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What the CO2 Shortage Means for Beer, Hard Seltzer and Other Drinks

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Over the summer of 2022, Night Shift, a large Massachusetts brewery, shocked drinkers and the larger craft beer industry when it abruptly announced that it would cease brewing at its flagship location and begin using a contract partner to fulfill orders.

There were several reasons for the change, including the lingering effects of Covid-19 on the marketplace and a can shortage. But chief among the issues was losing access to a supply of carbon dioxide (CO2), a gas critical for beer production.

“Last week, we learned that our CO2 supply has been cut for the foreseeable future, possibly more than a year until we get more,” the brewery wrote in an Instagram post. “Breweries depend on CO2 to make beer, so this was pretty awful news to get. Seems like this will be an issue that impacts a lot of local breweries, so we’re probably one of many breweries facing this new threat to our business.”

That statement has rung true for a growing number of the country’s more than 9,000 breweries as well as other beverage companies, including, wine, hard seltzer and ready-to-drink (RTD) producers, which rely on copious amounts of CO2 to get products to the market.

“​If breweries cannot get beverage-grade CO2 for brewery use, the brewery may need to cease production,” says Keith Lemcke, an instructor and marketing manager at the Siebel Institute of Technology in Chicago.

Why Is There a CO2 Shortage?

The CO2 shortage can be traced back to supply issues that began near the start of the Covid-19 pandemic, coupled with an increased need for the gas across multiple industries like cannabis and vaccines, according to Amy George, president of Earthly Labs, a company that helps businesses capture and utilize CO2.

In the beverage space alone, increased production of relatively new categories like hard seltzer and ready-to-drink cocktails have added to the squeeze.

Monitors of the industry, like George, say there is not much relief in sight.

Why Is CO2 So Important?

It is an important component in beer “from a stylistic standpoint,” says Lemcke. In the finished product it is most apparent in the form of carbonation. The prickly bubbles that arrive on the tongue are the result of CO2 being forced into liquid.

While carbonation is a natural byproduct of fermentation, it rarely creates the robust level that drinkers are accustomed to for lagers, ales, flavored hard seltzers and Champagne.

The gas is also critically important in beverage manufacturing, as it keeps oxygen out of the process, which can introduce off flavors, especially to beer. 

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