The launch of Dogfish Head’s ready-to-drink canned cocktails into near national distribution marks the culmination of what brewery founder Sam Calagione described as “the single longest R&D project” of his career.
“Twenty years ago I wrote a plan saying let’s open a little craft distillery inside our brewpub with the same creative philosophy,” he explained during a recent socially distanced meetup in Boston. “Meaning, let’s come up with unique, culinary-inspired recipes to create our own ideas instead of following what’s already out there — in the same way that we did when we opened Dogfish Head.”
Two decades later, three ready-to-drink canned cocktails — Blueberry Shrub Vodka Soda, Strawberry & Honeyberry Vodka Lemonade, and Cherry Bergamot Whiskey Sour — began hitting retailers last week priced at $13.99 per single-flavor 12 oz. 4-pack. Each checks in at 7% ABV.
Calagione believes Dogfish Head’s canned cocktails have the potential to “be a top player nationally within the space.” In 2020, spirits-based ready-to-drink canned cocktails increased off-premise dollar sales 142%, to $332.7 million, according to NielsenIQ data shared by Bump Williams Consulting. The leader in the space is High Noon Sun Sips, which posted $87.3 million in off-premise sales last year.
Due to state laws varying on the distribution of spirits-based products, Dogfish Head’s cocktails will be available in 37 states, with the exception of 13 mostly control states.
“With our orders coming in significantly more than we forecasted, we’re really looking at a two-year runway to grow this scale-wise but also geography-wise,” Calagione said.
Calagione described those offerings finally getting to store shelves “a cathartic moment.” He added that the initial three offerings are just the beginning, as Dogfish Head has a two-decades-old playbook of cocktail innovations.
Tasting through the three drinks, Calagione highlighted various attributes, from the “slight blue behind the haze” of the Vodka Lemonade, coming from the honeyberry skins; to the berry establishing the body, sweetness and complexity of the vodka soda, which is balanced out by balsamic vinegar, which adds acidity and dries it out on the backend.
Calagione left the whiskey sour for last, which he believes could be “the sleeper of the portfolio,” as he envisions consumers drinking them on a beach during the summer months.
The line of canned cocktails provides Dogfish Head a unique space within the Boston Beer Company portfolio. Boston Beer did not have a nationally distributed, year-round spirits offering prior to merging with Dogfish Head in 2019. Calagione said he discussed the incremental opportunity of Dogfish’s distilling operation with Boston Beer founder Jim Koch and CEO Dave Burwick during merger talks.
“Because they’re made from scratch and are 7% ABV, they command the most dollars at retail per case of any Boston Beer product in our already high-end portfolio,” he added. “So watching our distributors and retailers get excited about not just the incrementality, but the up-ring that these offer, has made us really excited for this launch.”
Calagione said the goal behind each cocktail recipe was to ensure it had complexity but ended with enough dryness and acidity to keep consumers coming back for more.
“The sensory profile was designed to make them really, really refreshing and really, really sessionable, even at 7% ABV,” he said.
Dogfish Head’s craft distilling program had previously taken place at its seafood restaurant Chesapeake & Maine in Rehoboth Beach, Delaware. Nevertheless, Calagione said Dogfish has always played on the edges of beer, including beer-wine hybrid Raison D’Etre and beer-mead mashup Midas Touch.
“Essentially, Dogfish has always been a beer and beyond beer company since before there was a term of beyond beer,” he said.
Post-merger with Boston Beer, Dogfish Head invested $2 million in building capacity of its distilling program with an eye on taking the cocktails to a broader audience.
“It just happened to dovetail with a moment of canned cocktails coming into the spotlight,” Calagione said. “And I think that was even amplified by the challenges of COVID, where you could no longer go to your favorite indie bar that had a world class cocktail program. Our whole thing is, let’s make mixology quality cocktails with exotic quality ingredients but get them into a can.”