The Real Reason You're Seeing Fewer Breweries Around

There were more than 9,247 breweries operating in the U.S. in 2021, an increase of 2.5% over the previous year, according to the Brewer Association's National Beer Sales & Production Data. Meanwhile, U.S. beer volume sales inched up 1% and craft beer brewer volume sales jumped 8%.

However, cautions that when assessing this growth one must take into consideration the hit that the beer market took in 2020 during the height of the pandemic, and that the industry still hasn't returned to 2019 sales volume levels. Still, the beer market is amassing lofty numbers, reaching $100 billion in retail sales in 2021. Craft beer accounted for $26.8 billion of that figure.

Business publications including Forbes celebrated the 2021 Brewer Association data as a welcome sign that the beer industry appeared to be on the rebound, while also acknowledging that problems such as supply chain issues lingered. One such supply concern that first arose in 2020 has since only gotten worse and threatens the resilience of breweries as they attempt to recover from the fallout of Covid.

A serious carbon dioxide shortage

Another hurdle that breweries must now overcome involves the scarcity of a key component in the beer manufacturing industry: carbon dioxide. The CO2 shortage initially dates back to 2020, when it was linked to low demand for gasoline (CO2 is a byproduct of ethanol) via The Takeout. Supply chain issues have also been disrupting or delaying CO2 deliveries, leading to price increases for the gas, which adds carbonation to beer prior to packaging and is also used in protecting beer from oxidation during the production process, helping keep it fresh for distribution.

The problem has been compounded this summer by contamination of one of the nation's largest gas-producing hubs in Mississippi, during a time when demand for the gas is highest (via Washington Post). CO2 supplies had already been strained due to the pandemic's effect on major suppliers amid Covid closures. Now it's even leading to shutdowns and layoffs, including at Massachusetts-based craft brewery Night Shift Brewing (per NBC News).

The unpredictability of CO2 supply has created an atmosphere of uncertainty in the beer industry as brewers search for alternative solutions. One brewery, Off Color Brewing out of Chicago, is turning to nitrogen to offset dwindling CO2 deliveries. Others are considering ways to capture the CO2 released naturally during brewing's fermentation process. Brewers might have to get creative, or hop lovers may face a beer shortage this fall (via Forbes).