KNOXVILLE, Tenn. — The price of beer could soon be on the rise in Knoxville because of the war in Ukraine after breweries already had to find ways to manage separate supply chain issues and inflation.
According to the U.S. Department of Agriculture (USDA), the country was one of the world's top five suppliers of barley in 2021. Now, the Russian invasion has pushed the costs way up. Owners of some breweries said they are working to avoid having to pass the higher costs onto customers, but said they need to raise prices soon.
Local brewers that survived the pandemic like Hexagon Brewing Company said are facing new challenges to staying afloat.
"I mean, just today I called to place an order for hops and other ingredients and they're getting tougher and tougher to get," Owner Stephen Apking said. "We'll be going up on prices both wholesale and retail starting April 1. We're already planning for."
Owner of the downtown brewery Crafty Bastard, Aaron Mcclain said they get their barley from Canada but also said he sees how the war in Ukraine could further disrupt supply chains — when more breweries will likely be competing for ingredients out of Canada.
"Things I counted on being there all the time show up now 70% of the time," Aaron Mcclain said.
While the price of ingredients rises, so too are prices for cans for beer. Mcclain explained aluminum costs are skyrocketing. He said it's about 50 cents higher per can, which can add up significantly when supplying canned beers to local businesses and restaurants.
McClain said he was shocked to actually receive a pallet of aluminum cans after ordering it, expecting to have to wait for it to ship. They order 5,000 cans at a time.
Both businesses are trying to keep prices flat but said fear they may have to eventually pass along rising costs to customers. Owners said they are holding off on increasing prices at the tap until it becomes absolutely necessary.
Many small craft brewers say doing home deliveries helped them survive the pandemic.
Mass producers including Heinikin also beer prices could go up because of cost increases. Heineken has said beer prices will go up as it faces “crazy increases” in the cost of ingredients, energy and transport.
The brewer said inflation was “off the charts” and its costs would increase by about 15%, so they said they would charge more. They also said the higher costs could lead to lower beer consumption.