We have too much to drink and not enough cans to hold all of it
A nationwide shortage of cans is the latest threat to craft beer. Ball Corporation, the world’s largest manufacturer of cans, told investors last week the U.S. market alone is short 10 billion cans in 2020, according to Beer Business Daily, a trade publication.
When demand is this high for cans, only a few beverage producers get priority. The big guys (Pepsi, Coke, Anheuser-Busch, Miller-Coors) saw a shortage coming early on and began hedging their bets, shoring up contracts with canning giants but also negotiating contracts with smaller distributors.
“In times of shortage, there are no antitrust violations with privileging your largest customers first,” says Bart Watson, chief economist for the Brewers Association. “Most smaller brewers buy indirectly from brokers, and that means they are lower down on the list. It’s nothing nefarious, but it’s one of the challenges small companies face.”
DuClaw Brewing Company, a mid-sized brewery in Baltimore, has run out of cans every week since late July. They receive can shipments sporadically from their distributor, Gamer Packaging, said DuClaw’s logistics manager, Daniel Iman, and have been told there will not be a steady supply until next August.
Paula Gamer, president of Gamer Packaging, says the shortfall is national and adversely affects can manufacturers, distributors and brewers alike.
“We could sell 200 million more cans between now and the end of the year if we could get them,” Ms. Gamer says. “Unfortunately, we’re having to turn away new customers because we have to take care of existing customers first. And none of our manufacturers are taking new customers throughthe end of the year.”
Scott McCarty, director of strategic communications at Ball Beverage Packaging North and Central America, says the shortfall is a confluence of a number of trends. Hard seltzers experienced explosive growth as a category, specifically in cans. Soft drinks and still and sparkling waters have seen tremendous growth, too, he says, with marketers shifting their packaging mix toward cans and away from single-use plastics.
“The peak summer season, with a heat wave in much of the U.S., also contributed to that high demand. And COVID-19 added further to demand, as consumers bought more beverages in aluminum cans for home consumption,” Mr. McCarty added.
Ball has expanded domestic capacity by installing two new lines in existing facilities and building additional plants in Glendale, Ariz., and Pittston, Pa., that will provide at least 6 billion cans by the endof 2021.