Why a Beer Shortage Is Brewing in the U.S.

Beer and meat lovers might have a difficult time getting their favorite products this fall. That’s because there’s a shortage of carbon dioxide (CO2) in the U.S., leading to complications at a number of breweries and food suppliers across the country.

Food and beverage companies, such as Tyson and Kraft Heinz, have been scrambling to find suppliers of the gas, which is used for putting fizz into drinks and freezing frozen meats and pizzas. Some local breweries have even had to suspend operations at their facilities because of the shortage—that could mean fewer jobs and higher beer prices.

A number of factors have led to the current situation, but maintenance shutdowns of CO2 plants and general summer demand for drinks are the most likely culprit, according to the Brewers Association, a U.S. trade group.

“While many of the specific issues in the market are new, CO2 has experienced various supply chain challenges since the beginning of the pandemic,” the Brewers Association said in a statement. “This is one of many areas where small brewers are facing cost increases and availability issues.”

Some analysts have also attributed the current tightness in part to contamination at the Jackson Dome carbon dioxide well, an extinct volcano in Mississippi, earlier this summer. Denbury Energy, the owner of the site, attempted to drill new CO2 wells to fill its industrial contracts, but the CO2 reportedly contained contaminants, according to Gasworld.

Denbury said the contamination was a “minor issue” in a statement to TIME.

“The CO2 produced at Jackson Dome has been and is being produced within all regulatory requirements, and the composition of the delivered CO2 continues to meet contractual specifications,” it said.

“We have been working with certain of our customers, such as food and beverage grade requirements, to address processing issues that existed in their distribution chains. Our customers are receiving all of the CO2 they are requesting.”

Driver shortages are further jamming up the supply of the gas, the Brewers Association says, particularly with local delivery. Many of the sourcing challenges, it says, are worse in the southeast, but reports of CO2 shortages and quality issues have been reported all across the U.S. since the middle of the summer.

The Compressed Gas Association, another industry trade group in the U.S., does not expect to see any relief until at least October, when scheduled maintenance at CO2 industrial facilities are expected to be completed.

The beer industry has been hit particularly hard by the shortage, forcing some smaller breweries to consider raising their prices to offset rising costs and remain in business. Some are even experimenting with CO2 alternatives, such as nitrogen.

“We’re using CO2 constantly,” Bryan Van Den Oever, owner of the Red Bear Brewing Company in Washington, D.C., tells TIME. “Our supplier let us know that they weren’t taking on any new clients…but at some point they may come to us to say they can’t meet our needs, which is worrying because beer is our main product.”

“There was a surcharge for all CO2 that our supplier just sent to us recently,” he added.

When Night Shift Brewing in Everett, Mass. learned that its CO2 supply had been cut for the foreseeable future, twelve employees were told their jobs may be cut as the brewery moved its production to a different source. “Our plan had been to continue problem solving, but this latest CO2 issue has basically thrown a huge wrench into any of those plans—threatening even immediate production,” Night Shift Brewing wrote in a statement posted on Facebook in July.

For craft breweries, extra CO2 is often added to beer during the fermentation process, in the tap room for pushing beer through the lines to glasses, and when putting beer into cans. Van Den Oever says that if the shortage worsens, his brewing company might have to use nitrogen in the fermentation tank instead of CO2, though that’s a worst-case scenario. Nitro beer often has less carbonation, giving it a more smooth and creamy texture, meaning IPAs and pilsners might have different flavors.

Some larger breweries are able to capture the CO2 from their beer production and reuse it, but that’s not an option for smaller brewing companies since the equipment is expensive and can take up lots of space.

The CO2 shortage isn’t just impacting the beer industry: The gas is commonly used in almost everything we consume. Beyond creating the fizz in drinks, it helps rapidly chill food that will be frozen. Carbon dioxide is even used to make dry ice and can be used for humanely slaughtering animals.

Fresh meat could also be in shorter supply at local grocery stores. The Wall Street Journal reported that Tyson and Butterball were among the companies affected by CO2 shortages. Cold cuts, which are preserved with CO2 and other gasses, could also take a hit. Modified atmospheric packaging takes out the oxygen and pumps in CO2 to give products a longer shelf life, but companies like Kraft Heinz have warned retailers of a potential shortage of turkey and bologna due to the shortage. Kraft Heinz did not respond to a request for comment.

Frozen foods, such as vegetables and pizzas, also use CO2 for enhanced freezing and preservation to prevent bacteria growth.

For producers unable to find alternative sources, the next few months could be difficult. “We’re hoping the shortage is going to resolve but it doesn’t sound like that’s going to happen at least through the fall,” Van Den Oever says. “So this is just an ongoing thing that we’re going to deal with.”

Write to Nik Popli at [email protected].