The price of carbon dioxide has increased following a shortage of the gas. The scarcity comes on the tail end of a multi-year period in which prices on just about everything in the brewing process have increased.
Wim Bens, president and co-founder of Lakewood Brewing Company, says that he is paying a 20% surcharge on CO2 orders right now. He's not the only one.
"Yes, we have been affected by the shortage and are currently paying a surcharge that was recently added," Jon Powell at Hop and Sting Brewing Co. says. "We strive to produce affordable beers for everyday drinking in addition to some of the more expensive styles. We held off as long as possible but were finally forced to raise our wholesale prices on Sept. 1 of this year."
As for the cause of the shortage, Paul Pflieger, communications director of the Compressed Gas Association trade group, told NPR it has to do with a slowdown in the production at ammonia plants, which is necessary for the production of CO2. Additionally, ethanol plants went offline during the pandemic and haven't resumed full operations yet. Add to that a hot summer and a soaring demand for CO2 as people drink more beverages and supplies are tight. Pflieger anticipates the market to return to normal within the next two months.
Powell says they don't plan to raise their prices for customers at the brewery. "In the craft brewing business, we are no stranger to these sudden increases in the cost of our raw materials. We will do our best to tighten our belt and get through without raising the cost of our beers to our customers," Powell says
The increase in the price of carbon dioxide is just the tip of the iceberg, though.
"We have seen price increases of 10–20% on pretty much every raw material we use with the exception of hops, which we have future contracts on those that lock in our pricing," Powell explains. "Even energy prices have increased on us, as well as rent since we (and many commercial leases) are required to pay the actual amount of property tax, which has gone up due to the state significantly increasing valuations of properties this year."
Bens listed aluminum, glass, malt, hops, shipping and cardboard among the cost increases since the start of the pandemic, adding that it is "making already slim margins even slimmer."
However, not all breweries seem to be as affected by rising CO2 costs. Steve Porcari, the co-founder of Four Corners Brewing Co. in Dallas, said that brewery has not been affected by the shortage and expects the supply to be back to normal next month.
A representative from TUPPS Brewery in McKinney said that the shortage is creating more problems for breweries in the Northeast."We have seen price increases of 10–20% on pretty much every raw material we use with the exception of hops." – Jon Powell at Hop and Sting Brewing Co.
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Bens agreed that carbon dioxide is still cheaper in Texas compared to other states, despite the price increases. "CO2 is still relatively cheap in Texas compared to other states. We don't anticipate increasing prices due to any CO2 issues for now," Wim says.
That is good news for North Texans who want to keep filling their steins at an affordable price. Cheers.
