz.com or on substack. This episode was produced by Alex Alex Chung, with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Kathryn Seifer. Our production staff also includes Carla Estevez, J.C. howard, John Isabella, Chris Masini, Sam Paulson, Kerry Thompson, and Elaine Coates. I'm Guy Raz and you've been listening to How I Built this. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime. Members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey it takes a lot to grow your business. You've got to attract audiences, score leads, manage all the channels. It's a lot of long days and late nights, but with Breeze HubSpot's new AI tools, it's never been easier to be a marketer and crush your goals fast. Which means pretty soon your company will have a lot to celebrate. Like 110% more leads in just 12 months. Visit HubSpot.com marketers to learn more.