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“Can manufacturers are reported to be operating at capacity with no quick or easy way to increase production” – Brewers Association
It’s been a perfect storm of circumstances. But thanks to a worldwide pandemic there’s been a run on aluminum cans that may further challenge American craft breweries already in survival mode.
Here’s the deal….
The coronavirus has led to bar, taproom and restaurant shutdowns in the US, effectively putting the brakes on kegged beer sales and sending canned beer sales through the roof, as consumers stocked their pantries to wait out the pandemic.
Almost overnight kegged beer destined for restaurants and bars was diverted to cans for consumers now sheltering-in-place and brewery can supplies were decimated by the unexpected transition.
And although we’ve been warning of aluminum can shortages for a while now, things have escalated and the BA has issued a can shortage advisory that the Brewers Association warns “may threaten the ability to survive the pandemic for some craft brewers.”
This from the Brewers Association….
The last several years have seen a dramatic shift to aluminum cans as the preferred package for craft beers. Early data shows that in 2020 aluminum cans have become the majority package of choice for craft brewers. The shift in consumer and producer preference to aluminum cans has not been limited to beer. Soft drinks, seltzers, waters, coffees, kombuchas, energy drinks, and other segments of the beverage industry have also seen a shift to cans as the preferred packaging type. Canned wines and cocktails are further competitors for cans.
- The shift to off-premise sales due to the pandemic has increased demand for packaged beverage alcohol and non-alcohol beverages.
- All can sizes have had periods of shortage—16 ounce, 12 ounce, slim 12 ounce, and crowlers at various levels at various times.
- In beer, even large companies are seeing can shortage issues that are resulting in out-of-stock conditions.
Can manufacturers are reported to be operating at capacity with no quick or easy way to increase production. More can manufacturing capacity is due to come online by the end of 2021, but demand is likely to continue to outpace supply through next year or possibly longer.
Manufacturers generally are not obligated to supply specific customers unless they are contractually bound to do so. The information known to us suggests that the present shortage arises from market forces and the pandemic, but we invite members to contact the Brewers Association in confidence if they have evidence showing anti-competitive activity.
The can shortage may threaten the ability to survive the pandemic for some craft brewers. The smallest brewers are most likely to have orders delayed or canceled, as can manufacturers are more efficient when they don’t have to change out the printing plates as often. A company ordering a half or full truckload may be less of a priority.
The can shortage appears to be a medium- to long-term issue. Brewers are advised to carefully monitor inventory levels and lead times and clearly communicate their needs to their suppliers. Shifting available resources to major brands can be a viable strategy. Secondary brands are being pared down by the major soft drink manufacturers and larger brewers in order to conserve cans for larger volume labels. Brewers may also want to consider evaluating other types of packaging as a means of continuing to meet customer demand for their beverages.
