- Persistent supply chain issues and relentless inflation pose cost and supply challenges for a thriving industry that refuses to close its shelves and bars
The draft or craft beer industry in the United States faces a dilemma: its sales are recovering to pre-pandemic levels; however, their profits were reduced by the high costs of raw materials and the scarcity of inputs.
The country has seen how the shelves have been emptied of certain products that have yielded to the pressures that supply chain problems still exert.
From toilet paper early in the pandemic, to computer and vehicle chips, to tampons and baby formula, all of these products have been in short supply on shelves, and beer could be the next victim.
A complex scenario for brewers
The cocktail for brewers is made up of inflation, which leaves costs high, and problems in the supply chain, which causes shortages and also more expenses.
In particular, the brewing industry, large and small, is struggling to get hold of carbon dioxide (CO2) and aluminum cans for packaging.
CO2 is used in the industry to carbonate beers, but also to clean the tanks and to prevent oxygen from filling them when they are empty.
However, this product has been difficult for brewers to obtain and, when they have made it, they do so at costs that may even be double what they usually paid, according to a USA Today report.
But it’s not all, brewers are also dealing with higher prices on basic ingredients like malted barley, hops, paper and even shipping costs due to volatile gasoline prices.
“I don’t know if I can think of a scenario where there would be no beer from a brewery, but I can understand a scenario where there would be a limited or smaller supply since beer has a short shelf life,” said Chuck Aaron, owner and founder of Jersey Girl Brewing.
As for cans, their prices have also had significant variations that add challenges for the industry, which has sought ways to avoid raising prices for its customers.
In general terms, the inflationary rises have increased the cost of all the products, supplies and services that brewers need to manufacture the beverage so loved around the world.
Although this industry is accustomed to getting around certain difficulties, economic turmoil and inflationary pressures have brought more and more problems to solve on their list of challenges.