BA: Cans Remain Preferred Package for Craft Brewers Amid Global Shortage
Cans reached their highest-ever share of Brewers Association-defined (BA) packaged craft beer sold at off-premise retailers in 2021, according to a report from chief economist Bart Watson.
Watson shared that craft cans claimed a 60% share of packaged beer sold at total U.S. multi-outlet food, convenience and liquor stores tracked by market research firm IRI during the second four-week period of 2021 and remained at or above that level until the ninth four-week period.
Craft’s share of cans was higher for all of 2021 than it was in any of the preceding three years, a pattern in place since 2018. Each year, cans take more share of packaged BA-defined craft from bottles, but their growth has been decelerating. In 2019, cans’ share growth hovered between 9% and 8%. Its highest point in 2020 was just below 8% and its lowest was slightly less than 6%. But in 2021, cans’ share growth in packaged craft beer peaked at slightly higher than 6% in the third four-week period of the year and dropped as low as 3% in the 12th four-week period.
“Can share within craft is starting to catch up to the levels seen in the overall beer market,” Watson wrote. “Whereas there was a 25 point gap between BA craft can share and overall beer can share in 2018 (roughly 41 share versus 66 share), in 2021 that gap was down to 11 points (60 share versus 71 share).”
The deceleration in cans’ growth is concurrent with a global can shortage affecting all beverage industries. Leaders of Ball Corporation, the world’s largest manufacturer of aluminum beverage cans, said the company is oversold for 2022 and 95% of its inventory for 2023 “is accounted for,” during its Q4 earnings call. Watson pointed to tight supply as another reason behind share growth deceleration.
“It’s quite plausible that craft can share could have closed that gap more were brewers not facing allocations on how many cans they could buy,” he wrote. “While it’s tough to quantify unfulfilled demand, which may have existed in bottles for some brewers as well, supplies remain tighter in cans than in bottles (though both are tight).”
The slow return of draft beer following the lifting of pandemic restrictions in the on-premise channel pushed many brewers to cans in place of kegs and bottles, but non-alcoholic beverage makers have been opting for them over other package options as well.
“Ball shared recently that non-alcoholic beverage demand is currently the primary driver of their aluminum can growth in North America,” Watson noted.
In the broader beer category, about half of the growth of cans is due to hard seltzer, which is sold nearly exclusively in cans, Watson wrote. That segment’s once-meteoric growth has begun to slow.
With 43.5% of all BA-defined packaged craft beer, 6-packs of 12 oz. cans or bottles remained the preferred package format in 2021, but they have lost share from 2020 (45.2%) and 2019 (47.5%). Of the five package formats that account for 90% of total BA-defined craft volume in scan data, 6-packs lost the most share in 2021, while 12-packs of 12 oz. cans or bottles gained the most, increasing +0.4% to 33.1%.
The third-most popular package format, 24-packs of 12 oz. cans or bottles, was the only other format in the top five to lose share, declining -0.1%, to 5.7% of BA-defined craft scan data volume. Four-packs of 16 oz. cans gained +0.2% in share, accounting for 6% of all sales. Six-packs of 16 oz. cans or bottles gained +0.1% in share, accounting for 2.1%.
Can 12-packs gained more share than most package formats, increasing +2.3% from 2020, which brought a +2.7% gain over 2019. Watson noted that 12-packs “held up their share gains remarkably well.”
“Within packaged sales, the steadily increasing share shift to cans has slowed, and that slowdown is also likely to continue,” he concluded. “Whether that represents an opportunity for bottles to start winning back share or simply to hold share better than they have in recent years remains to be seen.”
Beer Institute: Voters Support Repeal of Aluminum and Steel Tariffs
The majority (55%) of voters in six states said they support the repeal of the Section 232 aluminum and steel tariffs, according to a survey commissioned by the Beer Institute (BI) and conducted by Bully Pulpit Interactive.
“As U.S. inflation hits record highs, American voters are making it clear that policies that increase the cost of goods – like the tariffs on aluminum and steel – are unpopular,” BI president and CEO Jim McGreevy said in a press release.
The survey – conducted among legal-drinking-age registered voters in Arizona, Nevada, New Hampshire, Georgia, Wisconsin and North Carolina – found that 55% of respondents identified the cost of living as a top concern; 86% of them said the cost of living “is headed in the wrong direction.”
Nearly 80% cited increasing prices as the biggest economic issue in the U.S. and more than three-quarters (77%) are concerned about “affording food for their families.” As a result, nearly one-third will be adjusting their plans to watch the Super Bowl this weekend, including spending less on food and drinks.
“In sum, the January survey reveals that voters’ significant economic anxieties tied to inflation translates to more support for repealing tariffs,” the BI wrote. “As prices continue to rise, the issue of tariffs has the potential to be a potent political argument for 2022 battleground candidates.”
In November, the U.S. and European Union struck a deal to lift some tariffs on aluminum and steel that were issued by former President Donald Trump. At the time of their enactment in 2018, the tariffs added 10% on imported aluminum and 25% on imported steel. Canada and Mexico were first excluded, then added, and then tariffs on aluminum and steel from those countries were lifted in May 2019.
“Tariffs increase American consumers’ costs and make American goods less competitive as foreign governments introduce retaliatory measures,” McGreevy said in the release. “Repealing the aluminum and steel tariffs will decrease the cost of everyday goods and will provide immediate relief for American families and businesses still recovering from the pandemic.”
Master Product Catalog Accessible for Brewers
Retailers, distributors and third-party platforms now have access to the master product catalog (MPC), a digital library of product information spearheaded by the Beer Industry Electronic Commerce Coalition (BIECC) and software-as-a-service firm Syndigo, the National Beer Wholesalers Association (NBWA) announced today.
The MPC was introduced last year to streamline product information as e-commerce sales of alcohol have risen steadily, NBWA VP of state affairs David Christman said in a press release. Last year, consumers spent $6.1 billion on alcoholic beverages in e-commerce channels, $960 million of which was in beer, according to a report from Rabobank beverages analyst Bourcard Nesin.
“Since the start of this project our goal has been to provide a single source of reliable, accurate data for the beer industry,” said Christman, who is also the executive director of the BIECC. “With the MPC, brewers can freely and easily upload their brand information and retailers, distributors and solution providers have open access to use the content.”
Brewers have been adding products to the catalog at “steadily” increasing rates in recent months, which indicated to the BIECC that the time was right to grant access to other users.
“The BIECC is working to provide a platform that gives equal opportunity for the entire beer industry, which is really exciting to see,” Chris Barnes, Syndigo SVP of corporate development and solutions delivery, said in the release. “We are proud to partner with the BIECC to help them harness the massive growth in the category’s online content, now and in the years to come.”
NBWA manages the BIECC, which was founded in 1994 and includes representatives from the BA and BI, large beer manufacturers and wholesalers.