Quantcast

ST. LOUIS RECORD

Wednesday, June 26, 2024

Unprecedented demand for cans during COVID-19 crisis leads to beer supply line shortage

Hot Topics
Stlouiscan

Two billion cans are expected to be imported from overseas to meet an unprecedented increase in demand during the COVID-19 pandemic.

Beer makers, including Anheuser Busch-InBev, are grappling with supply issues as factories in the United States are unable alone to handle the increase in demand caused by the shuttering of, or slow down at, restaurants and bars.

Can sales have increased by seven percent this year as more people buy at retail stores for home drinking, according to the Can Manufacturers Institute (CMI), a trade organization.

Anheuser Busch referred questions over whether customers may encounter problems finding their favorite beverage due to shortages to beer industry representatives.

Beer industry insiders said that before the onset of the coronavirus around 20 percent of beer sales were in bars and restaurants.

While only eight percent came from kegs, almost all of that amount has shifted to cans, leading to pressure on the can making industry.

Members, including Anheuser Busch, are therefore also concerned about rising costs, on top of the potential for increases caused by the 10 percent tariff on aluminium imports.

"The aluminum beverage can manufacturing industry has seen unprecedented demand for our environmentally-friendly container prior to and during the COVID-19 pandemic," CMI president Robert Budway told the St. Louis Record.

"Can manufacturers are fully focused on filling the extraordinary demand from all sectors of the industry’s customer base."

Growth in the production of beer and other beverage cans slowed in the second quarter of this year, which Budway said was "attributed to a lack of available capacity during the beverage can manufacturer’s traditional spring/summer high season."

He added: "Can makers are expected to import more than 2 billion cans in 2020 from their overseas facilities to meet customer needs.

"And, can manufacturers expect to have add the capacity to produce 12 billion more cans by the end of 2021." 

Approximately 36 billion cans were produced for the beer industry alone in 2018.

"One indication of the demand for aluminum beverage cans is found in National Beer Wholesalers Association and FinTech OneSource retail sales data that shows cans have gained seven market share points in the beer market versus other substrates due to the consequences of the COVID 19 'on premise' shutdowns."  

While the beer making industry is playing down the prospect of customers not being able to find their favorite brands, some believe the 16 ounce cans - or "tall Boys" - will be in a short supply.

"Sixteen ounce cans are going to be a problem this summer,” as David Racino, co-founder and CEO of American Canning, a Texas-based packaging company, told the beer journal Brewbound recently. “There is just such a strain on the supply chain right now

More News