The team at Flying Dog Brewery doesn’t have to look any farther than the busiest passenger rail line in the United States when assessing future opportunity for their Frederick, Maryland-based craft brewery. “We call it our Amtrak strategy,” says CEO and general partner Jim Caruso, explaining the company’s potential to target the millions of beer drinkers who reside in markets served by Amtrak’s Northeast Corridor route, which runs from Washington, D.C. to Boston. “The Mid-Atlantic region is our big focus,” Caruso says, pointing to the core markets of Maryland, Washington, and northern Virginia. “Instead of being a mile wide and an inch deep, we’re an inch wide and a mile deep, and getting deeper.”
With distribution in 40 states and 24 countries, Flying Dog is now ranked 28th among craft brewers, according to the Brewers Association. While growth has been strong in much of the last decade—the brand has quadrupled its volume in the last ten years, according to Caruso—volume last year slipped slightly to 104,000 31-gallon barrels from 106,000 barrels in 2016, a not-uncommon trend among established craft brewers.
Flying Dog employs about 100 workers and has partnerships with 75 beer distributors, including Mid-Atlantic powerhouse Reyes Beverage Group. Overall, off- and on-premise sales are split 80% to 20%, says Caruso, but in the company’s core markets, sales in bars and restaurants are significant and the split is 65% to 35%. The brewery considers both independent and chain off-premise accounts vital to its success, with Maryland skewing more toward independents and Virginia toward chains. But Caruso notes “high velocity” in chains of late due to Flying Dog’s long-developed reputation, and he sees particular opportunity for growth in convenience stores.
While many craft brewers have unique tales of how they got their start, Flying Dog’s history is particularly colorful. George Stranahan—an astrophysicist, rancher, philanthropist, and heir to Champion Spark Plug Co.—founded the company as a brewpub in Aspen, Colorado in 1990. Four years later, he partnered with his friend Richard McIntyre to open a full production brewery in Denver. Caruso—who joined Flying Dog in 1994—recalls the learning curve of the early years. “We put together used dairy tanks and various pieces of equipment,” he says. “We sold beer out of the trunks of our cars. It was very much a learn-as-you-go process.”
In an effort to expand distribution eastward, the company purchased the Frederick Brewing Co. in Frederick, Maryland in 2006. Two years later, the Denver brewery closed and all production was moved to the east coast. “We’re the only craft brewer that has relocated across the country,” Caruso notes. Today, Flying Dog remains privately held by Stranahan, McIntyre’s wife, Lydia, and Caruso. Stranahan and Flying Dog also had an interest in Stranahan’s Colorado whiskey, which was founded in 2004 and sold to Proximo Spirits in 2011.
Flying Dog produces an array of year-round, seasonal, and limited-release beers. Since 2009, Raging Bitch Belgian IPA has been the top-selling brew. For the last four years, F.X. Matt Brewing Co. in Utica, New York has partnered with Flying Dog to produce some of its beer. Snake Dog IPA is the company’s No.-2 beer—and it’s also the fastest growing, according to Caruso. Under the brewery’s “Blenders” program, meanwhile, visitors to Flying Dog’s tasting room can sample a variety of more experimental beers. The Blenders series features offerings that blend two established Flying Dog brews, such as True Blood Blood Orange IPA, a mix of The Truth Imperial IPA and Bloodline Blood Orange IPA. Flying Dog brews typically retail between $10 and $15 a 6-pack of 12-ounce bottles.
Matt Brophy joined Flying Dog as head brewer in 2003 and today serves as COO, overseeing brewing, purchasing, quality control, packaging, and warehousing. Brophy says that while some beers are the result of the company’s research and development team, individual team members create other brews. “It can be exciting for a new brewer to pitch a new beer, see it being brewed and packaged on a wide scale, and then share it with friends,” Brophy says.
Artist Ralph Steadman has created original art for Flying Dog’s labels since 1995. “We’re very fortunate to be working with Ralph,” says CMO Ben Savage. “We view the product that we put into the bottle as a work of art, and we’re lucky to be able to represent each of those with actual works of art.” Savage says that while the brewery conveys to Steadman “a sense of the beer style and the approach” they envision, the artist ultimately has full creative control. “We always end up loving what we get,” Savage says.
First Amendment Brewery
Despite its steady growth, Flying Dog has been embroiled in its share of controversy over the years, largely due to some irreverent brand name choices, including that of its flagship, Raging Bitch IPA. Michigan and Colorado have attempted to disallow sales of those brews, but Flying Dog has prevailed. “We stand for creativity and ingenuity,” Caruso says. “I’ve spent my entire life advocating for freedom of speech. We’ve sued two states and won. Freedom of speech is the foundation for intellectual, economic, and political freedom. We defend it vigorously. We are the First Amendment brewery.” Earlier this year, Flying Dog terminated its membership in the Brewers Association following the group’s recent moves to discourage the use of sexually explicit, lewd, and demeaning brand names and graphics.
Perhaps not surprisingly, the company’s advertising strategy eschews traditional media. “We have a long-standing tradition of not using conventional media,” Savage says. “There’s no TV, no radio, no print. It’s mainly grassroots—a lot of word of mouth and social media.” Both Savage and Caruso emphasize that Flying Dog works hard to be “hyper-connected” to community members. “In addition to our sales reps out on the streets, we have valuable partnerships with others in the region, whether they’re non-profit organizations or other small businesses and entrepreneurs creating great products,” Savage notes. He points to Flying Dog’s support of the Chesapeake Bay-area non-profit Oyster Recovery Partnership. “We want our brand to be a part of the local fabric, and we feel that is the most powerful element of our marketing strategy.”
Flying Dog welcomes community members to its brewery for a variety of events, including concerts and yoga classes. Consumer and trade visitors to the brewery can also take classes as part of the company’s Flying Dog University. Savage says the program isn’t just about Flying Dog and its brews, but about craft beer in general. A recent session, for example, featured a pairing of craft brews and charcuterie. The brewery also offers a Cicerone education class.
Flying Dog opened its on-site tasting room four years ago. “Our tasting room is the hospitality extension of our business, and is critical to turning more people onto Flying Dog,” says Savage. Although the volumes are relatively small—the brewery sells only about 300 barrels of beer a year via its tasting room—Caruso sees the venue as the single best way to market the brewery. “People sample our beer and then go to the store to buy it,” he says. “It’s a virtuous cycle.” Caruso takes issue with craft breweries that sell the large majority of their volume via tasting rooms. “They should be licensed as brewpubs or something else,” he says. “If you open a brewery and sell all of your beer directly to the public, that’s not a brewery.”
Caruso has seen a lot of change in the industry since Flying Dog’s early days. A few decades ago, distribution of craft beer brands was limited, and consumers were not nearly as educated as they are now about various beer styles. “Consumers today are overwhelmed with beer choices,” he says, noting that many are now reverting back to brands and breweries they trust—including Flying Dog. He also says that he’s not concerned with the fierce competition of the craft beer category. “Competition is a problem for breweries that don’t have a distinctive brand,” Caruso explains. “At Flying Dog, we’re always looking for those interesting edges.”
While Flying Dog is inching closer to reaching the 100,000-barrel maximum annual capacity at its Frederick site, the company has options, including expansion at the site or an enhanced relationship with F.X. Matt. In addition, Flying Dog purchased a 32-acre parcel of land just two miles from the Frederick brewery two years ago but has yet to build on it.
Still, expansion in some form is certainly in the cards if Flying Dog is to reach its ambitious ten-year goal. “We’ll be selling 300,000 barrels of beer all along the Amtrak corridor,” Caruso promises.