Get All Access for $5/mo

Why the Founder of Dogfish Head Brewery Scaled Back His No. 1 Product When Dogfish Head created a hit beer, it did what seemed crazy at the time: It turned down sales.

By Jason Feifer

This story appears in the July 2017 issue of Entrepreneur. Subscribe »

Dogfish Head

Sam Calagione is used to getting love in his hometown of Milton, Del. He created Dogfish Head Craft Brewery, one of America's hottest breweries, and is a major employer in town. People wave and say hi. Out-of-towners ask to take selfies with him. So it came as a surprise when a liquor store owner ran over with tears in her eyes.

Related: The Perfect Product is a Myth. Here's How to Scale the Almost-Perfect Product.

"I have customers walking into my store trying to buy your 60 Minute IPA and then yelling at me for not having it stocked," she said. "Then they're leaving without buying anything. I'm a local entrepreneur, you're a local entrepreneur -- can't you help me?"

Calagione had heard this before. 60 Minute IPA was his most popular beer. It was the sort of hit craft brewers would kill for. And yet he tamped down on production. He turned down sales. And he did it for years. Many entrepreneurs would consider this unthinkable. But Calagione was thinking ahead: Rather than push one giant hit, he believed his company would be better off in the long term by pushing a diverse range of smaller products. Now, 14 years after that hit beer debuted, he can evaluate whether it paid off.

The story begins in 2001, when Dogfish created a beer called 90 Minute IPA. It's powerful -- at 9 percent alcohol by volume, almost twice as boozy as a Budweiser. "Our distributor was like, "This is great, but it's strong for the average drinker,' so we said, let's do a more approachable, 6 percent version," Calagione says. That became known as the 60 Minute IPA, which he released in 2003.

Related: Should Your Product Be Perfect or Scalable? Can It Be Both?

This new beer took off. By 2006, it could have constituted 70 to 80 percent of all Dogfish sales. Calagione was excited, but also worried. He wanted Dogfish to be thought of as an innovator. But if the brewery became known for one product, that's all every store and bar would carry, and nobody would know about its other beers. Then if people's tastes changed, and drinkers lost interest in IPAs, they'd think of Dogfish as old news.

So in 2005, Calagione made the decision: This hit beer would never pass 50 percent of all Dogfish sales.

Retailers and distributors immediately complained. The Dogfish team worried about straining relationships, so they tried to turn the restriction into a positive. "It gave us a pretty unique soapbox to stand on in a crowded marketplace. We can say, "We want to stand for something different,'" Calagione says.

When Amtrak asked to carry the beer, Calagione persuaded the train service to offer only his 90 Minute IPA. (Amtrak is now that beer's largest buyer.) Dogfish trained its sales staff to act as a "beer education force," showing retailers its new beers and explaining that the limited supply meant everything was always fresh. Calagione and his staff listened sympathetically to unhappy retailers and found other ways to satisfy them. When that liquor store owner approached him in his hometown, for example, he offered a few free hats for customers and more of his other beers. "I'm not saying your business isn't important to us," he told her, "but we believe in this business model. Please bear with us."

Related: How to Launch a Product That Sells

Today, Calagione has a lot to show for his restraint. Dogfish is the 14th-largest craft brewer in the U.S. by volume, and people travel from across the country to visit its brewery and nearby Dogfish-themed hotel. And beer-drinking trends are moving in his direction. A recent Nielsen study found that the younger a (legal-age) drinker is, the more likely they are to want new and different beers. Only 44 percent of Gen Xers want that, for example, but the number jumps to 51 percent for 29- to 36-year-olds, and to 61 percent for 21- to 28-year-olds.

Dogfish's most popular beers are also looking different. 60 Minute IPA is still on top, with 43 percent of Dogfish's sales. But three of its top five beers are new creations. "One or two of them could overtake 60 Minute in the next five to ten years," Calagione says. And he'd be fine with that.

Jason Feifer

Entrepreneur Staff

Editor in Chief

Jason Feifer is the editor in chief of Entrepreneur magazine and host of the podcast Problem Solvers. Outside of Entrepreneur, he is the author of the book Build For Tomorrow, which helps readers find new opportunities in times of change, and co-hosts the podcast Help Wanted, where he helps solve listeners' work problems. He also writes a newsletter called One Thing Better, which each week gives you one better way to build a career or company you love.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick


ChatGPT is Becoming More Human-Like. Here's How The Tool is Getting Smarter at Replicating Your Voice, Brand and Personality.

AI can be instrumental in building your brand and boosting awareness, but the right approach is critical. A custom GPT delivers tailored collateral based on your ethos, personality and unique positioning factors.

Business News

You Can Now Apply to Renew Your U.S. Passport Online — But There's a Catch

The U.S. State Department officially launched the beta program this week.

Business News

Is the AI Industry Consolidating? Hugging Face CEO Says More AI Entrepreneurs Are Looking to Be Acquired

Clément Delangue, the CEO of Hugging Face, a $4.5 billion startup, says he gets at least 10 acquisition requests a week and it's "increased quite a lot."

Growing a Business

He Immigrated to the U.S. and Got a Job at McDonald's — Then His Aversion to Being 'Too Comfortable' Led to a Fast-Growing Company That's Hard to Miss

Voyo Popovic launched his moving and storage company in 2018 — and he's been innovating in the industry ever since.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Apple Reportedly Isn't Paying OpenAI to Use ChatGPT in iPhones

The next big iPhone update brings ChatGPT directly to Apple devices.