Meet a Brewer: Hugh Sisson of Heavy Seas Beer (Baltimore, MD)

Hugh Sisson is the founder of Heavy Seas Beer – formerly known as Clipper City Brewing Company – in Baltimore, Maryland. A native Baltimorean, Hugh got his start in the craft beer industry in the early 1980s, running the only craft beer bar in the city with his father. A few years later, he successfully lobbied the Maryland General Assembly to legalize brewpubs in the state. 

What was the biggest challenge for Heavy Seas during the height of the pandemic?

From a production standpoint, we were open straight through the pandemic, but our taproom was closed for 15 months. The craft beer segment of the industry is much more reliant on on-premise sales than the more major brewers are. Our business was 35% draught beer to bars and restaurants in January of 2020, and I had 2,000 accounts purchasing draft beer. In April 2020, I had six. 

The biggest challenge for us when the pandemic hit was the massive pantry loading on the package side of the business, with the majority being cans. Specific to our operations, my bottling line runs 250 bottles per minute and my can line runs 90 cans a minute. So, by the time we lost the margins on the draft beer, and then went to the least efficient part of our overall operation, it meant we had a nice spike in the package business, but really took a hit overall. 

What have you been doing to mitigate the effects of labor shortages, inflation and supply chain disruptions on your operations? What would you like to see Maryland’s lawmakers do to support local brewers like you?

While we’ve definitely had some issues with labor, we’ve been much more fortunate than many. We were able to take advantage of the Paycheck Protection Program (PPP), which allowed us to keep all of our staff basically intact. For the most part, I think that the folks who I work with, understood that as an organization, we were doing everything we could to try to maintain those jobs. Second, we’ve stripped away every conceivable cost that we could strip away. We may actually be a little too lean right now, but having said that, you have to pay attention to the numbers. And the third thing is, you can’t let anyone see you sweat. You have to keep a positive attitude, because we’re gonna get through this; inflation isn’t going to be here forever and neither are supply chain issues. 

However, I do think that we are a minimum of 12 to 18 months away from knowing what the “new normal” looks like, and now is not the time for the government to be throwing us curveballs. If we look at Virginia, for example, the state has done a really good job of promoting its wine industry and Maryland has also begun to do a pretty good job of promoting its wine industry, too. Now, I’d like to see the state of Maryland start trying to work more closely with our trade association – the Brewers Association of Maryland – to promote our local brewing industry because locations are attracting tourism dollars, providing jobs and generating excise taxes. Let’s face it: brewing beer, even on a small scale, is still manufacturing jobs. And we like manufacturing jobs. 

In terms of consumer habits, what trends have you been seeing recently?

Well, cans have been an emerging priority in the entire industry for the last five to seven years. A decade ago, 90% of all the craft beer sold was in bottles and now 70% of all craft beer is sold in cans. So there’s been a paradigm shift.

With thousands of new breweries opening in the last eight years – and most of them being small – you saw an explosion of four pack, 16 ounce cans from really small players hitting retail. The consumers seemed to be all about that for a while, but I think that’s beginning to slow down. And obviously, the other thing that we’ve seen is the emergence of seltzers, and now RTDs. Beer has been losing share, vis-a-vis spirits in particular, for about 15 years now. 

Speaking of which, state and local governments are considering lower tax rates for lower-proof RTDs. Do you see this as a threat to business? 

Absolutely. We’re about to get into the RTD business, but I don’t want to see lowering of excise taxes on that because it weakens beer. RTDs are going to be, hopefully, another little layer on my business, and generate some additional profits, but the core thing that I do is beer – and beer has already been under siege for the last 15 years. There’s a small number of companies that are controlling the lion’s share of the spirits industry, and any advantage that they get is dangerous. 

From a public policy perspective, what are three lessons you’d give to someone just starting out in the industry?

The first thing you have to do is build a relationship with local politicians, from everyone at the municipal, to the county, to state legislative levels. You need to be involved. You should have a trade association. And if you do have a trade association, the trade association probably has opportunities to have receptions for lawmakers, and you’ve got to do that. You need to be in a position where lawmakers – especially the ones whose districts you’re in – know your name. And if you’re not doing that, you’re putting yourself at risk because  you’ve got to have those relationships. Whether you’re dealing with professional lobbyists, or doing grassroots work, you need to build your network. 

Secondly, you need to know the positions the opposition is going to take. And you need to respect those positions, so you can have an honest dialogue with the legislators and counter some of their positions, but understand that compromise is probably where you’re going to end up. You need to know what’s going on, so that you can reach an effective compromise. 

Finally, always try to stress to the legislators that things evolve, meaning what you’re asking for today might be different from what you’re going to ask for three or four years from now. When I started lobbying the Maryland legislature back in 1987, I had no idea where this industry was going to go. What I asked for then, and what I would have asked for if I had 30 years of hindsight are two completely different things. Legislators may not like it when you show up every year, but sometimes you just have to. The more you can say, “Look, I don’t know where this is gonna go and I may be back a lot” is good advice.