Baltimore Original

Starting
with his eponymously named pub in Baltimore, he has actively
worked in the business since 198O. In the mid-nineteen
eighties, Sisson decided he wanted to add a brewpub to his
restaurant. After determining that Maryland law did not
allow for on-premise brewing, Sisson and others petitioned
the state legislature to change the law. By 1989, Sisson’s
was Maryland’s first brewpub. By 1995, Sisson left the
restaurant business and decided to open the Clipper City
Brewing Company, along with a group of investors. Opened in
December of 1995, Clipper City now brews several successful
lines of ales and lagers, along with a substantial contract
brewing operation. In his free time, Sisson writes his own
blog of the beer industry and has co-hosted a regular radio
program on wine and beer, called Cellar Notes, since
1992.

Clipper City is dedicated
to promoting a broad portfolio of beer at the local level,
especially in its home market. Named for the clipper ship,
first built in the port of Baltimore, the brewery integrates
the region’s nautical and maritime heritage into its
packaging and promotional materials. The brewery now
distributes in eighteen states, including
Massachusetts.

I recently spoke with
him about the Clipper
City brands, freshness dating, and why craft brewers should
be leery of growing too big, too fast.

ANDY
CROUCH How did you
decide to move from the pub side to the package side of the
beer industry.
HUGH
SISSON There were
two reasons. First, I really enjoyed my run in the
restaurant and pub side – and the place was pretty
successful. The hours are really tough and I wanted to get
into the manufacturing side because I foolishly thought that
was going to simplify my life. The hours are just as long, I
just start a little earlier in the day and end a little
earlier in the evening. So I don’t know that I’ve improved
my quality of life. It’s been an interesting transition. In
my heart of hearts, I’d like to find some way to get another
pub. I underestimated the value of that as a marketing
platform for the brand. That would bring me full
circle.

AC
By my count, Clipper City has three sets of brands.
HS
We do. We have three distinct product groupings or brands.
Part of it was an evolution of our initial business
philosophy. We got started in 1995 to 1996, when the craft
segment of the beer market, which had been experiencing
enormous growth, started to level out. All of a sudden we
found ourselves in a market environment where getting
distribution anywhere outside of your backyard was extremely
difficult. So we were forced to go to a business strategy
where we were going to get local and deep. Everything we did
was focused around being locally named and positioned and in
some ways on more mildly profiled flavor styles. Those
brands have evolved into what we call the Clipper City
brands. There are four brands, BaltoMarzHon, McHenry Lager,
and Clipper City Gold and Pale. The second group is Oxford.
The first microbrewery in the Maryland area was a company
called Oxford Brewing Company. It was built around doing
classic English style beers. I believe their slogan was,
‘American beers with a British accent’. It was started by
two gentleman, one of whom is no longer in the industry. The
other is Steve Parkes, who is now of Otter Creek and
Wolaver’s. That company had its ups and downs. In 1997 or
1998 we acquired them. It’s been developed into a line of
wheat beers, including a raspberry wheat and a hefeweizen.
We’re still looking at changing that branding portfolio.
Four years ago, we felt there was a need to create something
that would allow us to expand our geographic footprint. The
Clipper City products wouldn’t do that, frankly because they
were just so locally positioned it didn’t make sense. There
was probably not much interest from a distributor in Florida
for a beer named for Baltimore. So we created the Heavy Seas
brand with a richer flavor portfolio. It’s targeted at the
real beer aficionados. I probably should have done it two or
three years before I did. That’s worked really well. There
are currently eight beers in that line, with three year
’round and five seasonals.

AC
How are these three sets of brands distributed?
HS
As it stands right now, the Clipper City brands are only in
Maryland, DC and Virginia. We’re pretty much going to stick
with that. The thought process behind that is the Chesapeake
Basin. I don’t think it makes much sense to take them beyond
that. Heavy Seas is currently in eighteen states plus
Washington, DC. Ultimately, we’d like to have it in
twenty-three or twenty-four states and then we’ll probably
stop. We want to make sure we can supply the sales support
and marketing infrastructure, which is critically important.
I think that’s where a lot of people fouled up in the late
nineties. We’re kind of sitting on the Oxford brand for now.
When we finish making our changes, I think we’ll try and put
that in all eighteen states as well.

AC
How has your experience been outside your home market?
HS
Some markets are more challenging than others. The New
England market is at first glance a little more difficult
than if we work south and west. With our North Carolina,
South Carolina and Georgia sale, we’ve been able to get to a
certain sales volume much faster there than in Pennsylvania,
New Jersey, Connecticut, and Massachusetts. I think the
southern markets tend to be more chain driven, while the
northern markets are more independent. And there are plusses
and minuses there. We’re continuing to roll up our sleeves
and adding more staff as we need to provide the level of
support that is requisite in this market
environment.

AC
When did you first enter the Massachusetts market?
HS
We first came into the Massachusetts market about three
years ago. We were relatively short-lived in our first
foray. There was a gentleman we were working with who was
starting his own distributorship and approached us. I think
he made a serious effort but was undercapitalized and it
became evident that it wasn’t going to work. After six or
seven months, we terminated that relationship. It then took
us probably sevent to nine months to figure out who to work
with. We’ve been back in the market for two years
now.

AC
How have your attempts fared in trying to enter the Boston
market?
HS
The Boston market is very, very competitive. There’s an
interesting path that we need to follow. We’re making
inroads but it’s scratching and clawing. There are no slam
dunks in this business. To be successful, you have to get
faucets in on-premise accounts. That’s not the easiest thing
to do. By virtue of fact we’re not local, you’re going to
get out-flanked by your local players. They’ve got the
forces in the market to do it and they should. So you have
to find other ways to get your foot in the door. One way
we’ve tried, though we can’t do it on the scale we’d like,
is that we’ve been bringing up cask-conditioned beers. There
are a small number of high-end beer accounts that if you can
bring them a firkin of cask-conditioned beer, they may give
you a place. That’s a good way to get your foot in the door.
Hopefully you can turn that into a regular
faucet.

AC
Between all the brands, is there a distinct flagship.
HS
Without question, it’s the Loose Cannon Hop3 IPA. That beer
is far and away our best-selling product. It’s part of the
Heavy Seas portfolio. All of the Clipper City brands do
well, but it’s all local. The Heavy Seas brands should do
better by virtue of the fact they are more widely
distributed.

AC
How important is freshness dating?
HS
I think it’s pretty important from the standpoint that it
gives you some credibility with consumers. The only thing
that is tough about it is that quantifying anything in one
simple measurement is typically misleading. For example,
because of the nature of the dark malt in darker beers,
there is a good resistance to oxidation. Dark beers could be
dated a hell of a lot longer than they are. One of the
things that people don’t understand is that the most
delicate beer we make is the Loose Cannon because of all the
hops that are in it. The hop compounds will oxidize quite
quickly and that’s kind of counterintuitive. Many people
think IPAs will wear like iron. Guess what, they’re wrong.
At least doing something that gives the consumer some sort
of criteria in determining whether something is fresh is a
good idea. Anything we can do to give a consumer a way of
determining whether the product is as it should be is
good.

AC
Craft beer has enjoyed substantial growth lately. Where do
you see the craft market going in the next five years?
HS
I think a couple of things. First off, despite what the
major brewers may say, I think it’s pretty well demonstrated
at this stage that craft beer is not a fad. It’s not going
away and it’ll continue to develop. Having said that, I’ve
been in this industry for twenty-five years and things run
in cycles. Right now, we’re in a good cycle. Do I think it
will stay at this level? No. I fully anticipate a slowdown
at some point in time. Then we’ll have a few years where
growth will be difficult to attain and then I think it will
pick up again. That’s just the natural flow of business. I’d
like to see the numbers stay fifteen percent or below
because that’s pretty sustainable growth. The base we’re
working on is still relatively modest. If it drops to seven
and five percent, that is still a real number. If it heats
up to 3O-percent again, like in the late nineties, then the
category starts to overheat. Not to take a Greenspanian
perspective, but I think you have to be aware that it will
attract people who have no business being in the industry
and who are looking for a quick dollar. I think that is what
happened in the early to mid-nineties and why we had a bit
of a Darwinian correction.

AC
The Brewers Association has begun to assert itself more in
the last year, both in promoting craft brewers in
Washington, DC and abroad. It also redefined ‘craft brewer’
to exclude breweries that are owned in part or in full by
larger companies, such as Anheuser-Busch. What are your
thoughts on the politics of this and the renewed interest of
larger breweries in the craft category?
HS
I’m kind of on the fence about this. I don’t think it makes
sense to exclude Goose Island and Widmer or Old Dominion
from what we consider to be craft beers only because of a
business affiliation they have. It was a business move made
to open up distribution and market share and I think that’s
good. Having said that, I’m not thrilled that most consumers
don’t know that Blue Moon is brewed by Coors. I’m not really
sure what Anheuser-Busch is trying to do. I’m not sure that
their involvement is ultimately good for the craft brand
because the people who are interested in what people like me
are doing are not interested in anything Anheuser-Busch. The
Widmer numbers, however, are a good story of success. I
think a lot of this has to do with the maturation of the
industry. This is not hobbyist any more. Even for people
like me for whom this began as a hobbyist venture, this is
what we do. We are professionals in this industry. My fear
is that people become so exclusive that we become beer
snobs. I don’t think that’s beneficial to anybody.