Denver Beer Co. co-founder: 'We can't make beer without CO2'

Denver Beer Co. Co-Founder Patrick Crawford joins Yahoo Finance Live to talk about CO2 shortages, sustainability, and beer distribution.

Video transcript

[AUDIO LOGO]

DAVE BRIGGS: All right, well, this may not be the news you want to hear late on a Friday afternoon, but a beer shortage may be right around the corner. Specifically, carbon dioxide in short supply related to a major supply contamination in Mississippi last year. So should we all stock up? Patrick Crawford is the co-founder of Denver Beer Company. He joins me from my hometown. Good to see you, Patrick. So I know you have not been impacted by the CO2 shortage, but how concerned should beer lovers be?

PATRICK CRAWFORD: I mean, we can't make beer without CO2. So it is one of our main ingredients, right after barley, water, and hops. And so, yeah, it can be a problem. If we can't get CO2, no beer.

SEANA SMITH: Well, you have protection because you actually have a CO2 capture program. Tell us about this, and I guess that's why you aren't that worried if you were potentially facing a shortage.

PATRICK CRAWFORD: Absolutely. One of the really cool things we do is we have a small CO2 capture made by [INAUDIBLE], and it captures the CO2 from fermentation. It's really funny, CO2 is a byproduct of our fermentation while we're making the beer. That gets released into the atmosphere. And then we capture that CO2 and then put it back into the beer at the end of the fermentation to top it off and make sure everyone's beer is nice and bubbly when they get it. So really cool new technology that small breweries can use for-- to capture their beer-- or to capture their extra CO2.

DAVE BRIGGS: And even more than that, we understand some cannabis companies have found a way to use that CO2 byproduct. Tell us about that. And could there be a collaboration down the road?

PATRICK CRAWFORD: Oh, absolutely, yeah. It takes carbon dioxide to grow plants, and we make more of it than we can use. So it's a great waste product. And if we can figure out how to capture it, package it, and sell it to the dispensaries or to the weed grow operations here in Colorado. And we did a trial with that. We ran it for about six months, and it worked great. And I'm really excited to be part of that project. So fun industry collaboration, for sure.

SEANA SMITH: Patrick, let's talk about what you're seeing in the beer industry more specifically when it comes to inflation, higher prices. How has that affected your business? And are you-- are you passing along some of that cost to the consumer?

PATRICK CRAWFORD: Yeah, absolutely. It's been a challenging year. The price of cans have gone up 15% to 20%. Our price of our barley just went up another 27% this year. So we have had to do a price increase to make sure that we protect our margins and we're still a profitable company. Cardboard prices gone up. Natural gas has gone up significantly too. So almost all of our inputs have gone up, and we have had to adjust price accordingly, for sure.

DAVE BRIGGS: And you guys are also all about sustainability there, 100% solar powered. I imagine sustainability and affordability often do not go hand in hand. How much does that increase the cost of doing business?

PATRICK CRAWFORD: Well, yeah, that's a really good question. That's one thing that I love about-- yeah, that picture of our solar panels on the roof, that's the building I'm sitting in right here. So up on our roof, we have enough solar panels to generate 100% of electricity we use for the year. And it's actually-- the payback is less than five-year payback for us with the federal tax credits and state tax credits in the Xcel Energy incentive program for doing it. So this has been a big win-win for us. It's-- financially, it's paid back in less than five years, and it's good for the environment. So we did get to check both those boxes. And it's a project that I'm really proud of and [INAUDIBLE].

SEANA SMITH: Patrick, you're in a very competitive industry, one with a lot of players. How are you kind of navigating that in terms of getting your-- getting the word out there about your brand, but also differentiating yourself from what's already on the market?

PATRICK CRAWFORD: Oh, man, that's a good question. We were just sitting in a marketing meeting trying to come up with our next year-round beer for next year, and it's tough. It's a challenging space. The marketing team has their work cut out for them. But especially with input costs going up for small breweries and the competitive nature, it is no short of challenging. So I'll let you know how we figure out how to do it, for sure.

DAVE BRIGGS: Yeah, I mean, there are more than 420 breweries in Colorado by my account, easily the most per capita. What makes Colorado such a brewery-friendly state?

PATRICK CRAWFORD: Oh, man, well, there's some great old-time craft brewers that have really paved the way in Colorado. But, you know, it's a great state for drinking beer outside. So we've got big beer gardens out here. And after you go for a nice long hike in the mountains, there's nothing better than drinking a pint of beer. So I'd attribute it to that, just, you know, Colorado, the Napa Valley of beer, for sure.

SEANA SMITH: Patrick, what about the nonalcoholic beer industry. It's certainly booming. 2024 expected to surpass $25 billion globally. I don't believe you're in this market yet. But would it make sense for you to potentially look into this down the road?

PATRICK CRAWFORD: Yeah, that's a great question. We were-- I mean, literally 20 minutes ago, we were just talking about that. It is growing. I think it's growing 20%, 30% a year, but it's on a tiny base. So I don't know. I think it makes sense for us to explore the category, for sure, whether it's a hot tea or some other nonalcoholic beverage like that, but-- or a nonalcoholic beer. But I think there's room in the market for NA, for sure.

DAVE BRIGGS: Or perhaps a cannabis beer. Just putting it out there, Patrick Crawford.

PATRICK CRAWFORD: There we go. No, I'll go talk to the state officials about that one. We'll get it figured out.

DAVE BRIGGS: All right, Patrick Crawford, Denver Beer Company. Good to see you, sir. Enjoy the weekend.