Gas guzzling
Aotearoa is halfway through ‘‘Dry July’’, a fundraising event that challenges people to go alcohol-free for a month and raise funds for New Zealanders affected by cancer. It’s been a cracking success.
Now in its 10th year, the campaign has inspired 54,000 Kiwis to take part, raising $7.8 million and funding more than 170 projects for 15 beneficiary organisations across the country.
More broadly, Dry July lines up with the global trend of healthy drinking, which has seen increasing vigilance around the constituents in alcoholic beverages, the social good of the makers and, of course, the alcohol content.
A recent report by beverage research house IWSR predicts global annual growth of 8.8% for nonalcoholic beer and 13.5% for nonalcoholic wine for the 2022-23 year.
Wearing my Garage Project hat, I can tell you that we’re feeling the same trend here in Aotearoa. Despite our fulsome lineup of hopheavy hazies and IPAs, our biggestselling six-packs are the low-alcohol Fugazi and the no-alcohol Tiny.
It’s just not us. Walk into any bottle store these days and you’ll see a burgeoning selection of booze that’s got less carbs, less alcohol and, hopefully, more social licence.
Our biggest problem with beers like Tiny at the moment is that it’s hard to keep up with demand. It flies off the shelf, we just can’t fill the shelves fast enough.
No, that’s not a logistics problem. Neither is it an ingredients or water problem. It’s a gas problem. Specifically, carbon dioxide (CO2).
Virtually all beer needs CO2 to be added at the end of the brewing process to contribute to sensory outcomes, foam level and shelf life.
Above and beyond that, foodgrade CO2 is used to clean purge tanks through the beer-making process. And just in case you didn’t know it, New Zealand is currently suffering a bit of a CO2 crisis.
Up until March this year, most local industries who needed CO
2 (including hospitality, food processing, carbonated drinks and breweries) used gas produced at the Marsden Point oil refinery. Marsden Point delivered about 70% of the country’s food-grade CO2, and Kapuni supplied the remainder.
But in April, the refinery was closed down as its owners changed business models.
That left tens of thousands of local businesses dependent on Todd Energy’s Kapuni gas field in Taranaki for their CO2, or facing the very expensive option of importing it from Malaysia.
Almost immediately, bulk gas supply companies like BOC and Air Liquide were forced to put in place rationing to try to protect their customers. Then it got worse.
The increased reliance on Kapuni coincided with a long-term plan by its owners to do maintenance on the plant over the winter, which further throttled production.
In simple terms then, local businesses are now able to access less than half the food-grade CO2 they used to, and at over twice the price of a few years ago, and virtually all of it originates from a single, throttled-back plant. No surprise that businesses are hurting.
In our case, it’s directly affecting the amount of beer we can put on shelves in bars, cafes and bottle stores. And if it’s hard for us with 10 years of goodwill and a bit of scale, you can bet it’s even harder for a good whack of the other 250+ craft breweries in Aotearoa. But it’s not just beer.
Poultry food company Tegel has warned it may not be able to produce multiple food lines.
Meanwhile cheese, preserved meats, sparkling wine and ready to eat meals are also affected, according to the Food & Grocery Council, and it has flagged possible price rises, as have local lamb companies.
Longer-term, there’s got to be a better technical solution. Shorterterm, it’s all going to come down to three factors.
Firstly, how long it will take Kapuni to return to full CO2 production – and if they will be able to match the previous production and pricing of Marsden Point.
Secondly, the ability to be able to source and secure food-quality CO2 from overseas at sustainable pricing. Currently it comes in fits and starts, with no security of supply.
Thirdly, the size of the ‘‘float’’ of stored bulk gas currently on the books of the bulk companies like Air Liquide and BOC, and cylinder supply companies like Ezigas and Core Gas.
None of these answers are known right now, but one thing is clear, which is that getting Kapuni back to full production in five weeks’ time won’t solve the problem.
What this means for beer drinkers is a voluntary dry July could extend into an involuntary dry August and even September as the market finds a new equilibrium.
That, and a set of price rises for everything from lager to lamb chops and chicken legs.
Not something I’d like to drink to.