- Beer makers are facing many challenges as inflation and supply chain issues raise cost of brewing and shipping.
- Shortages in aluminum cans and carbon dioxide, used in brewing, have hampered some brewers.
- For consumers, beer prices are rising – up 5% so far this year – but not as fast as on other goods including food, which rose about 11%.
The potential arises as beer makers, big and small, are under pressure from a confluence of inflation and several supply chain issues. Some breweries have found it challenging to get carbon dioxide (CO2), which is used to clean tanks and carbonate beer. When they do get it, the price is often higher, sometimes twice what they used to pay.
Also rising: the price of other ingredients such as malted barley and the cost to ship that and other products.
All this could lead to higher beer prices. And, it could result in some of your favorite beers being out of stock or not on tap.
“I don’t know if I can think of a scenario where there’d be no beer from a brewery, but I can understand a scenario where there would be a limited or smaller offering, as beer has a short shelf life,” said Chuck Aaron, owner and founder of Jersey Girl Brewing in Hackettstown, N.J.
The environment is challenging enough that it could force some breweries to close. “This could certainly be a factor in closures,” Bart Watson, chief economist for the Brewers Association, told USA TODAY.
In a mid-year survey of the association’s membership – about 5,600 U.S. small and independent breweries – some brewers’ sentiments amounted to, “we’re selling as much beer as we were pre-pandemic, but making far less on that beer, and we’re unsure how long that is sustainable,” Watson said.
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Why could there be a beer shortage?
Because breweries, which are accustomed to some supply chain struggles, face a growing list of headaches. The price and availability of aluminum cans became increasingly volatile as cans became critical to breweries’ survival. Many had pivoted to curbside pickup and offsite distribution during the national shutdown brought on by COVID-19.
Similarly, the supply of CO2 has “remained tight since the shortages in the Spring of 2020,” Watson said in a recent report. Breweries have often got less than they ordered – or worse, not had promised amounts delivered at all.
Now, inflation has driven up the entire cost of breweries’ shopping list, just as it has for all Americans. That means breweries are likely paying more for CO2, cans, paper goods, malt (grains needed for making beer), and hops.
“What’s unprecedented is the number of areas where we are seeing challenges,” Watson told USA TODAY.
Settle Down Easy Brewing Co. in Falls Church, Virginia hasn’t been hit hard by CO2 price increases, but is paying an additional two cents per can for its canning line, purchased during the pandemic, said co-owner Frank Kuhns.
But other price increases have hit harder including $150-$300 “gas travel” fees for each delivery from suppliers, and labor and equipment costs of 30% to 40% more than originally budgeted, for the construction of a second Northern Virginia location a few miles away in Oakton, Virginia.
So far, “we have made the decision to hold and not pass these increases onto the customer and instead look for new suppliers or cutting costs without sacrificing quality,” Kuhns said.
Despite the dilemma, the nation’s beer taps won’t likely run dry. But they could be tempered, he said.
“I’m not sure I’d go so far as to say there will be shortages. Individual producers may have…