For the first time in over a decade, Dogfish Head won’t experience double-digit production volume growth, founder Sam Calagione wrote to Brewbound.
In an email, Calagione explained why the company would only be up single digits in 2015: Dogfish Head’s refusal to discount product, zero new market entries and an extended search process for the company’s new vice president of sales were all reasons, Calagione said.
Dogfish filled that position with Todd Bollig in July; the company said it has now developed a plan for 2016 that will enable it to have “another record year.”
“Together our plan is a return to more robust growth with a significantly amplified engagement commitment with our distribution and retail partners,” Calagione wrote.
“We thought it would be helpful to have some external resources who have way broader experience in helping brands navigate competitive moments in their respective industries,” Calagione said at the time of the transaction.
As he looked back on his company’s performance in 2015, Calagione stressed strong profit margins and a commitment to selling beer at full price “95 percent of the time,” as leading indicators that the business is still healthy.
Indeed, Dogfish will post its 17th consecutive year of revenue and barrelage growth and, according to Calagione, the decision to avoid discounting has made Dogfish one of the most profitable U.S. craft brands for distributors to carry. Dogfish has the highest average case equivalent price ($52.60) amongst top 25 suppliers. Only Ballast Point, at $56.27 per CE, and Stone, at $51.32 per CE, rank in the same neighborhood, Calagione wrote.
“The remaining 22 breweries are all below $45,” he wrote. “Many of our high-end beers we released this year, including 120 Minute IPA, Fort, and Higher Math sell for over $130 per case. The majority of sales for these specialty beers occur in accounts that do not contribute to scan data. Internally we believe our average CE price pushes closer to $55 blended across portfolio-wide volume.”
Through November 29, Dogfish Head’s volume sales are up 11.3 percent in the grocery channel, according to market research firm IRI.
Flagship 90 Minute IPA is still the company’s highest velocity brand, trailed closely by 60 Minute IPA, 120 Minute IPA and Namaste, Calagione said. Namaste, a lower alcohol white beer brewed with orange flesh and lemongrass, was the company’s fastest-growing beer in 2015 — about 30 percent year-to-date, Calagione wrote.
It’s worth noting, however, that year-to-date sales of Dogfish Head 60 Minute IPA are down about 3 percent in the convenience channel, according to IRI.
Editor’s Note: An earlier version of this story indicated that Dogfish Head was “one of the most profitable craft brands in the entire country.” This has since been corrected to more accurately reflect that Dogfish is instead “one of the most profitable U.S. craft brands for distributors to carry.”