US beer shortage and price hikes loom with carbon dioxide shortage and supply hurdles

The supply chain crisis and an extinct volcano are spurring a new beer shortage.

  • “We’ve been running delivery to delivery for the past few weeks, and we are certainly concerned about the supply,” Aeronaut Brewing’s co-founder Ronn Friedlander told Axios Boston’s Mike Deehan.

Zoom in: 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.
  • Nightshift Brewery outside Boston shut down a facility after being told their carbon dioxide supply was “cut for the foreseeable future, possibly more than a year.”
  • Others are paying 3-4x as much.

Zoom out: The carbon dioxide shortage is the newest threat to the beer industry’s rebound from the pandemic.

  • Beer makers — particularly small, independent craft brewers — are struggling with inflation and supply chain problems.
  • “It’s become a struggle to keep the doors open,” one brewer recently told Bart Watson, an economist at the Colorado-based Brewers Association.

The other side: A handful of brewers are insulated from the shortage because they use innovative technology to capture natural carbon dioxide from the brewing process and store it for future use.

  • Denver Beer Co. in Colorado uses reclaimed CO2 and sells extra supply to a cannabis company for use in the grow houses.

What’s next: Beer prices have risen less than the broader food and beverage market, but that could change as the rising cost of inputs — whether CO2 or grain — leads to a more expensive pint.

.

Leave a Comment

Your email address will not be published.

%d bloggers like this: