Aluminium cans supply expected to remain ​tight: Wilcraft Can

Sean Kingston is the owner of WilCraft Can, a mobile canning firm that helps craft breweries package their beer around Wisconsin and the adjacent states. According to him, the COVID-19 outbreak boosted demand for aluminium beverage cans as breweries of all sizes moved away from kegs and toward packaged goods that could be drunk at home.

According to Kingston, the supply of cans is still limited more than a year later. Every customer, from tiny packaging companies like his to large brands, has a certain allotment of cans from the company who create them.

"We created an allocation with the specific can supplier we’re working with late last year. So they are able to provide us with our allocated amount. We actually only had one miss on an allocation, where they were not able to supply,” said Kingston.

As a result, Kingston ended up reaching out to a third-party supplier, who buys cans in bulk from manufacturers and resells them to smaller makers at a higher price. He also stated that any company or firm trying to expand capacity or develop new project at the moment, will face difficulties.

"You can't really change your demand that sharply just because basically all of the can volume that is out there is practically spoken for," added Kingston.

Mark Garthwaite, the executive director of the Wisconsin Brewers Guild stated that, the restricted supply isn't like typical supply chain problems, when shipping delays or a scarcity of parts hamper production.

"It’s rather simply about manufacturing capacity. There are very few manufacturers of aluminum cans in the United States. Beer producers have ordered about 11 percent more cans in the past year, so that's an added squeeze on the supply of aluminum cans and can manufacturers just haven't been able to keep up,” said Garthwaite.

He further stated that brewers that use pre-printed cans, have had the most delays, with some having to wait an extra three to four months for their cans. Some makers, he added, have shifted to unlabeled or "bright" cans and applied their own labels. However, this has its own set of consequences.

Not every brewery is equipped to do that. Many of the smaller breweries that are equipped to (use bright cans) would then see a risk of depletion of the bright can supply for them,” added Garthwaite.

Breweries aren't the only ones who are helping to drive up demand for beverage cans. During the peak of the epidemic, soda makers sold less from fountain machines and transferred more manufacturing to packaged products, according to Garthwaite, similar to the movement away from kegs. At the same time, prominent bottled water firms began switching from plastic to aluminium bottles since it is more environmentally friendly.

"Innovation in other beverage categories like ready-to-drink cocktails and hard seltzers has really increased the amount of aluminum cans that are going into other sectors as well. There’s just been a significant increase in demand for those cans that there's not much we can do until manufacturing capacity increases,” stated Garthwaite.

The expanding market for seltzers and canned drinks, according to Kingston, has made procuring skinny cans and other specific sizes "almost impossible" for his company.

He claims that can imports from Asia have grown in the recent year. However, Kingston stated that American manufacturers are working as swiftly as possible to boost output because the present demand appears to be sustainable.

"That's one piece of the puzzle that should help alleviate this burden. Running on allocation just isn't smart on the producer’s side long-term either because they're really missing out on potential sales," added Kingston.

Kingston further stated that new plants, will take years to come online. And it's for this reason that his firm has invested in innovative technology to reuse misprinted cans that would otherwise be discarded. Kingston believes that by removing the print and relabelling the cans, they will be able to tap into a whole new supply of cans for its clients.