Beer Production hit by Shortage of CO2

Media reports yesterday highlighted a “perfect storm” for UK producers of beer (and soft drinks); where high demand due to the good weather and the World Cup has coincided with a significant fall in production of CO2.  Whilst this is a problem across Europe, the loss of production is particularly acute in the UK where 3 of the 4 largest plants are currently shut.  It is anticipated that consumers will start to feel the impact within days.  Understandably, people are asking how could this happen.

“Supply Chain Continuity” has been a hot topic within business continuity management for many years now; and much good practice has emerged around getting to know and understand your supplier base, and contingency planning for failure of individual critical suppliers within it.  However, the current shortage of CO2 is an example of a growing problem where there is disruption to supply of a key raw material across an entire industry.  (In fact the shortage of CO2 affects multiple industries including food production and aviation).  This is clearly a more difficult problem to resolve – one doesn’t simply want to resort to costly and inefficient stock-piling of raw materials just in case.

What’s the answer then?  There is no simple solution if you happen to be a beer producer although, in this particular scenario, it might have been worth building a closer relationship with your CO2 suppliers to ensure that they don’t all shut down simultaneously.  For retailers though, the solution lies in a flexible business model: if you cannot replenish stocks of beer for a period of time what else can you sell instead?  As ever in these situations, a challenge for the beer industry represents a big opportunity for somebody else!

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