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| of the microbrew class Sussex brewery one of the fastest growing in the U.S. By JANE BROOKS LEWES -- While the microbrew fad appears to be losing some of its fizz nationally, Delaware's Dogfish Head Craft Brewery is bubbling over. Expanded distribution to nine states in nine months has put the Lewes-based business on the Association of Brewers' list of the 20 fastest-growing breweries in the nation and earned founder Sam Calagione the title of Delaware young entrepreneur of the year. In just three years he has gone from mixing up 12-gallon batches in old cut-off kegs at Delaware's first brew pub -- the Dogfish Head Brewing and Eats in Rehoboth Beach -- to producing 1,600 cases a week at the state's newest 30-barrel brew house about five miles up the road. It was his leadership in establishing both businesses that won Calagione recognition from the U.S. Small Business Administration in its search for entrepreneurs, under age 30, who "serve as a majority owner and operate a small business with a three-year track record." It's not that he is out to make big bucks in a hurry, Calagione, 28, is quick to emphasize. "We'd rather take time to experiment and have fun making beers that do not appeal to the mass market," he said. And apparently he is hitting the mark, according to a review of Dogfish Head beers in the June issue of Wine Enthusiast: "Hardly chugalug brews to be knocked back as you're watching a ball game, these are beers with nuance and style, in many ways more akin to fine wine than the average beer." The company currently bottles three distinctive brews: Immort Ale -- brewed with such nontraditional ingredients as juniper berries, maple syrup, brown sugar and vanilla. First fermented with an ale yeast and then a champagne yeast that increases its alcohol volume to 11 percent, each batch is aged on oak chips for a couple of months. Shelter Pale Ale -- the brewery's flagship product, in which Delaware-grown barley is a primary ingredient. Chicory Stout, which draws its flavor from roasted chicory root and an organic Mexican coffee roasted at Oby Lee Coffee Roastery in Rehoboth Beach. Calagione opened the microbrewery at Nassau Commons last summer with an eclectic collection of used equipment: fermenters that once held yogurt at a Dannon factory; a 1969 bottle-filling machine from a soda bottling plant; a 1950s-era Pabst kegging system; and an assortment of equipment from a local cannery and dairy that were going out of business. "We could have bought a shiny new system from one of a dozen brewery companies. They would have built the system exactly as we wanted it, set it up in our warehouse ... even taught us how to make beer," Calagione said. "By building the system ourselves, we saved a lot of money and therefore still owe a lot less than other breweries," he said. "That also means we don't have stockholders telling us we have to sell, sell, sell. We can afford to take some risks and make beer that's a little different." Calagione's entrepreneurial skills also extend to marketing. When he decided to start shipping his Dogfish Head brews beyond Delaware, he made the first delivery himself -- by rowboat -- from Lewes to Cape May. N.J. It was "a shameless publicity stunt," he acknowledged. But it worked, drawing national media attention. Their capacity has grown from 400 barrels to 8,000 barrels annually, but Calagione and his wife Mariah, who is his business partner and marketing manager, have no desire to extend their business beyond the mid-Atlantic states. "Beer is a perishable product," Sam Calagione said. "We have no intention of going national, we just want to be more prevalent in our market area from Massachusetts to Virginia." An explosion of small-scale breweries in the early 1990s has been followed by a flurry of buy-outs, close-outs and consolidations. Newark-based Blue Hen Beer Co. was acquired by Independence Brew Co. of Philadelphia earlier this year, for instance, and Rockford Brewing Co. in Wilmington went out of business. The microbrew business nationally grew by a whopping 50 percent a year between 1994 and 1996. That rate has slowed to about 5 percent, according to Scott Voss, director of the Institute for Brewing Studies in Boulder, Colo. "There were too many beers out there competing for shelf space," Voss said. The microbrew industry, he said, is "still clipping along. There are just not as many players." The national trend is toward consolidation, some brewers being bought out "and like any business, some just cannot keep up and dropped out," he said. The key to making it in the specialty brew business is "cultivating the grass roots consumer," Voss said, "and educating the public to appreciate classic styles and alternatives to the mass-produced beers." It takes a serious brewer, someone with a passion for the process rather than purely a profit motive, to succeed for the long haul, suggested Calagione. He brought in Jason Kennedy, formerly of Wild Goose brewery in Maryland, as head brewer. Partner John Rishko continues to manage the brew pub and restaurant in Rehoboth Beach. Together, the businesses employ between 25 and 30. Dogfish Head also is becoming an important player in the local economy, Calagione said, buying barley from local farmers, turning leftover mash back as cattle feed, contracting with a local coffee roastery for ingredients and a local blacksmith to craft draft handles for its kegs. The Dogfish Head brew house is adjacent to Nassau Vineyards and Winery and engages in joint tours and promotions of Delaware's emerging beer and wine industry. The brewers will continue to experiment with seasonal brews, Calagione said. Plans also include a second brew pub.
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