Globally, the last three years have been challenging, to say the least. With a global pandemic, economic inflation, and civil unrest, industries are fighting to stay above ground with supply limitations and production disruptions. The beer industry is not exempt and the ongoing war between Russia and Ukraine has had a significant impact on the production and the price of beer.
Wheat, Barley & War
Russia and Ukraine together supply more than a quarter of the world’s wheat. The war has affected distribution around the world as these 2 countries are major exporters of wheat. There are places where this kind of disruption could totally destabilize their supply and many of those countries, especially poorer countries that depend heavily on wheat, will have to look to other exporters or seek humanitarian aid.
In countries like Egypt and Lebanon where 70 percent of wheat is imported from Russia, the worldwide disruption of wheat is bound to have a devastating ripple effect. In the other countries where most of the food supply is made from wheat and barley, extended disruption will leave many totally helpless.
War In Ukraine Impacts Beer Prices In The U.S.
The United States is not exempt from the impact of increased production costs on the prices of beer. Although wheat and barley are key ingredients, many of the other materials needed to produce and distribute beer have also increased. The aluminum for the cans, the steel for kegs, and the cost of shipping and transporting the products have all increased. The supply and demand chains that once made the process affordable have created opportunities for industrial producers to take advantage of rising costs caused by inflation.
According to Fortune Magazine, Heineken’s CFO said “because of inflation, they are going to raise prices by ‘courageous’ amounts to offset the supply chain challenges brought on by the pandemic.” This move means industry leaders are focused on preserving their bottom line by allowing consumers to absorb the inflation costs. For foodservice owners and operators, this means being strategic with resources and intentional with an already limited supply.
Beer Math Can Help
As restaurant and bar operators across the country try to create a new normal reopening for consumers, there are ways to overcome the many challenges when it comes to draft beer. There are so many factors that now come into play when purchasing inventory, and using beer math can help establishments determine how many kegs to purchase, ultimately saving them money.
A standard keg in the US holds roughly 15.5 U.S. gallons. Keeping up with the various ways to identify them can be difficult. Using our Beer Math Formula, time spent in the walk-in cooler can be reduced by up to 40 percent simply by implementing a sizing technique that factors in diameter, height, and direct draw for equipment. By taking that information, along with the number of taps on hand, we can show how much of each brand of beer is being served per week. Helping make sure the right brews are being stocked and inventory is always correct.
Considering the scarcity and increased pricing, the goal is to remain profitable. Beer Math helps understand the needs of the establishment to influence better business decisions and help increase beverage profits. Knowing facts like what beer sells regularly, how many gallons a specific keg holds, or how much space is required to store them can be the difference between an increase in profit and less spending overall. Letting management make informed business decisions and stay ahead of the establishment's needs, despite inflation and increased production costs.