In this episode of the UnCapped podcast, host Chris Sands talks with Heavy Seas Beer founder Hugh Sisson about their recently released canned cocktails, Heavy Seas over the years, the craft beer industry as a whole, as well as supply shortages and other difficulties facing craft breweries today. Here is an exception of their talk.
UnCapped: It’s been so long since the last time I talked to you, I can’t remember if we decided you were the Godfather or the Grandfather of Maryland Beer.
Hugh Sisson: I’m not so sure, but that always makes me feel old. I’ve been doing it a long time.
UnCapped: I feel increasingly old every time I talk to anyone lately … because everyone is so much younger now. But Heavy Seas has been instrumental in every aspect of what Maryland beer is now and how you can operate legally. Heavy Seas has been there lobbying and advocating.
Sisson: We’ve certainly been heavily involved in craft beer since the beginning. It started with being for the legalization of brewpubs in 1987. My family’s bar restaurant in Baltimore became the first brewpub in Baltimore in 1989, stayed involved in the legislative measures there to get the growler bills passed, the amount of volumes people could sell, and have been pretty heavily involved in all of those activities. I was one of the co-founders of the Brewers Association of Maryland. It’s been a long road. It’s been very rewarding. I’ve certainly met a lot of wonderful people along the way — some of them even in the Legislature.
UnCapped: It is crazy to think back, probably close to a decade now, to how different breweries had to operate.
Sisson: The taproom legislation completely changed the business model.
UnCapped: Really until five or six years ago, the taproom was really an afterthought here.
Sisson: Yes, for us it was because it wasn’t part of our overall business plan. Now the taproom is an increasingly important part of our business plan, partly from a revenue perspective, and partly from a brand experience perspective. Our taproom here is going to get renovated from now until probably early spring, because we feel we need to make this much more of a branding and marketing platform for our overall product experience.
UnCapped: I think the first time I was ever here, the taproom was that tiny, little corner.
UnCapped: It was just the width of the bar, basically.
Sisson: It certainly has evolved. It’s an emerging part of our overall business plan. It was a game-changer, because there are so many smaller breweries all over the country whose business model is completely around their taproom business with a little bit of outside sales. We’re clearly the other way around.
UnCapped: Which was probably beneficial for you over the past two, three years.
Sisson: That whole COVID experience was a real kick in the tush for everybody in this industry. … To give you some relevant numbers, draft business was 35% of our business when COVID hit. In January 2020, I had approximately 2,000 accounts purchasing draft beer. In April, I had six.
UnCapped: Yeah, that’s a drop off. That’s not the graph you want to see.
Sisson: Now, let’s not lose sight of the people who really got hurt, the people who owned those bars and restaurants. They lost everything.
UnCapped: I’m always interested in breweries that have been around for a while and obviously went with bottling first, because no craft brewery was getting a canning line 15 years ago.
Sisson: Fifteen years ago, 95%-plus of all craft beer was sold in 12-ounce glass bottles.
UnCapped: Yeah. Everyone thought that you couldn’t get a good beer in a can, that it would taste like aluminum, that only the crappy beer was in cans.
Sisson: Well, Dales began to change that paradigm.
UnCapped: We got the press release for what I guess is the largest exploding segment in alcohol right now. You came out with a mixed eight-pack of crafted cocktails.
Sisson: And then we have the Orange Crush and Watermelon Crush.
UnCapped: I guess it’s pretty obvious why you decided to get into this segment, because it is often listed as the No. 1 growing segment.
Sisson: If you take a good look at what’s happening across the industry, there’s 8,000 new breweries in the last eight years. The beer business, as it stands alone, is becoming extremely challenging. Nationally, I think beer is down 3% to 4% this year. Beer has been losing share to spirits for 15 years.
UnCapped: Is craft also losing that?
Sisson: Absolutely. The whole beer industry. So what you’re seeing is a lot of beer companies are morphing into what we call beverage companies. If you wanna continue to play in the game, you’re gonna have to do some stuff. You have to be ready to broaden what you offer and look at lots of different market segments.
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