Earlier this month, Dogfish Head announced that the popular Indian Brown Ale would be going year-round in five new states — California, Arizona, Washington, Oregon and Colorado — marking the first time since the company pulled back distribution in 2011 that a year-round offering was released to new markets.
Making that possible is the addition of 10 new 600-barrel fermentation tanks that started arriving this week. The tanks are part of a much larger expansion which includes a new warehouse, bottling line, malt storage facility, brewhouse and is expected to be complete in 2014.
“We have given ourselves an 18-month window for expansion,” said Adam Lambert, VP of Sales. “We are being very methodical and stretching it over a period of time.”
In the meantime, Dogfish is progressing on its goal of shipping 171,000 barrels this year, up from 143,613 in 2011. Lambert tells Brewbound.com that through the first six months of the year the company is slightly ahead of pace on its production goals – up 33 percent YTD on barrels shipped.
So what’s selling? Lambert said 60 Minute IPA currently makes up 47 percent of Dogfish Head’s overall business and is up 27 percent over last year. Another top performing year-round, 90 Minute IPA, is up 43 percent.
Still, Lambert admits the company is staying modest about it’s goals.
“I’m sure we could sell more beer but it’s about being diligent and staying true to our business plan,” he said.
Sure, Lambert expects 60 Minute IPA and 90 Minute IPA to sell well, but what he didn’t expect was the success offerings like Burton Baton and Noble Rot.
“Noble Rot was phenomenal for us,” he said. “It had a lot of excitement but for a year-one brand it sold incredibly fast.”
Noble Rot’s success was on a small base of just 360 barrels, however. Burton Baton, which recently moved into the year-round portfolio, is up 55 percent a slightly larger production base.
So where is the beer selling best? Lambert said most of it is actually staying close to home.
“The markets within 100 miles touching the brewery are still selling 52 percent of our beer,” he said. “The model of selling more beer, closer to home has been great for us.”
Lambert said that New York, New Jersey, Pennsylvania and Florida are some of the top performing states in the company’s distribution network. Florida is up 50 percent in depletions, while New Jersey and New York are up 48 percent and 45 percent respectively.
But it’s Pennsylvania, up 37 percent, that is the company’s number one market.
“It’s a craft savvy state,” said Lambert. “We send most of our beer there.”
Still, Lambert knows that keeping up with the torrid growth of the entire craft category will be difficult and it’s why he is incredibly focused on maintaining the company’s recipe for long-term success.
“We have built our confidence back up with our retail partners across the U.S.,” he said. “We are still on an allocation system, especially with our core portfolio but we know that a slow, methodical approach to sales and expansion is a more sustainable approach to brand building.”