In an effort to broaden its innovation pipeline and grow its direct-to-consumer business, Maryland’s Heavy Seas beer will invest upwards of $2 million to expand its brewery and taproom.
In an interview with Brewbound, brewery founder and managing partner Hugh Sisson said the project, which will be financed through a combination of cash flow and bank debt, would include the installation of a new 15-barrel pilot brewing system (for research and development) and a more robust canning line.
As part of the expansion, Heavy Seas will tack on 20,000 sq. ft. of space in an adjacent building located less than 50 feet away from its existing facility. The brewery’s offices and warehouse as well as shipping and receiving operations will move into the space, allowing Heavy Seas to grow its tasting room from 900 sq. ft. to almost 5,000 sq. ft., Sisson said.
“Taprooms, as a marketing platform, have become significantly more important than they ever used to be,” he said. “About four years ago, we expanded from 15,000 sq. ft. of space into 40,000 sq. ft., and our taproom was an afterthought.”
The company plans to connect the two buildings, which already share the same address, with the construction of a passageway for forklifts and brewery employees, Sisson said.
Heavy Seas’ decision to ramp up innovation efforts, as well as direct-to-consumer sales, follows two key developments in its home state:
Earlier this year, global drinks giant Diageo, which owns Guinness, announced it would spend $50 million to build a massive brewery and visitor center about a mile from Heavy Seas’ headquarters.
But in order to keep that project moving forward, state lawmakers needed to pass House Bill 1283, which bumped the cap on direct sales from 500 barrels annually, to 3,000. Maryland brewers are now permitted to sell 2,000 barrels directly to drinkers in their tasting rooms. They are also allowed to repurchase an additional 1,000 barrels from wholesalers for on-site resale.
Those two developments gave Sisson the increased confidence to invest in a brewing system for experimental small batches and a larger taproom, which will include a separate space for private events, he said.
“Guinness is building a Disneyland experience about one mile away from me,” he said. “They are expecting 250,000 to 300,000 visitors per year. I am pretty sure I am going to get at least 20 percent of that, so we would be stupid if we didn’t expand.”
Heavy Seas currently sells about 300 barrels of beer through its taproom annually, and Sisson expects sales to at least double in 2018 when the taproom officially opens.
“I think our taproom sales will increase significantly once we have more space,” he said.
Heavy Seas, which sold about 50,000 barrels during a down year in 2016, is on pace to rebound and grow as much as 8 percent this year, Sisson said.
“We are up almost 10 percent in our backyard,” he added. “As long as we can continue to do that, we are good.”
Sisson credited the company’s “Canon” line of IPAs with driving much of its growth in 2017.
“Our TropiCanon citrus IPA is doing really well, and I still have distributors who haven’t brought it in yet,” he told Brewbound, noting that the company would discontinue its Cross Bones session IPA in favor of adding a fourth Canon line extension in 2018.
“The Canon family subset really seems to be taking on a life of its own,” he said.