Off-Centered Advice

To put it bluntly, I have no use for management books. Some are filled with stale platitudes. Others are exercises in self-congratulation. And the very worst are both. But Sam Calagione's book, Brewing Up a Business, breaks that mold. What other businessman cites Miles Davis, Andy Warhol, and Ralph Waldo Emerson as influences?

You probably know that Calagione is the founder of the Dogfish Head Brewing Company. Having survived 10 years in the craft brewing industry, he has quite a story to tell. Actually, lots of stories, most of which are best told over pints. His light touch makes his business advice go down easily. Much like his beer.

Intentionally or not, his book drives home the point that craft brewing is not a fast track to riches, even for someone as gifted as Calagione. A born entrepreneur, he displayed a propensity for risk-taking from an early age. That got him booted out of prep school for "an accumulation of offenses." Fortunately, his father didn't ground him for life--or worse. And the expulsion did teach him a lesson: he had to channel his creative impulses.

Luck smiled on Calagione in other ways. He married his high-school sweetheart, Mariah, whom he describes as the only person who has higher expectations of him than he has for himself. She and her father forced him to pay attention to the management side of brewing. That is why Dogfish Head survived 1997, a deadly year for breweries.

Last but definitely not least, he has a knack for making beer. His first batch of homebrew--the result of an amusing comedy of errors--wowed the guests at a party. Energized by that success, Calagione found his calling. He decided to become a professional brewer.

But he soon discovered that the formula for craft brewing success was two percent inspiration and 98 percent perspiration. Strapped for cash, he cobbled together a 0.3-barrel system, which he claims was the world's smallest. A system that tiny forced him to spend much of his time brewing. To fend off burnout, he experimented with oddball recipes, which became Dogfish Head's famous "off-centered ales."

Calagione has spent countless hours promoting his beer. As he sees it, small breweries are like indie artists: both must resort to guerrilla marketing. He staked out niche markets with ales like Midas Touch and World Wide Stout. He educated consumers, who associate beer with mass-market American lager, by handing out samples and lugging his beer to festivals. And he publicized his brewery with "Lupulin Madness," a movie that poked fun at prohibitionists, and the lyrics of his beer-rap group, The Pain Relievaz.

Public relations isn't an exact science. Calagione once got the idea that rowing across Delaware Bay with a case of beer would help promote Dogfish Head. The voyage should have been a flop; he forgot to alert the media on the Jersey side, and never arranged with his distributor to have beer on hand when he arrived. But he wound up getting the attention of a men's clothier, which featured him in a magazine ad. A lucky break? Sure. But hard work has a way of bringing good fortune.

"Passion" has become a business cliche, but Calagione tells a story that brings the word back to life. On a hot summer's day, he delivered a truckload of beer to a distributor in Philadelphia. En route, he got into not just one but two accidents and, for good measure, locked his keys inside his truck. Despite all that, he got the beer to his destination. Moral of the story: you've got to be maniacal to make it in this business.

Although he's become an icon, Calagione admits to his share of mistakes: buying a cash-gobbling bottling line; not paying enough attention to the bottom line; and failing to confront problems inside his corporate family, a failing that ended a long-time friendship with his brewpub manager. He also admits that at first, he didn't understand the value of "thinking locally." But he quickly learned that other small brewers were allies, not competitors; and that it's good business to be a contributing member of one's community.

Although Calagione is not yet 40, he's thinking about the day he'll become "irrelevant," which means turning Dogfish Head over to his management team. But there's a catch. He says that the time to cash out won't come until he either runs out of ways to maximize his brewery's value or outgrows his appetite for taking risks. Don't bet on either happening soon.

Except for a few lapses into jargon, Brewing Up a Business tells a fascinating story. For homebrewers who dream of becoming beer barons, it's a cautionary tale. And for those who enjoy beer, it's an insider's story of what else, besides yeast, malt, and hops, goes into your pint glass.