Like in the rest of the country, Maryland’s COVID-19 cases are once again on the rise. While we hoped to be out of the woods by now, we still have a lot of work to beat back the virus and recover from the economic downturn. That’s why Marylanders need Congress to pass the bipartisan Hospitality and Commerce Job Recovery Act without delay, so our state’s affected businesses, including its vibrant beer industry, can get the additional help they need to get back up and running.
The COVID-19 pandemic hit Maryland’s beer industry especially hard. Our state lost more than $540 million in retail beer sales last year, and more than 11,000 Marylanders whose livelihood depends on the beer industry lost their jobs.
Heavy Seas was no exception to this drop in beer sales. Like other small breweries in Maryland, Heavy Seas builds up our inventory of beer in kegs when the weather warms for sales to our wholesaler partners, and to welcome more people into our taproom, host events, and introduce our patrons to new beers that we have been working on throughout the winter. When the emergency was declared in March 2020, our wholesaler partners had significant inventories of draft beer, and we had plenty more on hand for our taproom. With all bars and restaurants shut, there was no way to get the beer in kegs to customers. Unlike wine or liquor, beer has an expiration date, which meant that we ended up having to get rid of over $75,000 worth of beer. Insurance did not cover this loss, forcing us to shoulder the massive cost of the spoiled beer.
During the onset of the pandemic, we created two staff teams that worked alternating shifts so if one of our employees came down with COVID-19, we could quarantine half the staff while still producing beer. This change caused our staff costs to increase, further hurting our business as our beer sales declined. Because of the COVID-19 pandemic, we had to close our taproom from March 2020 until May 2021. For small brewers like Heavy Seas, our taprooms allow us to try out new beers with our customers to see how they will fare in the marketplace. Also, taprooms are the most profitable part of the brewery, because we can sell beer directly to customers without needing to package the beer. Having to close our taproom for fourteen months meant that we lost the most profitable part of the brewery and missed the opportunity to see how customers would react to the new beers we had been crafting.
We are doing our best to sustain the business, and we are grateful for the fantastic Maryland community that continues to embrace Heavy Seas. The reality is that it is just going to take time to recover. The current increase in COVID-19 cases is making a significant recovery more complex.
The Hospitality and Commerce Job Recovery Act will provide much-needed assistance to businesses like Heavy Seas. The legislation will provide a one-time business tax credit for unsalable inventory lost during COVID-19, including the spoiled beer. Small brewers were not alone. Restaurants, hotels, farmers, and fisheries also found themselves with perishable goods that expired during forced closures. The assistance in the Hospitality and Commerce Job Recovery Act will help many of these small businesses across Maryland.
In my 30 years in the beer industry, I had never imagined that a global pandemic would completely upend our business model, close our taproom, and force us to destroy thousands of dollars worth of beer. The relief offered by the Hospitality and Commerce Job Recovery Act will help ensure Heavy Seas can continue to be a vibrant member of the Baltimore community, providing local jobs, supporting non-profits through our community events, and welcoming people to our brewery to enjoy a great beer. With so many companies in our state in a similar position, Congress must pass a bill to assist small businesses across the state recover from the pandemic.
Dan Kopman is chief executive officer of Heavy Seas Beer. He can be reached at firstname.lastname@example.org