Industry News

Supply Chain Updates – July 2022

Brewers Supply Chain Issues
Photo Courtesy of Brewers Association

The Brewers Association (BA) Supply Chain Subcommittee, part of the BA’s Technical Committee, is comprised of volunteer members who meet monthly to review the status of the brewing industry supply chain and to develop resources for brewers. These posts are intended to inform BA membership of the latest developments in the brewing supply chain.

Halfway through 2022, many of the supply chain pressures brewers faced over the last two years seem to be lessening, at least for the immediate future. Although the situation remains volatile, supply seems to be catching up with demand for many of the items needed to operate a brewery. That said, several key areas are worth mentioning or require immediate attention in this update.

CO2

The supply of CO2 has remained tight since the shortages in the Spring of 2020. Reduced deliveries and force majeures have remained common in various regions throughout the U.S. over the past two years. Currently, however, the availability of CO2 has turned critical in several areas. Peak summer demand for CO2 has coincided with both planned and unplanned maintenance shutdowns at several key ammonia plants who are major suppliers of food grade CO2. Even more problematic, a major natural source of CO2, the Jackson Dome area in Mississippi, is facing a contamination issue with the raw gas from the mine creating a significant decrease in available food grade CO2. This current shortage is most acute in the southeastern and central parts of the country.

The BA has resources that provide suggestions to navigating a shortage of CO2 and how to maximize a limited supply, such as Guidelines for Economical Use of Carbon Dioxide in the Brewery. In times of shortages, the quality characteristics of CO2 may vary with a change in the source. Understanding and Ensuring CO2 Supply Quality for Brewery Use helps brewers navigate the challenges that may come with changes in supply.

Barley and Malt

The global supply of barley malt remains challenging because of the continuing crisis in Ukraine and climate related challenges in many barley growing regions. In North America, spring brought some relief to drought-stricken areas, particularly North Dakota and eastern Montana. Rain in these areas and the eastern parts of Canada’s growing areas (that is, Manitoba) delayed planting. Western Montana, Saskatchewan, and Alberta remain dry. There is hope for a better harvest, in both quantity and quality, in 2022 when compared to the record low harvest of 2021. Acreage planted in barley in 2022 has increased by 15% over 2021 according to the June 30 report from the United States Department of Agriculture (USDA) National Agricultural Statistical Services (NASS).

Hops

For the first time in several years, the number of acres strung with hops declined. According to USDA NASS, the hop acreage strung for harvest in 2022 was down 2% from the record high of 60,872 acers in 2021. Acres were down 3% in Washington and Idaho, but up 9% in Oregon. The full report, including variety breakouts, can be viewed on the NASS website. Hop stocks on hand with dealers have risen dramatically over the past few years, which is the likely cause of the decrease in acres strung for harvest.

Packaging

Printed can supplies continue to be strained due to recent events. The Collab Hour, Navigating Can Packaging in 2022 (and Beyond), discusses how to best navigate the ever-changing supply chain for can packaging so brewers are better equipped to navigate the year with certainty.

Shipping

Trucker shortages are impacting shipment fees and timelines for the brewing industry.



Beer CPA – “We Give Craft Breweries More Freedom and Peace of Mind”
A Craft Brewery CPA Firm that’s Tech Savvy, Responsive, and Business Smart.

Craft Brewery CPA Blog

facebook twlinkedin

Photo Credit: Brewers Association

Article Retrieved from Brewers Association, written By Supply Chain Subcommittee.