Supply-chain shortages are threatening the craft brewing industry.
Key Details
- Mining contamination and market forces are causing delays in production and potentially shuttering craft breweries.
- Prices on CO2 have reportedly multiplied three to four times higher for some breweries.
- “A carbon dioxide production shortage caused by natural contamination at the Jackson Dome—a Mississippi reservoir of CO2 from an extinct volcano—is forcing brewers to cut back. Brewers across the country are reporting production delays in getting beer to the market and drafting contingency plans to switch to nitrogen,” says Axios.
- The industry was struggling earlier this year as carbon dioxide had been diverted to produce dry ice to transport COVID vaccines in 2021, according to Axios.
- “We’ve been running delivery to delivery for the past few weeks, and we are certainly concerned about the supply,” says Aeronaut Brewing founder Ronn Friedlander.
- “Another factor … is planned and unplanned maintenance shutdowns at several ammonia plants that are key producers of CO2,” says DailyMail.
Why it’s important
The shortage has driven up the price of carbon dioxide three to four times what it was, which likely will hurt smaller breweries more than larger ones. Small companies, already struggling with ongoing economic, supply-chain, and inflationary pressures, are going to take the brunt of the impact.
Boston-based Nightshift Brewery has already released a statement that it has had to close one of its facilities due to a lack of CO2 for the “foreseeable future, possibly more than a year.”
“Last week, we learned that our CO2 supply has been cut … Breweries depend on CO2 to make beer, so this was pretty awful news to get. Seems like this will be an issue that impacts a lot of local breweries, so we’re probably one of many breweries facing this new threat to our business,” says Nightshift Brewery.
The CO2 shortage may also cause beer shortages, conflicting with the 8.9% demand increase in beer sales since the start of the pandemic, according to TopAgency.
Notable quote
“The CO2 shortage is not the only issue. Inflation has pushed the price of aluminum cans up by 20 percent in a year, according to the website Good Beer Hunting, while malt is up 30 percent and shipping 50 percent. Labor costs have increased by 20 percent. The government’s Consumer Price Index shows beer prices up 5 percent this year, but Chuck Skypeck with the Brewers Association told WCPO that he believes prices could go higher,” says The Daily Mail.
