CEOInterviews.AIDogfish Head Craft Brewery: Sam and Mariah Calagione

N

Narrator0:00

Seeing your business idea come to life is exciting, but it's also incredibly complex, but Shopify can make it simple. They provide all the tools you need to launch from day one. If you're nervous about building a website, Shopify's templates and AI tools will get you up and running with no coding needed. If you hit a wall in the setup process, Shopify's built-in AI assistant, Sidekick, can help you build, troubleshoot, and keep on moving. And when customers arrive, boom. Shopify checkout means more people actually buy and can check out with just one click. With Shopify to handle setup and checkout, you have more time to focus on growing your business. That's why Shopify powers millions of businesses worldwide. From household names like Gym Shark and Mattel to businesses that are just getting started. All you need is the idea. Shopify handles the rest. Start your free trial at shopify.com/built. That's shopify.com/built. Shopify.com/built.

Whether you're starting a website from the ground up or thinking about a complete overhaul, Framer is a complete website platform that can help launch and keep on improving your site in one place. Thousands of businesses from early-stage startups to Fortune 500s are choosing to build their websites in Framer, where changes take minutes instead of days. Framer is the pro site builder for creators, teams, businesses, anyone that wants a professional site and cares enough to get every detail right. You can close the gap between AI-generated ideas and a ready-to-launch website with Framer's agents. Agents and humans work together to make your site work. Agents bring speed and scale while you bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built for 30% off. framer.com/built. Rules and restrictions may apply.

Every day, shareholders meet to discuss important matters about the companies you invest in. Now, Vanguard is making it easy to have your voice heard in those decisions. Alexa, take me to Vanguard Investor Choice. Got it. Texting you a link where you can set your proxy voting preference for your Vanguard index funds and be heard by the companies you invest in. Just say, 'Alexa, take me to Vanguard Investor Choice.' And make your voice heard. Vanguard Investors own shares of our index funds, which own shares of the companies they invest in. Available for Vanguard index funds that participate in investor choice. Vanguard Marketing Corporation, distributor.

They say that every day your business is late to AI, you fall 2 days behind. But how do you keep up when the competition is only moving faster? With NetSuite Next, NetSuite Next is the next huge leap in how business gets done. Because AI is built into everything you do, it automatically provides custom insights throughout your day while AI agents work alongside you to solve problems and handle routine work. And anytime you have a question about anything, ask just like you're having a conversation with a colleague. If I needed to manage HR, commerce, inventory, CRM, financials, I would use NetSuite Next. Whether your company earns millions or even hundreds of millions, it's time for NetSuite Next, where your business meets AI. For the first time ever, you can try NetSuite Next for free. If your revenues are at least in the seven figures, go to netsuite.ai/built. Built for every industry, ready for every boardroom. netsuite.ai/built.

S

Sam Calagione3:52

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 kind of muscled the grannies and aunts out of the way that had their cakes and pies in the competition and our Dogfish Head pumpkin ale won the food competition. 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. It didn't say it wasn't for beer.

G

Guy Raz4:28

That's true.

S

Sam Calagione4:29

Don't hate the player, hate the game.

G

Guy Raz4:38

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 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, saison, 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 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. 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'd 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.

S

Sam Calagione8:11

The kids had to work their way through school and so, you know, we'd be preparing the meals, people would be, you know, doing the farming, stoking the fires in the power plant. And so, you know, I think really kind of that impacted, influenced our decisions to be entrepreneurs, which is probably why that school is still such a big part of our lives.

G

Guy Raz8:32

Tell me how you guys met each other, because you're still together, and this is like 40 years later.

S

Sam Calagione8:39

We've been making out with each other since the mid 80s. Yeah, I might be getting 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 a work job together.

M

Mariah Calagione8:54

Yes, and I do remember us meeting in the dining hall while we worked in the kitchen together for our work job.

G

Guy Raz9:02

And how soon after you met did you start dating?

S

Sam Calagione9:06

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,

G

Guy Raz9:12

and you probably were not allowed in the girls dorms and the boys dorms, right? That was verboten.

S

Sam Calagione9:17

It was an intricate dance, guy. We had something called visiting hours where you had to essentially be a contortionist because the rules were 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. And so it was an awesome matrix of fun challenges for young people dating each other.

G

Guy Raz9:37

All right. So you guys are like, you know, high school couple, whatever that means really in high school, but Sam, you were uh... 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. 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?

S

Sam Calagione10:04

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 midsize things. So, I know the offenses included things like breaking into the hockey rink with a couple friends and playing hockey naked.

G

Guy Raz10:26

Just, but I mean, just pranks. These were just pranks you were doing.

S

Sam Calagione10:30

Yeah. You know, some of them...

G

Guy Raz10:32

because they were funny.

S

Sam Calagione10:34

Well, and just want 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 uh 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 love that school. I didn't really show it in a positive way, but in that era, I was pretty unwieldy.

G

Guy Raz11:14

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 were disappointed. What do you remember about that?

S

Sam Calagione11:31

Yeah. 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 F-150 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, jaw clenching. Doesn't know if he should say anything. I just 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 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. My dog died. It sounds like a country music song come to life, but it was a true story and obviously a very traumatizing time in my life.

G

Guy Raz12:54

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.

Yeah. Wow. All right. You're kicked out and Mariah, were you? He was your boyfriend, right? What did your parents think? Were they like I don't know, Mariah Sam seems like trouble because 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.

M

Mariah Calagione13:25

Yep. As far as you know, guy, I was studying every night and sort of 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 of 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.

G

Guy Raz13:45

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?

S

Sam Calagione14:01

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.

G

Guy Raz14:14

Um, while you weren't 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 a kind of a typical college student just pounding beers?

S

Sam Calagione14:35

More like that typical college student. I will say, you know, when I left Muhlenberg the next day, I moved to New York City as an English major. I wanted to go take courses at Columbia where, you know, Ginsberg 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 Columbia that was called Nacho Mama's Burritos, which is a pretty 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.

G

Guy Raz15:13

This is like in the early 90s when I mean Sam Adams was around, but most bars served probably Budweiser, Coors, Miller Light, etc.

S

Sam Calagione15:23

Yeah, it was really kind of the opening moments of the craft beer renaissance in America. So there were some first-generation craft breweries like you mentioned, Sierra Nevada, Anchor Liberty, we sold from your neck of the woods, and Sam, Brooklyn Lager, Harpoon, I remember. So yeah, so that place specialized in the very finite number of diverse beers you could get at that time. And I learned that I had not only a pretty good palate for appreciating them, but I had a passion for talking about how they paired with food and...

But what I do remember is being like a voracious reader. I did get my library card at the New York Public Library and I found books like The Joy of Homebrewing by Charlie Papazian. And I just went deep into rabbit holes. And when you read the story of these monks in Belgium, brewing with these local fruits and these Czech breweries, finding these hops, I was like, 'Holy, this is just as rich as a world of Fitzgerald short stories or Salinger short stories.'

G

Guy Raz16:23

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, 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?

S

Sam Calagione16:54

Well, I think it was about that same 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's dominated by these monolithic generic frankly in my view light lagers made by giant companies. This could be a really cool thing to rebel against.

G

Guy Raz17:25

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 start a business. Is that right?

S

Sam Calagione17:42

Yeah, I think so. Because, you know, my dad was really entrepreneurial and always kind of presented that. He always sort of romanticized that, not in a corny, over-the-top way, but just he respected that sort of American dream, land of opportunity to be an entrepreneur. So, that was in the 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'd left 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 homebrewing 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.

G

Guy Raz18:33

All right. So Sam, I remember this is like 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 a home kit to brew your own beer in your apartment.

S

Sam Calagione18:48

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 of Hops and you could buy these 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 all this moldy or just squishy 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 for me. I took that kit home and started boiling it in our little tiny apartment.

G

Guy Raz19:40

So 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.'

S

Sam Calagione20:00

Yeah. And it was kind of a hot mess. Like I didn't bother to read the instruction manual or anything and I bought all these used giant 32 oz glass bottles. And the other thing is it said you could either 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 tongs and put them down on the floor to cool a half an hour or whatever. I came back to pick it up and I was like, 'What the?' And they wouldn't come off the ground because it melted the carpet. It not only melted the carpet, but it affixed the carpet to the bottom of the bottles.

G

Guy Raz20:39

Wow.

S

Sam Calagione20:39

So, I remember getting an X-Acto 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 a built-in coaster. And that was a unique feature. Of course, when we moved out of the apartment, there were these polka dots all over the kitchen. Who paid for that damage to the landlord?

You know, we put another carpet over the circles in the carpet and just left.

G

Guy Raz21:06

All right. So 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?

S

Sam Calagione21:13

Yeah. Yeah. Yeah. You know, 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 carbonation is like game on.

G

Guy Raz21:29

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 room like, 'Dude, what did you do?' Or did they just laugh?

S

Sam Calagione21:42

They mostly laughed. Yeah. 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.

G

Guy Raz22:01

Wow.

S

Sam Calagione22:01

And Joe Lo Truglio, the short cop on Brooklyn Nine-Nine was one of our roommates.

G

Guy Raz22:08

They were your roommates.

S

Sam Calagione22:10

Yeah, they were all in a show called The State on MTV when we were...

G

Guy Raz22:12

Oh, yeah. That was a great show.

S

Sam Calagione22:14

Exactly. And so the most surreal night was that Mariah came up from Providence the night I served that first homebrew.

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 model or just side work. And they had me on the show, they had an episode called When Good Girls Fall for Bad Boys.

G

Guy Raz22:42

Wow. And what did you do on the Ricky Lake show?

S

Sam Calagione22:47

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.

G

Guy Raz22:59

That's amazing. Just a side gig you had as a model.

M

Mariah Calagione23:05

But they hired him for Ricky 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.

G

Guy Raz23:15

You just outed Ricky Lake, Mariah.

M

Mariah Calagione23:18

Oh, sorry, Ricky. Wow. Who knew? We just blew the lid off Ricky Lake.

S

Sam Calagione23:23

Oh, jeez. Oh no.

G

Guy Raz23:26

We love you, Ricky Lake.

All right. So, Ricky Lake, the cast of The State, and Mariah and you are all crammed into your apartment about to unveil this home brewed cherry English pale ale with carpeting as coasters attached to the bottles. And was it a big thing? Did you like say, 'And now I'm going to unveil.' I mean, was it kind of this magical moment that you were introducing to everybody?

S

Sam Calagione23:57

It kind of was because 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 ounce things myself, standing on the coffee table and saying, 'This is what I'm going to do with my life, guys. I'm gonna open a little brewery that makes beers like this.'

G

Guy Raz24:22

Wow. So, you've got everyone likes this beer. And was it did it have a sweetness to it or a sourness to it? I mean these were sweet cherries. Do you remember whether there was a sweetness to the beer?

S

Sam Calagione24:35

I remember the cherry being pretty pronounced and then the pits from the cherry gave it like a nice woody sort of toasty character.

G

Guy Raz24:43

What I wonder what Ricky Lake thought of the beer. Do you remember?

S

Sam Calagione24:46

I remember she liked it too. I don't think there was a single dissenting voice in that group of drinkers.

G

Guy Raz24:52

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, 'Hey, you know you're breaking the law, right?' Stick around. I'm Guy Raz, and you're listening to How I Built This.

N

Narrator25:16

We're spending a lot of time shopping online. By 2025, the global online retail market is expected to double in size. So, if you're an online seller, you need a powerful platform that can keep up with the trends. Wix is a leading e-commerce platform used by entrepreneurs, agencies, and brands around the world. Not only can you build a state-of-the-art online store with full dev customization capabilities, Wix e-commerce lets you sell everywhere while managing. This message is a paid partnership with Apple Card.

I've noticed that a lot of people we talk to on this show, founders, entrepreneurs, creatives, they spend a surprising amount of time thinking about systems, not because they love complexity, but because they're trying to reduce it. The best systems usually make life feel simpler, calmer, more manageable. Financial well-being works the same way because most people don't want to spend all day thinking about money. They just want to understand where things are going, feel in control, and remove some of the stress and guesswork from everyday life. That's part of what Apple Card is designed to do. You can apply for Apple Card right in the Wallet app on your iPhone in minutes. Once you're approved, you can use Apple Card right away with Apple Pay without any friction. And here's the fun part: you spend and then you earn unlimited daily cash back on every purchase every day, not a month later. That's it. It really is that straightforward. And you earn 3% daily cash back on anything you buy from the Apple Store and at select merchants when using Apple Card with Apple Pay. One more thing people really seem to like is being able to track spending right from their iPhone. You can see purchases, search transactions easily, and get a clearer picture of where your money's going over time. It just makes things feel a little more transparent and manageable. Easily pin down spending with Apple Card. Apply in the Wallet app on your iPhone today. Subject to credit approval. Some transactions may not be displayed in maps. Merchant offers may change at any time. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch. Terms and more at applecard.com.

Even if you want to take care of your mental health, it can be hard knowing where to start. And when you start worrying about the costs and logistics, you might talk yourself out of finding the help you need. But fortunately, there's RULA. RULA makes it easy to access affordable, quality mental health care with sessions costing an average of $15 with insurance. They accept over 120 insurance plans nationwide and actually show you your cost upfront, so you're not guessing or worrying about some surprise bill later. RULA focuses on quality care. They vet their providers and monitor outcomes, and 93% of patients report feeling better and making real progress. With RULA, you can find a therapist for your specific needs in as little as 5 minutes and even book an appointment as soon as the next day. So instead of overthinking it, you can actually take the first step. If you're ready to stop talking yourself out of finding care and making progress, then head to rula.com, that's rula.com, and take the first step.

Success is a journey, especially when it comes to your finances. One of the most common obstacles in our financial journey is dealing with high-interest debt. It can often leave people feeling trapped, but it doesn't have to. If you're dealing with high-interest debt, there is a way forward. A SoFi personal loan could consolidate all your high-interest debt into one low-interest monthly payment, helping you craft a road map to paying down your debt. It even comes with no fees required, getting you a financial win right away. Keep pushing on your journey to financial success. You could even get as soon as the same day funding. View your rate for a SoFi personal loan at sofi.com/guyraz. Loans originated by SoFi Bank NA. Member FDIC. Terms and conditions apply. NMLS696891. Fast funds terms apply at sofi.com/guyraz.

G

Guy Raz29:55

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. 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 Nacho Mama's whole dinner shift. So I literally got up and with a hangover walked to the biggest unit of the New York City library and started doing LexisNexis searches about starting to write a business plan.

So you thought right then and there, 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?

S

Sam Calagione30:47

Um, to some extent, but I would at that little shop of hops, I bought the book that I first read in the library called The Joy of Homebrewing. And Charlie Papazian wrote that book and it's considered the Bible. And Charlie did a great job in The Joy of Homebrewing of putting into layman's 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 was basically, 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. This has been happening for thousands of years. Trust the process and you'll make good beer. So, you're learning about beer, but at this point you want to make a business out of this, and I guess you decide to start out by opening a brew pub, right? Like a restaurant somewhere. But why go in that direction with your business instead of just making a brand that would bottle beer and sell it to stores or something like that?

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 Yakavic Calagione side for these crazy chicken cutlets. And so I grew up with food and wine being central to bringing people together. And that was the lens that I started doing the search. How can I blend my love of food with my newfound love of brewing?

Yeah. 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 brewer in America committed to brewing the majority of our beers outside the Reinheitsgebot.'

G

Guy Raz32:31

And the Reinheitsgebot is like foreign. It's a German purity law. You can only use like four ingredients. Right.

S

Sam Calagione32:36

Exactly. It basically says water, hops, barley, yeast. That's all you got to choose from.

G

Guy Raz32:41

And you were saying I am not going to adhere to that.

S

Sam Calagione32:45

Yeah. You know, and 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, Immort Ale made with maple syrup from my family's farm up in Massachusetts and 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 referencing modern beer styles.

G

Guy Raz33:18

Um, because right, I mean like Sam Adams for example prided itself on the Reinheitsgebot 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.

S

Sam Calagione33:34

Yeah. And rightfully so. I mean, the first folks out of the gates, the Jim Kochs and the Ken Grossman from Sierra, they were brewing these beautiful, fresh, local interpretations of modern European beer styles. And that was amazing. But Mariah and I, I knew we weren't going to have a big marketing budget even to 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 a 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 epiphany moment that led me to say I want to go on this journey that really is about culinary inspiration for beverage recipes. The restaurant business is like one of the riskiest enterprises you can get into. It is very labor intensive and overhead intensive and food spoils. Like it is the riskiest, craziest business to go into. 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 summer jobs. And so when I was raising that money, it was 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.

G

Guy Raz35:22

And these are friends and family, right? Because I think you raised about 200,000 bucks, right, to do this.

S

Sam Calagione35:27

Yep. Yep. It cost 220,000. Yeah. And I structured it as personal loans out of the gate. So it wasn't that initially 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.

G

Guy Raz35:43

Yeah. And I mean you clearly have both of you now have amazing beer palates, right? But there are people who have natural palates like you meet wine sommeliers who are 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 stress test it?

S

Sam Calagione36:11

Well, I mean certainly our friends getting free beer liked it, but that is not the stress test I was expecting.

G

Guy Raz36:18

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 Pumpkin Chunkin where a bunch of farmers and homespun engineers create these Rube Goldberg-esque machines that huck pumpkins in a field. And a sort of sideshow of that competition is the baking competition, right?

S

Sam Calagione36:45

I took my homebrew 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 Head pumpkin ale won the food competition.

G

Guy Raz36:57

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.

S

Sam Calagione37:09

Don't hate the player, hate the game.

G

Guy Raz37:12

It didn't say it wasn't for beer.

S

Sam Calagione37:13

That's true.

Yeah, I do remember there were a few judges and they were 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 got to let him in.

G

Guy Raz37:23

And you won. You won this competition. I mean, it wasn't like a massive national, it was a local little comp, but still that's kind of cool. You won.

S

Sam Calagione37:32

Yeah. It didn't lead to like an SBA loan or anything, but...

G

Guy Raz37:39

And what was in your pumpkin ale?

S

Sam Calagione37:42

Same as Dogfish Head pumpkin ale today. So it's fresh pumpkin meat, fresh crushed allspice, cinnamon, nutmeg, and then instead of fermenting it with regular sugar, I ferment it with organic brown sugar. We still use brown sugar in the pumpkin today.

G

Guy Raz37:57

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. 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?

M

Mariah Calagione38:25

No, I mean I loved the idea of opening the brew pub, particularly 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. 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.

G

Guy Raz38:50

Okay. And 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 hoping to be the first ones there. So at that point, do you start to look elsewhere, like at another city?

S

Sam Calagione39:12

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.

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 all delete all the Providence in this business plan and replace with Rehoboth Beach, Delaware.'

G

Guy Raz39:48

Yeah.

S

Sam Calagione39:49

And I also knew that beautiful coastal Delaware is pretty much 2 hours from DC, Baltimore, Philly, 3 and a half from Manhattan. So it would actually be an ideal hub to eventually distribute beer to major metro markets.

G

Guy Raz40:06

So you get down to Delaware and what's available there? Where in and this is Rehoboth Beach, Delaware.

S

Sam Calagione40:12

Yeah. Yeah. Mariah and I 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?

M

Mariah Calagione40:24

The part of town where businesses went to die.

S

Sam Calagione40:28

So, we like the sound of that. So, that's for us.

M

Mariah Calagione40:32

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 literally laughable now because it's only four blocks away.

G

Guy Raz40:42

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?

S

Sam Calagione40:52

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 put together in a creative way so that it wouldn't reek of geography if we ever distributed our beer coast to coast.

G

Guy Raz41:20

Right. So you didn't want to call it Delaware Brewing Company.

S

Sam Calagione41:23

Yeah.

G

Guy Raz41:25

Or like the First State Brewing or something like that.

S

Sam Calagione41:28

Exactly.

G

Guy Raz41:31

Or Delaware.

Classic, right? You could get that t-shirt on the boardwalk, guy.

S

Sam Calagione41:36

Exactly. All right. So, you find this location in Rehoboth Beach to open up. How many seats was it going to have?

I feel like it was like 120 and then plus the deck.

G

Guy Raz41:47

So, that's a big decent sized restaurant.

S

Sam Calagione41:50

Yeah, it was two stories. I mean, it had a lot of space.

Yeah. And we rented it from a woman, a wonderful woman, whose 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 Head 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 side and I take it off and there's a sign of another failed restaurant behind underneath.

G

Guy Raz42:35

So this is a really good omen, like one failed, two fail, and now here you go.

S

Sam Calagione42:42

It gets worse. It gets worse, guy, because then I'm like okay. And so I screw the Dogfish Head Brewings and Eats sign on and Mariah's taking 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 going to 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 state.'

G

Guy Raz43:23

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

S

Sam Calagione43:44

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 I was like, 'Hey, Mariah, what do I do when I get to Dover?' And she's like, 'Oh, go left on 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?'

G

Guy Raz44:03

This is the state capital building.

S

Sam Calagione44:04

Yeah, I guess that's what it would be. 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 they were really sweet. I mean, they were like, 'Well, son, you're going to have to write a bill.' And they opened 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. Yeah.

Yeah. Well, maybe that's you. Maybe that too. But they were super cool. Like they're helping me. They're...

All right, so write this up. Get a lawyer who can stand with you and massage the language. And literally within a month we were on the floor getting a bill that we wrote brought forward and then Governor Carper, who's now

G

Guy Raz44:56

the senator,

S

Sam Calagione44:57

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 do

G

Guy Raz45:11

to change the law.

S

Sam Calagione45:13

Yeah. So people were kind of rooting for us to get this

G

Guy Raz45:15

I'm sure. I mean what you couldn't have bought better publicity around that

S

Sam Calagione45:20

and then subsequently after that we became really friendly with those good folks in do through the years.

G

Guy Raz45:25

All right. So, you get this law passed. Brewing is legal in the state of Delaware.

S

Sam Calagione45:31

Yeah, that was an amazing moment. And I remember calling Mariah from a pay phone, 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.'

G

Guy Raz45:43

Yeah. June 23rd, 1995, you open the restaurant. This is it's now fully open, right? How was business that first summer?

S

Sam Calagione45:52

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. I mean, most people's palates at that time was like your standard Coors and Miller Light and maybe Sam Adams, which is a great beer, but was not as radical as what you guys were doing. Were there people who were like, 'Not for me.'

Yeah. I mean, especially once we opened, necessity is the mother of invention and the fact that we couldn't afford a full-scale commercial brewing system and had to start with tiny little pots and pans, making 12 gallons of beer in the corner of 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 raisetra, Belgian brown, 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 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 had more raisins, less raisins? And we kind of developed the recipes in concert with our original fans. And that's kind of how our brand grew.

And they actually paid us to do that, which was kind of helpful. And back then I would hand out file cards when we'd hand people beers and ask them, 'What do you think of these?' And 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 remember that.

G

Guy Raz47:44

Like I don't know if that's a good thing or a bad thing, but probably fair point. 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 dried fruits and sugars, 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, Miller Light. Did you have to educate people around that?

S

Sam Calagione48:14

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, beer is pretty much an affordable thing to splurge on. So that worked in our benefit. And yes, it was more expensive than 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 they saw it being made,

G

Guy Raz48:48

right? So from what I understand 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?

S

Sam Calagione49:11

Yeah. So, I had a mattress in the cellar of the pub. So, I would only go home to our house maybe 3 or 4 nights a week and then stay in the basement of the cellar. And we would shut at midnight or 1:00 and then I'd start brewing before the day would get hot. You'd want to start brewing by 8 in the morning or so. So, five or six days a week I would triple brew, 12 gallon batches. It worked fine. And 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.

G

Guy Raz49:46

What were you doing, Mariah? What was your real job?

M

Mariah Calagione49:48

I was working in local TV news in Salisbury, Maryland

G

Guy Raz49:52

on camera.

M

Mariah Calagione49:53

Um mostly off camera. I prefer that.

G

Guy Raz49:57

But you were doing that in the daytime and come in the restaurant at night?

M

Mariah Calagione50:00

Yeah, I would come in and bus tables or work at the front door, do some dishes, whatever needed to be done. And Sam, you were brewing the beer and doing payroll and doing the shifts and the schedules and stuff like that.

S

Sam Calagione50:12

Oh, he wasn't doing payroll.

M

Mariah Calagione50:14

They don't trust me with the math.

G

Guy Raz50:16

Let's be clear.

S

Sam Calagione50:17

Come on. No one trusts me with the math, guy. Come on. 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

G

Guy Raz50:31

Oh, you would do live music. 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 played back then were Jimmy Buffett cover bands. So we were like finding all these indie rock bands from across the country. So that was a big part of the brand building as well. And then trying to foster relationships with other entrepreneurs, knowing that in the winter the tourists were going to go away and trying to get other entrepreneurs to choose us as their preferred watering hole. Those were the kinds of work I was doing as well as brewing.

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.

S

Sam Calagione51:23

The restaurant actually did pretty darn well 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 Philly Inquirer to write about a beer made with chory, that would help our brand grow disproportionate to our tiny scale down in coastal Delaware,

G

Guy Raz51:58

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, DC.

S

Sam Calagione52:08

Yes. 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, and usually people would let us in their door if we said, '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.

G

Guy Raz52:37

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.

M

Mariah Calagione52:50

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 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, so I naively assumed that meant I know how to do the opposite of that and put out all this information and I 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

G

Guy Raz53:33

like accounting

M

Mariah Calagione53:34

accounting and HR and TTB or ATF tax bureau excise tax forms twice a month. But I learned a lot.

S

Sam Calagione53:43

And while this is happening, we also went head first into starting a family. So it was definitely an intense time for us as a couple and as entrepreneurs.

G

Guy Raz53:54

You know, it's remarkable to me when I meet people who met when they were teenagers or kids because that is so rare, right? Like your judgment as a kid or teenager is just so different from your judgment. And even our judgment as adults, you know, people's marriages don't last or whatever, but I mean part of it is luck that just you two guys happen to be compatible and liked each other, but I'm just curious Sam from your perspective because you married very well, right? You married somebody very smart and who was like the brains of the operation at Dogfish Head, right? In Mariah, did you see somebody who could be not just life partner but like a business partner?

S

Sam Calagione54:38

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, a giant corporation or some monolithic industry. And so, to use the Marvel universe, I'd say I was a lot like Cyclops where I just was like spraying creative energy in a million directions out of my brain and eyes, 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 also for us as a family.

G

Guy Raz55:27

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. So how exactly were you doing that? Were you marketing mostly to small bars, or were you also trying to get into some big stores or some of the big restaurant chains?

S

Sam Calagione55:50

So we knew as we were growing making these really exotic beers. It's not like the biggest chain Applebees or chain Costco was going to take a chance on a beer made with raisins or a beer made with apricots. So our goal at first was to find these,

G

Guy Raz56:08

you know, much like and I know you did a great story with Merge Records. And if you look at how 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 get in a van as a band, and you go across the country and you find this grassroots networks of other people who

S

Sam Calagione56:27

venue to venue. Yep.

G

Guy Raz56:28

Yeah. The other people that give a 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'd go to Pittsburgh or Hartford or wherever, and I'd try to do a beer dinner and talk to the local newspaper. And really, it was like this Sonic Youth model of growing a brewing company.

Yeah. I read a story about a beer event that you were at Sam in '97. So you were 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?

S

Sam Calagione57:21

Yeah, it was at the Brick Skellar which was a mecca of craft in DC. Yeah, you remember that, don't you?

G

Guy Raz57:26

Famous bar. Had like the most beers available under one roof. And

S

Sam Calagione57:31

so I'm there and they were 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 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, getting up on the stage and being like, as a homage to 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.' I was like, 'Okay. All right.'

G

Guy Raz58:20

But at that moment, did you feel kind of upset or were you confident that you were on to something?

S

Sam Calagione58:26

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? 11 people showed up this time.' 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?

M

Mariah Calagione58:54

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.'

G

Guy Raz59:05

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?

S

Sam Calagione59:13

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, our ingredients or our equipment.

And I'd add to that, 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 very skittish and wore ski goggles to stand behind the bottling line and push valve number seven down as his job because the machine didn't work. And literally, I think 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 some meaningful amount, but I do want a minority equity stake, and we're going to form a board of directors.' And we're like, 'Oh, okay. Let's do that.'

G

Guy Raz1:00:32

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 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.'

N

Narrator1:00:50

Which is true. 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 Roz and you're listening to How I Built This.

We're supported by Anthropic, the team behind Claude. When I'm prepping for an interview, there's always that moment where I'm trying to turn a pile of research into an actual conversation. A founder's timeline, early decisions, big inflection points, old interviews, company background, all of it matters, but the real work is figuring out what connects. And that's where Claude has been super helpful. It helps me work through the material, organize what I already know, and find the thread, the thing that turns research into better questions. Claude is the AI for minds that don't stop at good enough. It's the collaborator that actually understands your entire workflow and thinks with you. Whether you're debugging code at midnight or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. From research to strategy to the tasks that slow everything down, Claude helps you stay with the work and keep moving. For problems worth solving, get started with Claude at claude.ai/hib.

When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talked to on this show because the best ones obsess over things their customers will never see. Tiny details, invisible improvements, relentless iteration, and not because anyone's watching, but because it makes the product better. That's what the Mobil brand does. It engineers fuel the same way great founders engineer their products. Mobil Supreme Plus premium gas helps keep engines three times cleaner, which can mean better performance and improved gas mileage. It's for people who care about what's under the hood, even if they never see it. Three times cleaner compared to Mobil regular gas in port fuel injected engines. Actual results may vary. Visit mobilfuels.com for details.

G

Guy Raz1:03:27

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. 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 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 indigenous ingredients to make beer.' And in the beer world that gave us, we were always thinking beyond beer, like how can we recontextualize beer? And moments like that were impactful.

I should mention that Michael Jackson to be like Robert Parker to wine, right? Like he's that important.

S

Sam Calagione1:04:20

Yeah, that's great. Meanwhile, there's 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. These would become signature beers for you. What first just can you explain what is the 90-minute IPA?

Yeah, sure. So IPA is a many centuries old English beer style and basically it was

G

Guy Raz1:04:49

India pale ale right

S

Sam Calagione1:04:50

India pale ale and it was basically process, 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 one morning, I think it was '99, I was heating up water to brew and 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

G

Guy Raz1:05:45

Hold on, I said, because I 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.

S

Sam Calagione1:05:55

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 this chef talk about this and I literally 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 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 hand drill. And then I duct taped the bucket on some 2x4s to the vibrating football game and then filled the bucket with pelletized hops and just put a stepladder 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 one pellet hit the boiling beer for the whole 90 minutes of the boil, one stream of pellets. So, it's just like one giant hop addition.

G

Guy Raz1:07:11

This sounds like a very complicated experiment.

S

Sam Calagione1:07:15

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.

G

Guy Raz1:07:34

Because IPAs can be prohibitively, they can be 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.

S

Sam Calagione1:07:49

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 being in our at our house and Mariah like coming outside and being like, 'Hey, these guys own a website called Beer Advocate and 90 Minutes is the best, you know, reviewed the highest rated beer on their website and they want to do an interview.' And I remember being simultaneously stunned that 90 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 back then.

G

Guy Raz1:08:30

Yeah. There's something about beer, especially craft beer, that just attracts a certain cult following. And we know from this show that when you create a niche product that attracts a cult following, it eventually becomes a mass product.

S

Sam Calagione1:08:46

Well, like we also started as the anti-mass product, right? 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.

G

Guy Raz1:09:02

The shakeout meant that a lot of small brew pubs closed. They did not survive.

S

Sam Calagione1:09:07

Mhm. I mean, I think a lot of people got into it who weren't all about the beer. They were more like, 'I read about this microbrewery trend in the Wall Street Journal and I'm going to make a lot of money and'

G

Guy Raz1:09:18

it's like podcasts.

S

Sam Calagione1:09:19

Yeah, a lot like podcasts.

G

Guy Raz1:09:20

Yeah. But yeah, so from a branding perspective what you did, I don't think this was a cynical marketing move at all. It was really just a passion. You carved out your niche by 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 an ancient Egyptian or Middle Eastern brewing method because they were brewing beer 3,000 years ago.

S

Sam Calagione1:09:53

Yeah. And 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.

G

Guy Raz1:10:01

Yeah. 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 the night they buried King Midas.' Wow.

S

Sam Calagione1:10:16

And Michael Jackson, rest in peace, put us together with Dr. Pat and it formed this awesome relationship where we've reverse engineered these liquid time capsules from ancient China, ancient Italy, ancient Turkey, and that's been a big part of our journey.

G

Guy Raz1:10:35

Wow. I mean, amazing. And we should mention Michael Jackson. I think he passed away in 2007. But 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.

M

Mariah Calagione1:10:55

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. Well, like we would have never thought People magazine would be interested in our beer, but that's something that afforded us a new audience.

G

Guy Raz1:11:13

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 started to sell. People started to buy it.

S

Sam Calagione1:11:26

Yeah.

G

Guy Raz1:11:27

I think by 2004, I read Dogfish was doing like 7 million in revenue, $800,000 in earnings. So you turned it around by then. You guys were definitely doing pretty well by that point.

S

Sam Calagione1:11:39

I will say by that era, 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 that really helped us get our financial feet under us.

G

Guy Raz1:12:13

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 talked about how by that point you had quadrupled in size from 2004. So you were doing like 40 million revenue, but you still could only meet four fifths 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.

S

Sam Calagione1:12:46

Yeah. We called our sales team at the time the sales prevention team. 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.

G

Guy Raz1:13:18

Yeah. 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?

M

Mariah Calagione1:13:45

Well, I think we 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 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.

S

Sam Calagione1:14:04

We joke that 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 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 what trips we could bring Sammy and Greer on so that they could see 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 work-life balance, I think was something we had to learn along the way.

G

Guy Raz1:14:49

Yeah. No, I mean, there isn't a work-life balance because there's no demarcation between work and not work really. I mean, we go out to dinner at night where it's at an account. Like, we go to somewhere on the weekend, like pretty much everywhere sells beer, right? So we're traveling and there is no 'okay, at this moment, we're not going to talk about work anymore.' It just doesn't happen. It's not possible.

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's 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 Brew Master. Sam, you were 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, right? You want to go or you want me?

S

Sam Calagione1:15:49

No, you go. You're the face of that show.

G

Guy Raz1:15:50

Oh, thanks. You're right. Zero Point Zero, 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 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 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 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 when our fans talk about that, we're going to 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 said, 'Yep, that's not an indie craft brewery. 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.

S

Sam Calagione1:17:07

Yeah.

G

Guy Raz1:17:07

Yeah. He was like, 'Big Beer killed this show.' But 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 Anheuser-Busch and Coors, right?

S

Sam Calagione1:17:27

Yeah, there was a good amount of that going on.

G

Guy Raz1:17:32

Hey, nothing wrong with it. They're trying to make money, too. And if the beer's good and well branded, okay, more power to them. 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, 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 Koch and Ken Grossman and Kim Jordan.

Now you're talking about everyone's been on How I Built This, all.

S

Sam Calagione1:18:14

You got good taste, Guy. You got good taste. And so a bunch of us recognized 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 share. And that means you're less than like a 5% or 4% or even less.

M

Mariah Calagione1:18:48

Hey Sam, you said 3 million a couple times, but isn't it actually six?

S

Sam Calagione1:18:52

Yeah, I think it is.

M

Mariah Calagione1:18:53

Just fact checking you. Thank you for fact checking me, honey.

S

Sam Calagione1:18:58

But it's very European, right? Like obviously champagne, it 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, 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, you know, beauty's in the eye of the beer holder. And I guess it's up to the consumer to say I give a about that definition or I don't.

G

Guy Raz1:19:44

All right. I think at a certain point you were like within the top 10 craft brewers in the US probably by 2018. Is that about right? Sound about right?

S

Sam Calagione1:19:58

It does.

G

Guy Raz1:19:59

And May 9th, 2019 announcement comes out. You're being acquired, described as 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?

S

Sam Calagione1:20:30

So, I was on the board with Jim Koch at the Brewers Association for over a decade. And I would see Jim at his booth at the Great American Beer Fest, working his ass off serving the beer, or listen to him on a radio commercial talking about the Rainier Heights and the purity of the brewing. 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 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 companies and our values and saw that our values were very complementary, 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 the fastest growing category and the fastest growing part of Dogfish Head's business. And the values in that portfolio drove Mariah and I's decision to do the merger.

G

Guy Raz1:21:55

Well, let me ask you about this because this is important. A lot of people listening, 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, Cliff Bar, 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. And what we were also seeing as an independent craft brewery is that we looked around and we were one of the few independent midsize 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, and we're independent, and all of our peers are now not independent. Not all of them. I would say the majority, maybe 80%. 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.

S

Sam Calagione1:23:17

That was not part of the original business plan. And like honestly, if we pulled into our brewery like I did yesterday in Milton, Delaware and the big tanks that hold 10,000 cases of beer were just filled with 60 Minute, I would feel like we failed in our

G

Guy Raz1:23:34

Is that still your best seller, by the way? 60-minute IPA.

S

Sam Calagione1:23:36

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 from the smallest brewery in the country in Delaware, that's the most rewarding part of it.

G

Guy Raz1:24:01

All right. There was push back. Anybody who's seen Portlandia knows what that means, right? Anytime the band goes from playing the indie club to the stadium and 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 guys were a, you know, you got this punk rock aesthetic. You have a brand called Punkin Ale. It's a punk pumpkin on the thing. And there's an aesthetic, 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.'

S

Sam Calagione1:24:44

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

M

Mariah Calagione1:25:07

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 going to take more of the arrows from 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 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.

G

Guy Raz1:25:57

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?

S

Sam Calagione1:26:17

I would say no. And I mean, 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.

G

Guy Raz1:26:57

All right, so Sam, you answered my luck or skill question. Thank you for preempting it. Appreciate it.

S

Sam Calagione1:27:02

Can you tell we're avid listeners?

G

Guy Raz1:27:07

Mariah, what do you think? I mean, I have my take on your story because the fact that you met in the cafeteria when you were 15 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? What do you attribute the success of this business to?

M

Mariah Calagione1:27:23

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 happened. So I think the luck kind of came to us because we were looking for it. We didn't pass by opportunities that in hindsight were really amazing, lucky opportunities that we had.

S

Sam Calagione1:27:51

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 rebellious teenager not knowing where things would go. The biggest part of luck for me was meeting Mariah.

G

Guy Raz1:28:25

That's Sam and Mariah Calagione, founders of Dogfish Head Craft Brewery. Is there anything like totally off limits when it comes to flavoring beers? Like, I don't know, would you use like raw tuna or something?

S

Sam Calagione1:28:38

Well, we've used human saliva, Guy. You got to come back the next time we do our chicha beer where we chewed the corn. That was a good one.

G

Guy Raz1:28:46

I don't think I could drink human saliva beer. I just don't think I could do it.

S

Sam Calagione1:28:50

It's sold out.

G

Guy Raz1:28:51

Sold out. Wow. We boil it. We boil it.

S

Sam Calagione1:28:55

Spit happens.

G

Guy Raz1:28:57

Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is [email protected]. This episode was produced by Alex Chung with music composed by Rumtin Eraie. It was edited by Neva Grant with research help from Katherine Cipher. Our production staff also includes JC Howard, Casey Herman, Josh Lash, Liz Mezer, Carrie Thompson, Sam Pollson, Elaine Coats, John Isabella, Chris Msini, and Carla Estz. I'm Guy Roz and you've been listening to How I Built This.

Dogfish Head Craft Brewery: Sam and Mariah Calagione

About Samuel Calagione