Craft Breweries can shortage?

Well, no company wants to tie funds up in excess inventory (thus the popularity of "just-in-time" raw material ordering) but the City Memphis brewery where Sixpoint brews and cans their beers certainly appears to have enough warehouse space for storing the higher minimum order that his supplier, Rexam, requires.

Schlitz and Stroh were cranking out several million barrels a year out of that brewery - probably required quite a few pallets of empties cans.

 

If you talk to the Brewers that started in the early 80s, bottles were not easy to source. I remember the statement was when they called the bottle manufacturer, the reply was "sure you can buy bottles, how many box car loads do you need".

 

The can supply shortage exists for both 12 oz & 16 oz cans. What most people are not aware of is that there really are only 3 suppliers Ball, Crown and Rexam (and Crown is in process of buying Rexam).

The minimum quantities for printed cans are either a half truck load or full truck load of a can design so that works out to about 102,000 12 oz cans or 77,000 16 oz cans for a half truck load. Unless a brewery is doing some real volume they are not going to do printed cans. This is especially the case when you add in the design costs that are several thousand dollars per can design for printed cans.

The easier way up to now for smaller breweries has been sleeves or stickers which can be applied to a blank can. This is where a lot of breweries that do smaller volumes end up and it has been a great solution. However, with the can shortage it is even hard to get blank cans now. This was not clearly explained in the articles.

Most breweries are making the best of it and the medium/larger breweries are still able to get orders for their existing printed can designs though in most cases new designs are not easy to get done these days. Eventually is demand continues the suppliers are going to increase capacity or change over capacity to where the demand exists for 12/16 oz beer cans.

 

Many of the earliest microbreweries used true "returnable/refillable" deposit bottles and, given their very local self-distribution, they probably had relatively good luck getting the bottles back quickly - saving them money on buying new - or used - bottles. (OTOH, it did increase time and labor costs on bottle washing.) Ken Grossman's book has a photo of stacks of Bud, Schlitz and Regal Pale (and a few I don't recognize- that's a Henry Weinhard on the floor in front) returnable cases of bottles they originally used - possibly purchased from the breweries but, more likely, from retailers or distributors, for the price of their deposit value ($1/case at the time - 2¢ a bottle, 52¢ for the shell).

Used without permission. Don't sue me, Sierra Nevada!

I've always thought that the creation of the "long neck throw-away" bottle which is now the near universal bottle used in the US was in reaction to the early craft brewers' long neck usage - the bottle became a symbol of a "premium" product. (well, Lone Star's "Long Neck" campaign probably helped, too - not sure if they were T/A's or not). Before that, almost all US throw-aways were various versions of stubbies, "heritage" and "select" style bottles.

When the first east craft brewery, Wm. Newman of Albany, NY, started up in 1981 he purposely decided against bottling - too much added work AND his was a large draught beer market - but had difficulty finding kegs. He called August Busch III up and made a deal to buy old AB kegs (I imagine it was around the time AB, like other large US brewers, were converting from the old Golden Gate style kegs to Sankeys).

 

Thanks to @DovGibor for pointing out my typo above -- too late for editing it seems -- It is Ball that is buying Rexam and not Crown

 

So it is a raw material shortage? Neither of the articles have explained exactly why the manufacturers are increasing minimum orders. They aren't going to turn down business for no good reason.

 

Probably just like any other manufacturing facility (including breweries), their plants can only produce so much without added shift(s) or adding expensive equipment. If they are running efficiently and productively now, there's no incentive for them to spend a lot of money. The one article suggests that some of the Rexam production plants may be sold to another or new entry into the market. IIRC, there had been a few closures in the past - including some of the plants AB sold Ball after the AB-InBev merger.

 

So more that they've reached their production capacity, and demand is high - so they are in a position to dictate selling conditions. That would be simple to explain - and doesn't seem like a conspiracy against craft brewers then.

If there isn't a raw material shortage, then in theory some competition should fill that market segment.

 

Let's some of us open a can factory/ hop farm!

 

If there were a shortage in aluminum you would hear about it causing problems with the production of airplanes and automobiles. Nothing has been heard from those industries.

 

It sound like a gross underestimation of the big three canners of how popular canned micros would become. They knew their steady customer of macro and sodas and I assume that didn't fluctuate much, expect between customers. Now you just added millions of new can requests in the past couple of years. First year they watch, the next year they are like, "shit, we can't make any more". I would assume they are now planning new/expanded factories but you don't just throw one of those up in 9 months.

 

Do breweries that can have more of a Difficult time with special releases or One offs due to the minimum purchase on specific labels!

 

FWIW, Alcoa is shutting down 2 aluminum smelters in Washington, including one here in my county: http://www.bellinghamherald.com/news/local/article42310680.html

 

From the linked article:
"The price of aluminum has been hitting new lows in terms of prices as China continues to increase production."

It reads to me that there is plenty of material (aluminum) available.

Cheers!

 

Remove China and insert Saudi Arabia. Remove aluminum and insert oil. Is it me or is there a common theme but just a different commodity? Just a matter of price point survival.

 

One of the much touted advantages of cans, is its greener footprint. Shipping the stuff across the Pacific ocean isn't very green. It's just one more thing that may, or may not, be contributing to the overall picture.

 

If the problem is that breweries cannot fill the minimum orders, how the hell is this a "can shortage"? Every year there is a different mysterious shortage of some kind driving up the price of various goods.

 

Maybe breweries will start bottling their beer again.