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The global supply chain crisis and its impact on the alcohol industry

The current challenge

Lockdowns slowing global trade, tensions between China and the US, and the lack of manpower due to the pandemic and unemployment benefits, have all put pressure on product inventories around the world.

In many cases, it's not the alcohol itself that is hard to find, but rather the materials needed for packaging. The amount of glass and aluminum needed to meet the rising demand for beverage consumption is becoming harder and harder to come by, and many large companies are stocking up to make sure they don't run out in the future.

Trucking costs have also skyrocketed as a result of higher driver wages and the nearly 41% rise in fuel costs since September of 2020. Overseas shipping rates have increased 4x.

What does the future have in store?

No one can know for sure, but being able to adapt is key to stay afloat.

Many new and creative directions such as smaller sizes cans in the RTD market are being implemented - half the can, half the raw materials. A greater marketing focus to target the local consumer could help the business of small breweries and distilleries by avoiding the extreme spike in freight and distribution prices. And, this could be an opportunity to invest in the research and development of alternative packaging processes and materials.

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