Coca-Cola CO₂ Supply Hitch
Imagine running out of something that is literally everywhere. That was the situation the largest beverage company found itself in 2018. Coca-Cola’s CO₂ supply hitch was a crisis that occurred because the supply chain did not address potential supply risk effectively.
But despite the challenge for the company, there are tangible lessons for supply chains across the globe, even here in Africa.
Key Nuggets:
- The 2018 CO₂ shortage exposed hidden risks in food and beverage supply chains.
- Coca-Cola paused some bottling lines but avoided empty shelves by prioritizing products, using inventory, and sourcing alternatives.
- Lessons include mapping weak links, aligning supply with demand, diversifying suppliers, improving coordination, and investing in resilience.
- African supply chains can apply these principles to build stronger responses to future disruptions.
Do you want more supply chain stories like this? Subscribe here
Why a CO₂ Shortage Shocked Europe
Coca-Cola’s CO₂ supply hitch challenged a long-held assumption among logistics professionals and leaders – that widely available inputs like carbon dioxide would never run short. Yet in 2018, Europe faced its worst CO₂ supply squeeze in decades.
The shortage began when multiple ammonia and bioethanol plants, which produce CO₂ as a by-product, went offline for summer maintenance. Coincidentally, multiple plants went offline for maintenance.
There is nothing wrong with maintenance, and it is often encouraged. But it was the wrong time. As you can expect, during the summer, the demand for fizzy drinks soared. A heatwave across Europe and the FIFA World Cup drove record sales of beer and soda.
In the UK, the situation was particularly dire because the country relied heavily on imports and only one domestic plant was still producing. This misalignment of supply and demand created an immediate bottleneck.
And the result was a continental supply chain crunch for CO₂, described by industry journal Gas World as “the worst supply situation to hit the European CO₂ business in decades.” The entire situation revealed how dependent the beverage industry was on a single industrial chain.
Read More: Lessons From Toyota’s Just-In-Time Revamp.
Coca-Cola’s Challenges in Securing CO₂
Coca-Cola faced the same constraints as brewers and food processors across the continent. Its European bottling partner admitted that some bottling lines had to pause because of the shortage.
That decision reflected the difficulty of sourcing enough food-grade CO₂ to meet production schedules.
The pressure from Coca-Cola’s CO₂ supply hitch was threefold:
- Limited access to CO₂: With many suppliers offline, contracts could not guarantee full supply.
- Prioritization pressure: Decisions had to be made about which drinks to produce and which to delay.
- Uncertainty: The uncertainty about when ammonia plants would restart made planning more challenging.
Coca-Cola’s supply chain could not rely on steady deliveries, so it had to adjust production in real time to keep distribution flowing.
The Wider Impact of The CO₂ Shortage Across the Food and Beverage Supply Chain
Coca-Cola was not alone. The ripple effect of the CO₂ Shortage was far-reaching across various companies within the food and industry.
For example, brewers like Heineken warned of beer shortages, and UK wholesaler Booker rationed soft drinks and alcohol to ten cases per customer. Some pub chains even ran out of draught beer.
The shortage also spilled into meat and poultry processing, where CO₂ is used to stun animals and keep food chilled. Scotland’s largest pig abattoir was forced to shut temporarily, and poultry plants scrambled to adopt emergency measures such as electrical stunning.
Even online grocery deliveries were disrupted because dry ice, a solid form of CO₂ necessary for shipping frozen foods, was scarce. The situation wasn’t just an isolated or a narrow industry issue but a cross-sector supply chain shock.
However, there are lessons to learn from how Coca-Cola’s supply chain reacted.
Read More: How Tesla Navigated The Model 3’s Production Bottleneck in 2017 & 2018.
How Coca-Cola’s Supply Chain Reacted
Coca-Cola’s handling of the 2018 CO₂ shortage across Europe has gone on to become a case study in supply chain resilience.
Coca-Cola weathered the CO₂ supply hitch with little reputational or financial damage. And according to a company spokesperson, while some bottling lines were paused, there was “no disruption to supply” for consumers.
Orders continued to be fulfilled in full because the supply chain’s response was measured and effective.
But to pull this off, Coca-Cola relied on a combination of smart supply chain and business strategies:
- Prioritization: Coca-Cola focused on high-demand and core products while scaling back less critical SKUs.
- Inventory Reliance: Drew down CO₂ that had been stored in onsite tanks and relied on finished goods inventory already in warehouses to keep deliveries flowing to retailers.
- Supplier collaboration: Worked with gas suppliers to source from alternative plants in other regions.
- Clear communication: Reassured partners and customers that solutions were in place.
By spreading its risk and using reserves, Coca-Cola’s supply chain was able to sustain the planned sales volume while also avoiding the visible shortages that hurt some of its competitors.
For instance, Britvic, the UK producer of Pepsi, later revealed it missed out on potential sales during the heatwave because the CO₂ shortage limited its output.
Read More: Supply Chain Lessons From GM’s 40 Day Labor Strike in 2019.
Lessons From Coca-Cola’s CO₂ Supply Hitch
Coca-Cola’s CO₂ supply hitch and how the supply chain managed the situation hold tangible supplier management lessons:
1. Map and Monitor Weak Links
Businesses must understand where the unwanted dependencies are. Although the CO₂ supply was mostly from fertilizer plants, beverage companies had little visibility of this risk. Supply chain mapping could have discovered the vulnerability earlier.
2. Align Supply With Demand Drivers
The supply shortage happened because fertilizer plants cut production in the summer, while beverage demand surged.
This misalignment between vendors and various food and beverage supply chains proves the need for monitoring upstream drivers and anticipating clashes with downstream peaks.
3. Diversify and Build Contingency
Coca-Cola’s supply chain was able to withstand the CO₂ shortage mainly because it was able to source from alternative suppliers and tapped into its CO₂ reserves. Diversified contracts and safety stock are proven safeguards for supply chains.
4. Improve Coordination and Transparency
Lack of real-time visibility into CO₂ vendors and ammonia plants created uncertainty. Stronger information-sharing across industries and with governments can reduce surprises during future shocks.
5. Invest in Long-Term Resilience
Experts warned against dismissing the shortage as a “perfect storm.” Smaller CO₂ shortages had happened before and could happen again. Therefore, it is vital for more supply chains to explore on-site CO₂ capture, redundancy in supply, and scenario planning to cut dependency.
Do you want more supply chain stories like this? Subscribe here
How African Supply Chains Can Apply These Lessons
African food and beverage supply chains share many of the same risks that Europe faced in 2018 with the CO₂ shortage. For example, seasonal demand spikes during harvests or festive periods often clash with fragile supply networks.
And a heavy reliance on imports for key inputs like fuel, packaging, and food gases can also compound these vulnerabilities.
Applying the lessons from Coca-Cola’s CO₂ supply hitch will mean the following for supply chains across Africa:
- Supplier diversification: More than ever, it is critical to avoid total dependency on one importer, one plant, or one supplier. You can spread your risks with multiple sourcing..
- Local production and storage: Build domestic capacity where possible and expand storage whenever you can to cushion disruptions, especially those that are avoidable.
- Cross-industry collaboration: Just as CO₂ was shared across the food and beverage industries, African industries can coordinate to allocate scarce resources during shortages.
- Monitoring critical inputs: Governments and trade bodies should track the supply of essentials such as fuel, packaging, and CO₂, and step in with contingency plans when shortages loom.
If supply chains can do this, the strategic payoff is resilience.
Companies across the continent that prepare can keep goods flowing when disruptions strike. Those that don’t risk losing consumer trust and market share overnight.
Do you want more supply chain stories like this? Subscribe here
Wrap Up
Coca-Cola’s CO₂ supply hitch of 2018 was a warning shot to global supply chains. A gas, assumed to be abundant, became the single point of failure across multiple industries.
Coca-Cola avoided disaster by prioritizing production, using reserves, and working closely with suppliers. But for logistics professionals, the lesson is clear: resilience must be designed into supply chains before a crisis, not during it.
For African businesses, adopting these supplier management strategies today can prevent tomorrow’s shortages from becoming crises.
Obinabo Tochukwu Tabansi is a supply chain digital writer (Content writer & Ghostwriter) helping professionals and business owners across Africa learn from real-world supply chain wins and setbacks and apply proven strategies to their own operations. He also crafts social content for logistics and supply chain companies, turning their solutions and insights into engaging posts that drive visibility and trust.
