Small Breweries Struggle With Can Supply Challenges

News by | Dec 2015 | Issue #107
Kansas’ Tallgrass Brewing switched exclusively to can packaging in 2010. | Photo by David Mayes Photography

As more breweries choose cans, often at minimum quantities, the three can producers—Colorado’s Ball Corp., London’s Rexam and Pennsylvania’s Crown Cork & Seal—are struggling with an influx of new orders.

The Brewers Association notes that despite the recent surge in can popularity, craft brewers only purchase about 2 percent of the canned beer market, compared to about 20 percent of bottles. And in the entire canned beverage industry, they use well below 1 percent of US can production.

Those numbers leave small brewery accounts vulnerable as new orders overwhelm manufacturers. “Crown recently dropped us as a customer, as they did with many small breweries, to take on larger and fewer orders from larger breweries,” says Upstate Brewing Co. founder Mark Neumann. Rexam offers smaller minimum quantities, but it comes with a higher pricing structure. “We’ll have even less ability to turn a profit on the beer we make,” he adds.

Upstate’s production will remain uninterrupted for now, but stockpiling means “putting a huge chunk of our available funds into empty cans sitting in a warehouse,” says Neumann.

Larger craft breweries face challenges, too, although quantities are less of an issue. “A year ago when I placed an order it would come within a week, 10 days tops,” says Suzie Ford, president and co-owner of NoDa Brewing. “Right now it’s 12–16 weeks, which is crazy.” Placing orders well in advance solves the problem for high-selling flagships, like NoDa’s Hop Drop ‘N Roll, but it’s more complicated for smaller batch seasonals or one-off beers, where going from design approval to can production might take more than six months, says Ford.

But breweries have found ways to cope. For smaller-run beers, like its seasonal pumpkin ale, Gordgeous, NoDa uses shrink wraps or stickers on blank cans, which costs more but saves time.

At Kansas’ Tallgrass Brewing Co., which has used all three manufacturers since switching to cans in 2010, it comes down to planning. “We watch our inventory levels closely,” says founder and CEO Jeff Gill, “and make sure that our communication with Rexam is always early and often with any new brands.” Gill predicts a future where brokers act as middlemen, allowing groups of smaller breweries to combine purchases and meet increasing minimum quantities.

But with Ball’s proposed $6.6 billion acquisition of Rexam, the future of caning for small craft breweries remains uncertain.