Sam Calagione and Dogfish Head are investing in a growing craft spirits segment.
Calagione, who described the recent influx of small-batch spirit producers as a “revolution,” believes Dogfish, the company he founded in 1995, has an opportunity to once again extend the brand outside of the beer category.
The company is making a seven-figure investment in the growing spirits segment and will take its small-scale distilling operation — which currently lives in a corner of the company’s coastal Delaware brewpub — and expand the venture into full-scale production, with broadened distribution outside of the company’s home market.
“We are excited to see the niche of craft distilling grow at a similar but smaller-based trajectory to craft beer,” Calagione told Brewbound. “There are some great similarities between the craft beer marketplace and the spirits marketplace.”
The new distillery will be located within Dogfish Head’s current brewery headquarters in Milton, Del., Calagione said.
Dogfish, which began making a selection of rums, vodkas and gins in 2002, was the just the second craft brewery in the country, after Anchor Brewing, to distill its own line spirits. Over the years, craft brewers like San Diego’s Ballast Point and Michigan’s New Holland Brewing, among others, have also started distilling.
“We are a company that has chosen to create off-centered products in a number of different industries,” said Calagione. “I always saw an opportunity to put our off-centered thumbprint on the spirits world.”
Dogfish is familiar with brand extensions beyond the beer category. The company already markets its own line of food products, owns and operates 16-room hotel, collaborates with well-known musical acts like the Grateful Dead, and also sells a variety of Dogfish-branded merchandise.
But the expanded foray into small-batch distilling is more than just a creative attempt to extend the Dogfish brand into yet another industry. For Dogfish, it represents an opportunity to capture a small slice of a U.S. spirits market that surpassed more than $66 billion in retail sales last year.
The company has already purchased a twin 500-gallon copper pot still and a 26-foot column still from Louisville’s Vendome Copper & Brass Works and hired an award-winning head distiller, Graham Hamblett, who joined the company in January. Dogfish is also looking to hire a “seasoned spirits veteran,” that is a “cultural fit” to lead sales for the new venture.
As for distributors, Calagione said Dogfish is committed to staying with its current Delaware wholesaler, United, and will begin evaluating potential partners in New York City, Maryland, Virginia and Washington D.C.
The company plans to launch in at least two of those markets, with refreshed packaging, by next March.