The coronavirus pandemic and the increasing popularity of hard seltzer have combined to create a shortage of aluminum cans. That may cause havoc to craft brewers and to consumers, too.
How’s that again?
Well, something like this. The pandemic closed bars and still keeps the crowds low, and that means drinkers who were once frequenting the bar down the street and having a few drafts from the tap are now buying their beer, in six or 12-packs, in stores instead.
Then there's the explosive growth of hard seltzer and canned wines and cocktails, with the taller, trimmer cans that somehow became the quickly established mode.
Those factors are causing an aluminum can shortage as can makers now serve a larger market.
And that hurts craft brewers, who don’t have the clout with can-makers like the big beer giants like Molson Coors and Anheuser-Busch do. Those beer mainstays actually own their own aluminum can plants, though they still buy from other vendors.
The impact prompted Evercore ISI analysts to suggest “rampant and unprecedented” can shortages in the beer, seltzer and wider beverage industry could lead to some empty shelves in the coming weeks.
“It’s something many of us who have worked in the beer industry for a long time have simply never seen,” said Brian Erhardt, chief supply chain officer at Molson Coors Beverage Co., quoted in Inside Beer, an industry website. He further noted that a couple months ago, packaged beer orders were coming in at Fourth of July levels, which for the beer industry is its Christmas day.
“There are not enough 12-ounce cans in the world to meet this level of demand -- for us, for our industry and for consumer packaged goods companies, in general,” Erhardt said.
Earlier this month, Molson Coors disclosed it was making a huge new investment in its Rocky Mountain Metal Container plant in Colorado so that by the end of the year, it will be manufacturing most of its seltzer-sized cans in-house. That will help the company produce enough cans to keep its new hard seltzer, Vizzy, on store shelves.
And recently, beer and other beverage makers have announced they’re cutting back on some of their slower-selling brands, in large part so they can use the aluminum can stock for better selling brands.
Ball Corp., one or the largest beverage container companies, has tapped its plants around the world to fill in the supply gap in the U.S., according to Brewbound, a beer industry website. It’s also building two new plants on each end of the country to fortify the 16 manufacturing sites it already has.