Dogfish Head grows sales in existing footprint in 2012

 

Dogfish Head released its brewing production numbers and financial info for year-end 2012, and the results are what one would expect for such a brand in a booming industry such as craft beer.

Here are some of the standout growth figures: The total family of Dogfish Head brands increased 31 percent in volume, 33 percent in dollar sales on a minimal increase of 4 percent in distribution. Dogfish Head’s barrel (bbl) shipments to wholesale grew by 20 percent to an annual shipped number of 172,617 bbls. This surpassed the company’s forecasted goal by 2,505 bbls. Dogfish Head’s total CE wholesale depletions grew at an annual pace of 22 percent. Dogfish Head delivers more revenue per CE at standard profit margins than almost any brewery in the world.

Within that, seven core beers accounted for 82 percent of total volume, growing at a 20 percent pace. The fastest growers among the core brands were Burton Baton at 80 percent and 90 Minute IPA at 31 percent.

Five seasonal beers accounted for 11 percent of total volume, growing at a 38-percent pace. The Festina Peche was the fastest grower at 51 percent. The remaining 7 percent of total volume was comprised of 20 occasional beers, which grew at a 45 percent pace. The company’s 120 Minute brands was the fastest grower here at 82 percent.

The brewery still sells 51 percent of its total volume within the surrounding states of Delaware. Those home markets grew at an annual pace of 20 percent.  The second largest growth (30 percent) came from what they’ve defined as multi-unit focused states, or markets where wholesalers get at least 40 percent of their total house volume from on and off premise chains.

“Overall out of the 27 states we do business in, 10 of them account for 70 percent of our total business. Meaning we have incredible upside with the other 17 states,” the company release stated.

Sam Calagoine, owner and president, noted that Dogfish Head has the second-highest five-year growth average of any top 50 brewery in the country but that the company is “most proud of the work we have done together with you in the last couple years to prioritize strong growth over fast growth.”

In his year-end message, Calagoine said that Dogfish Head is no longer the fastest-growing brewery in the country and he doubts that it ever will be again.

“For the integrity and distinction of our off-centered brand, our No. 1 priority is offering beer-lovers the most diverse, distinct and exciting range of beers out there,” Calagoine said. “Our blended prices are higher than the average craft brewery but our beers are unique enough and the storytelling around what makes our beers unique, and cost a bit more, is well-told through our marketing and packaging so consumers understand our higher-priced beer as still a great value.”

The brewery’s No. 1 packaged brand distribution base increased by 4,100 points of distribution over a 12-month period. Its turns increased in the same period of time by well over half a case per point of distribution. Thus the accounts we were placed in were the right accounts, and the company experienced no dilution from added shelf placements. Dogfish Head’s number one draft brand distribution base increased by 580 points of distribution over a 12-month period.

In terms of the year to come, Calagoine stated that they are putting almost 400,000 bbls of new capacity in the ground and are committed to high teen to early 20 percent growth for years to come.

Dogfish Head will not be entering any new states in 2013, but does have a variety of beer announcements, from the new core beer to a collaborative beer with Sierra Nevada called Rhizing Bines. Also, the company’s family of wholesalers has grown with the addition of nine new members in one of its long-time existing footprints. Vice president of sales Adam Lambert said those wholesale additions necessitate several new personnel moves.

“In 2013 we will add three new positions [regional managers] bringing our sales force to a total of 12 outstanding Dogfish Head Regional Managers covering all 27 states,” he said. “This is just a small look at what we are going to accomplish in the first few months of the year. Throw in our 18-month, $52 million expansion project and needless to say we have plenty to keep us busy.”

Other year-end numbers:

• Dogfish Head sold 3,900,426 four packs in 2012 at an average ABV of 9.1 percent.
• The company’s IPA portfolio consisted of eight different beers and grew at a pace of 25 percent. This portfolio contributed to 76 percent of our total annual volume.
• Two new beer-hybrids, one a cider-beer hybrid and one a wine-beer hybrid, accounted for well over 14,000 CEs. The brewery’s newest seasonal and first entrance into the Gluten Free Category was released four times in 2012 and reached over 37,000 CEs sold.
• Dogfish Head off-premise accounted for 66 percent of total business and grew at a solid pace of 20 percent. On-premise accounted for 34 percent of total business and grew at a pace of 25 percent.
• The brewery’s average price per case was the second highest out of the top 11 craft brands as defined by the Brewers Association. It was $12.87 per case higher than the next craft brand.
• Within the grocery channel, 60 Minute IPA increased 25 percent, 90 Minute IPA increased 40 percent, seasonals increased 69 percent, Raison D’Etre increased 27 percent and Indian Brown Ale increased 17 percent.