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American Craft Breweries Warn of National Beer Shortage Due to Loss of Key Carbon Dioxide Supplier

American Craft Breweries Warn of National Beer Shortage Due to Loss of Key Carbon Dioxide Supplier

In the United States, there are currently fears of an impending beer shortage due to a lack of supplies of carbon dioxide, the vital gas that makes beer fizz.

Breweries are facing a serious national shortage of CO2 due to higher material costs, ongoing inventory shortages and the temporary shutdown of a carbon dioxide capture operation at Mississippi’s Jackson Dome.

Small craft breweries are particularly vulnerable to the CO2 shortage, due to their smaller operations and shorter supply chains compared to the larger commercial breweries.

Without carbon dioxide, beers fall flat as the gas contributes to beer foam, shelf life, and the manufacturing and packaging process.

CO2 is also widely used in the food and beverage industry as a refrigerant, as packaging to improve shelf life, to carbonize soft drinks and to make dry ice used to keep food frozen for home delivery, which has been a staple since the start of the pandemic. has taken off.

Beer makers have also faced spikes in bottle and can costs, barley supply concerns due to the conflict in Ukraine, and rising transportation costs due to high fuel prices and driver shortages.

A vital gas

A Mississippi CO2 facility that supplies a significant portion of the gas to US companies reportedly has a contamination problem with its naturally-producing wells, but Denbury Inc., the company that operates the facility, denied any contamination and instead, said her According to NBC News, food and beverage customers may have processing problems in their distribution chains.

“We help them resolve these issues in a timely manner,” the company said.

Combined with ongoing labor disputes over railroads in the Midwest, the shortage is making it harder to get Denbury’s limited supply of customers.

In an interview with trade publication Gasworld, Sam Rushing, president of Advanced Cryogenics, said CO2 pollution issues “can put a product at risk of bad taste, strange smells, spoilage and product recalls.”

Rushing said a possible shift in the region’s geology near Jackson, Mississippi, may have released pollutants such as sulfur compounds into the CO2 gas wells.

“The longer this goes on, the more difficult supplies will become. As to when it will be resolved, all I can say is that any moment since the start of this contagion is too long; all this leads to much higher prices, allocations and significant product shortages,” Rushing warned.

Carbon dioxide supplies were already tight after pandemic shutdowns forced many key suppliers offline, and CO2 facilities often go offline during the summer for scheduled maintenance.

The larger breweries have their own equipment to tap the gas during the fermentation process, but the smaller craft breweries don’t produce enough beer to make CO2 from fermentation, according to the Brewers Association, a trade group that represents 6,000 smaller independent breweries.

“Some of our members had to shut down production because a gas delivery was delayed or because they ran out of CO2,” Chuck Skypeck, director of brewing engineering projects for the Brewers Association, told The New York Post.

“We are hearing reports from members of reduced production. We may start to see shortages in a few weeks, especially if the situation continues,” he said. “It’s an ingredient in beer, if you don’t have it, you can’t make beer.”

Crisis at craft breweries

Night Shift Brewing, a popular craft brewery in Everett, Massachusetts, reported it could cut as many as 12 jobs in October due to a lack of CO2, and the company said it could take a year to receive more.

“This is a huge threat to our business,” the company said in an Instagram post.

Night Shift was the third largest brewery in Massachusetts in 2020, employing 110 people year-round and up to 150 during the busy summer season, just behind Samuel Adams and Harpoon Brewery, according to the Boston Business Journal.

The Massachusetts beer maker is now temporarily moving its canning and other operations to Jack’s Abby in Framingham, Massachusetts, and The Guild Brewing Co. in Pawtucket, Rhode Island. Nigh Shift plans to close its own facility effective October 1.

The move will allow production to continue while the brewery’s taproom remains open for business as usual, Michael Oxton, co-founder of Night Shift Brewing, told FOX Business.

Oxton said that “since COVID hit, we’ve been dealing with several supply chain shortages and all kinds of problems.”

“This is the straw that broke the camel’s back,” he said. “It has put us in a difficult position. It is terrible.”

He said the brewery had suffered a shortage of malt and the aluminum used in its beer cans for the past two years after the pandemic.

Other craft brewers are reporting similar problems, which could be a bad sign for beer supply.

“Several of my brewers received a Force Majeure letter from their CO2 supplier yesterday informing them that their Illinois facility has just suffered a mechanical failure that will require the facility to close until mid-September,” said Katie Stinchon, executive director. director of the Massachusetts Brewers Guild, in an email to The New York Post.

“The result is a 30 [percent] reduction in contracted volume for at least the next month, and they must allow for delays,” she wrote.

Stinchon told WBTS-TV in Boston that a dozen or more breweries had the same shortfalls as Night Shift Brewery, and those were just the breweries she’d heard of.

Industry-wide problem

The Boston Business Journal said at least a dozen craft brewers across the state were told by their suppliers that their current shipments of CO2 were guaranteed, but that their next shipments may not be.

According to the Brewers Association website, there were more than 9,ooo craft breweries in the United States at the beginning of 2020.

Skypeck told NBC News that he had received reports from his association members in virtually every part of the country saying they are dealing with tight carbon dioxide supplies.

“Since the start of the pandemic, spot shortages have been seen across the country,” he said.

The cessation of CO2 supply has taken small brewers by surprise, exacerbating the situation for many after the point of recovery.

“Our members have endured two and a half years of COVID shutdowns and other supply chain issues and inflation, so it’s just another blow in a long line of challenges they’ve faced,” Skypeck noted.

“Some members have thrown in the towel,” he said. “I think this is just the beginning.”

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Bryan S. Jung was born and raised in New York City with a background in politics and the legal sector. He graduated from Binghamton University.