The case for the Dogfish, Boston Beer deal

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Hello everyone,

The Chase Center on the Riverfront had a Dogfish Head theme Monday night as founders Sam and Mariah Calagione offered insights on the decision in 2019 to merge with Boston Beer Co. in a $300 million deal.

The Milton company knows a thing or two about promotion. The thousand or so attendees at the Delaware State Chamber’s annual meeting were greeted with a Dogfish booth and projected images of the company’s beer and distillery logos on the walls of the darkened banquet hall.

Still, some diehard Dogfish fans have not yet forgiven the Calagiones for selling to the brewer of Samuel Adams and Angry Orchard cider.

In their keynote remarks, at the annual dinner of the Delaware State Chamber of Commerce Monday night, the Calagiones laid out the case for the sale at a podium flanked by a couple of cans of Dogfish brews.

The challenge facing Dogfish, according to Sam, involved the company being squeezed by hyperlocal breweries that sell within a small geographic area and mid-sized craft brewers being sold off to international giants like Anheuser-Busch Inbev and Heineken.

While sales of Dogfish Head remained strong in its Mid-Atlantic backyard, the brewer was losing traction in other parts of the county as the number of small breweries continued to grow and their patrons opted for local brews.

Since the 1980s, the number of breweries in the U.S. has grown from 600 to the current figure of 8,000.

The Calagiones made it clear that Dogfish Head still supports small brewers. Sam urged Chamber members to “be promiscuous” and fool around with Delaware’s many craft brew offerings.

The options involved cutting back distribution to the Mid-Atlantic and laying off perhaps 20 percent of the company’s nearly 400 employees or affiliating with a brewer with a similar vision and the heft needed in building a nationwide footprint.

Boston Beer fit the bill, the Calagiones said.

Sam described the integration of the companies as fun and intense. Mariah said Dogfish is now shooting for nationwide distribution by the end of the year.

The Milton brewer has a couple of hot sellers with national appeal that can benefit from Boston Beer’s reach – SeaQuench, a sour and Slightly Mighty, a low-calorie brew that takes aim at a fast-growing “fitness beer” market dominated by Michelob Light.

There’s plenty of room for growth. Dogfish Head and Boston Beer have a combined market share of 2 percent.

The Calagiones say the affiliation and added resources from Boston Beer will allow Dogfish to continue to grow in Delaware.

Mariah says plans are in the work for further development in Rehoboth Beach, already the site of a new brewpub and the Chesapeake and Maine restaurant. Dogfish also has an inn in Lewes. If Sam is in town, he often stops for informal sessions that focus on beer.

The couple has also set up a foundation funded with Boston Beer stock that will be used to fund charitable endeavors in Delaware and adjacent areas.

Have a great Tuesday and check out today’s stories.

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