When COVID-19 lockdowns began last year, breweries throughout the country had to shift their business models due to not only having to close their own taprooms, but because of restaurants and bars closing their doors to patrons as well. Many breweries began selling more of their beer in cans, which led to an unexpected problem.
“A lot of smaller breweries pivoted to cans…and all of that downward pressure from breweries of all sizes caused a shortage in one of the most prevalent packages for craft beer and beer in general at this point,” said Clay Robinson, co-chief executive officer of Sun King Brewing Co. in Indianapolis.
In an interview with Inside INdiana Business, Robinson said beverage companies of all types have had to adapt to the shortage.
“There’s not enough run time on machines that make cans, so what a lot of beverage manufacturers have had to do in order to keep their primary packages flowing is kind of shed some of their ancillary brands and really focus on core products,” said Robinson. “I think you’ve seen that with soda. You’ve seen that with beer and there’s been just a more hyper focus on the core brands that have the most shelf space and the most sell through.”
Prior to the pandemic, all of Sun King’s cans were manufactured at the 1 million-square-foot Ball Corporation (NYSE: BLL) facility in Monticello. Robinson says the can shortage has led to Ball planning two new facilities in Arizona and Pennsylvania to keep up with demand.
“There’s an increase in production that’s started to happen. But, for reference, in August of 2019, Sun King utilized 600,000 beverage cans. In August of 2020, we utilized 1.2 million beverage cans. So, our volume essentially doubled on the can front and when you start to multiply that across a myriad of producers, not just throughout the United States but throughout the world, you see a really huge increase and that type of consumer change is really what shifted this and caused a bit of a wrench in the works.”
Robinson said he first started hearing about the shortage early last summer and the brewery first started increasing its orders and warehouse space so it could store more cans.
“We have actually been forced to go overseas to have cans imported in order to help kind of stave off this shortfall. More recently, we’ve had brands that used to exist that don’t exist anymore that we are using a pressure-sensitive label and actually rewrapping the cans in order to take an old can that was maybe obsolete but had never been used and turn it into a brand new product.”
As everyone looks toward the end of the pandemic and even though more bars and restaurants are opening back up, Robinson says he doesn’t anticipate can sales to go back pre-pandemic levels.
“And at the same time, with new manufacturing facilities coming online, I don’t expect these shortages to really be something that are over with until another year or more at this point.”
Robinson says beverage companies of all types have had to adapt to the shortage.