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

A glass of craft beer in Cypress, Calif., on July 9, 2022. (John Fredricks/The Epoch Times)

There are currently fears across the United States about a looming beer shortage due to a lack of supplies of carbon dioxide, the vital gas that makes the beer fizz.

Breweries are facing a critical nationwide shortage of CO2 due to higher material costs, lingering supply shortages, and the temporary shutdown of a carbon dioxide capture operation at the Jackson Dome in Mississippi.

Small craft breweries are especially vulnerable to the CO2 shortage, due to their smaller operations and shorter supply chains compared to the larger commercially-owned breweries.

Without carbon dioxide, beers will fall flat as the gas contributes to beer foam, shelf stability, and the production and packaging process.

CO2 is also used widely in the food and beverage industry as a refrigerant, as packaging to improve shelf life, to carbonate soft drinks, and to make dry ice used to keep food frozen for home deliveries, which have been booming since the pandemic began.

Beermakers have also been dealing with a spike in the cost of bottles and cans, concerns over the barley supply due to the conflict in Ukraine, and rising transportation costs because of high fuel prices and driver shortages.

A Vital Gas

A Mississippi CO2 facility that supplies a significant amount of the gas to American businesses is reportedly experiencing a contamination issue with its naturally producing wells, but Denbury Inc., the company that operates the facility, denied that there was any contamination and said instead that its food and beverage customers may have processing issues in their distribution chains, according to NBC News.

“We are assisting them in timely resolving these matters, as appropriate,” the company said.

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

In an interview with trade publication Gasworld, Sam Rushing, president of Advanced Cryogenics, said that CO2 contamination issues can “leave a product at risk of bad tastes, strange odors, spoilage, and product recalls.”

Rushing said that a potential shift in the geology of the region near Jackson, Mississippi, may have released contaminants such as sulfur compounds into the CO2 gas wells.

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

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 siphon off the gas during the fermentation process, but the smaller craft breweries do not produce enough beer to make CO2 from fermentation, according to the Brewers Association, a trade group representing 6,000 smaller independent breweries.

“Some of our members had to stop production because a gas shipment was delayed or they ran out of CO2,” said Chuck Skypeck, director of technical brewing projects for the Brewers Association, in an interview with The New York Post.

“We are hearing reports from members of decreased production. We might 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.”

Craft Breweries’ Crisis

Night Shift Brewing, a popular craft brewery in Everett, Massachusetts, reported it may cut as many as 12 jobs in October due to a lack of CO2, and the company said it could be a year until they 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 by Oct. 1.

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

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

“This is the straw that broke the camel’s back,” he said. “It has put us in a tough spot. It’s awful.”

He said that the brewery had been fighting shortages of malt and the aluminum used in its beer cans over the past two years after the pandemic hit.

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

“Several of my brewers received a Force Majeure letter yesterday from their CO2 supplier letting them know that their plant in Illinois just suffered a mechanical failure that will shut the plant down until mid-September,” according to Katie Stinchon, executive 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 should expect delays,” she wrote.

Stinchon told WBTS-TV in Boston that a dozen or more breweries were experiencing the same shortages as Night Shift Brewery, and those were only the ones that she'd heard from.

Industry Wide Problem

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

The United States was home to over 9,ooo craft breweries at the start of 2020, according to the Brewers Association’s website.

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

“There’s been spot shortages across the country since the beginning of the pandemic,” he said.

The halt in CO2 supplies has surprised small brewers, exacerbating the situation for many beyond the point of recovery.

“Our members are coming through two-and-a-half years of COVID shutdowns and other supply chain issues and inflation, so it’s just another blow in a long series of challenges they’ve had to face,” Skypeck noted.

“Some members have thrown in the towel,” he said. “I think it’s just the start.”