Question

what are the impacts of carbon dioxide shortage on operation and supply chain of Coca Cola company? please elaborate this.

Answer 1

Before understanding the impacts of shortage of carbon dioxide on Coca Cola company, it is important to understand what is the use of carbon dioxide in food processing and drinks industries.

Carbon dioxide is produced as a byproduct of Ammonia production that is used to make fertilizer which is most in demand in winter and falls off in summer. Carbon dioxide has the ability to sublimate i.e to directly go from solid to gas form hence skipping the liquid phase and this is why it is known as a great refrigerant. It is used to provide the fizz in carbonated drinks. It is ideal for use in food and beverage because it is inexpensive, colorless and odorless. Now because it is widely used in carbonated drinks, shortage of carbon dioxide would affect deliveries of frozen food and drinks which is kept cool by dry ice made by compressing carbon dioxide. According to the bloomberg, coca cola's european operations had suspended temporarily because of acute shortage of carbon dioxide. Being an integral part of drinks industry, shortage of carbon dioxide would halt operations in short term and may interupt with production lines in longer terms if problem persists for longer period of time. It would cause huge financial losses for food industries as their business is 80% dependent on adequate and persistent supply of carbon dioxide.