Not just hot air
The big headline dominating the industry this week is the shortage of food-grade carbon dioxide, but what is the reality behind the hype?
Firstly, what is it and what is it used for? CO₂ is widely used throughout the food and drink industry, used in a variety of ways from the packaging of fresh meat and salads to carbonating soft drinks, beers and cider and even in the slaughter of pigs and poultry.
So why the shortage? Put simply, CO₂ supply is always short during the summer when ammonia plants are often closed for maintenance. This year, more plants are closed than usual plus a number of bio-ethanol plants in Europe are also closed for maintenance, so CO₂ is in short supply. In the UK, there is only one CO₂ purifying plant currently in operation leading to the current crisis.
It’s no surprise, then, that this is being felt across the industry. The British Retail Consortium has written to major retailers to inform them that drinks and meat supplies could affected, and the wholesale sector is bracing itself to feel the impact.
“On behalf of the Department for Business, Energy and Industrial Strategy, we are collating wholesalers’ experiences of the shortage,” said James Bielby, Chief Executive, FWD. “Among the issues we are sending on to Government are concerns about the lack of dry ice for frozen food items during shipping, and products with CO₂ packaging.
“Members are also reporting that suppliers who are anticipating shortages of beer and carbonated drinks are rationing supply or even cancelling orders to meet their commitments to larger retailers. With the current hot weather and the World Cup going on, the impulse channel is an absolutely key route to market for these products and any supplier who reduces wholesalers’ allocation will miss out on one of the biggest sales boosts of the year.”
Wholesale News spoke to a number of wholesalers about their experience of the crisis so far:
“We’re not experiencing any supply problems at the moment but if this prolonged hot spell continues we expect there to be some issues, although we are keeping in close contact with suppliers in an attempt to keep any disruption of supply to a minimum,” said Craig Brown, Retail Sales Director, JW Filshill.
“Some suppliers have contacted us to indicate that there will be supply failure that will last in excess of a month, however others are relatively unaffected as they have their own captive sources of CO₂,” said Dawood Pervez, Trading Director, Bestway Wholesale. “Like all wholesalers, we will be watching the situation closely to ensure that we have continuity of stock across beers, ciders and soft drinks to protect availability for all customers, which may include issuing minimum quantity purchases on some affected lines. We will work with suppliers and keep all customers in the loop as the situation unfolds.”
“At this stage we are focusing on collecting information and sharing it with our members,” said Jim Brown, Senior Trading Controller, Landmark Wholesale. “We will take all necessary steps to work closely with suppliers to maximise availability and fight for our fair share. Some soft drink suppliers have acknowledged a significant impact and have ceased some production. As a result, some promotions have been pulled, but others, including the majority of brewers, are confident that they will maintain full supply.”
A statement from The British Soft Drinks Association (BSDA) said, “The shortage of CO₂ across Northern Europe is impacting a wide range of businesses across the food and drink sector. Soft drinks producers in the UK are taking active steps to maintain their service to customers including working with their suppliers to mitigate the impact as well as looking at alternative sources.”