In a move set to impact “thousands of customers,” American Canning today halted operations at its Aluminum Toyo Ultimate Can (aTULC) manufacturing plant in Texas, abruptly ending an innovative first-in-the-nation packaging partnership that had attracted significant interest from ready-to-drink cocktail and energy drink makers.
In a letter to customers seen by Brewbound’s sibling publication BevNET, American Canning co-founder and CEO David Racino wrote that Japanese manufacturer Toyo Seikan Group Holdings “has unexpectedly decided to no longer support the can plant project and terminated all agreements, forcing an immediate closure of the aTULC facility.”
“The abrupt nature of their decision has placed an undue burden on our ability to continue operations across all other verticals,” he continued. “Due to interdependence between business units, we are unable to sustain our supply distribution business, including web sales moving forward. In the immediate, we will continue to service our e-commerce customers via web orders as long as existing inventory allows.”
The announcement comes just over a week after Toyo Seikan publicly recognized the potential for “uncollectable or delinquent accounts receivable” from an unnamed customer to which it was selling aluminum can making equipment under a lease purchase agreement.
aTULC is a proprietary can developed by Toyo Seikan that uses a pre-coated aluminum sheet and liner that offers better shelf-life and resistance to corrosion over liners that are sprayed on as the cans are manufactured, according to promotional materials. Those properties have made it ideal for next-gen beverage alcohol brands such as canned wine and RTD cocktails, as well as THC-infused and functional drinks.
In February 2023, American Canning announced that it would open the first aTULC plant in the United States, starting with 12 oz. cans and later adding 16 oz. At the time, Racino, who started America Canning in 2012 as a manufacturer of canning machines, hailed aTULC’s arrival for allowing “craft producers to completely reimagine the types of products that can be packaged in cans.” On Toyo Seikan’s website, Recino calls aTULC “the best aluminum beverage can on the planet.”
According to a graphic on Toyo Seikan’s website, the Japanese company supplies American Canning with equipment and service (including installation and maintenance), material supplies (laminated aluminum coil) and technical support.
As a result of the partnership termination, American Canning is exiting the supply distribution business overall; the company will continue to make canning machinery, according to Racino’s letter. It is not yet clear if this will result in the loss of jobs at American Canning.
BevNET reached out to Racino and to Toyo Seikan representatives for comment; this story is developing.