Not everyone wants less CO2
One industry says it cannot get enough.
The bubbles in your beer come from CO2. Brewers also use the gas to move beer from tanks to kegs or canning lines and also between tanks. Or, as the head of the Brewers Association said, “Warm and flat is not where it’s at.”
Recently, craft brewers have been concerned with the CO2 shortages that Covid helped to cause. As frozen CO2, the dry ice used to preserve Covid vaccines gobbled up the supply. At the same time, driving fewer miles during lockdowns, we used less ethanol. Consequently, as an ethanol byproduct, CO2 was also down. Then, making it even worse, an extinct volcano (yes) in Mississippi contaminated another supply source.
And finally, to all of this, we can add a spike in beer consumption.
Our Bottom Line: Supply and Demand
As economists, asking why craft prices will probably continue rising, we just need to say, “supply and demand.” On the supply side, we have a beer determinant of supply, CO2, shifting the curve upward and to the left. But, at the same time, demand has traveled to the right. Alone each would increase the equilibrium price. Together we can expect them to have more of an impact.
My blue lines show the decrease in supply and the increase in demand:
To all of this we should add that the supply curve will not necessarily shift for the larger brewers that are able to capture some of the carbon dioxide created by their own fermentation and reuse it.