Craft brewing canning trends: We review the numbers and confirm the hype

Every year, we end the Craft Brewing Business calendar year with a look back at the biggest headlines and our best features across our main topic categories. As I was looking back at the year in packaging, once again, the canning headlines stood out, both for their sheer volume and their coolness factor. But this was also the case last year. So, is this just media-driven buzz, or is there really a huge shift to cans happening in craft beer?

First consider the vast number of breweries promoting cans. This is the sheer volume factor. You have Saint Arnold Brewing Co. rolling out cans for its two top-selling year-round beers — Saint Arnold Fancy Lawnmower Beer and Santo — after installing its 20-head filler canning line. Victory Brewing Co. debuted Summer Love Ale in convenient 12-ouncers. Firestone Walker released its core beer in cans, including Union Jack, Easy Jack and Pivo. And, of course, there were new cans from Tallgrass Brewing, Meadowlark Brewing, Saltwater Brewery, Kulshan Brewing and new canning lines for a bunch of breweries, such as Crystal Lake Brewing and Eddyline Brewery (Eddyline did so to minimize aroma loss).

“We could have rushed into canning a few years ago, but we wanted the timing to be right,” said brewery co-proprietor of Firestone Walker David Walker. “The market for canned craft beer is now hitting its stride, and canning technology has come a long way in a short period. Also, cans are a perfect fit for life here on the Central Coast. All of these factors converged to finally reach a tipping point for us.”

As for the innovation (the coolness factor), you have Hilton Head Brewing, which went with the 90 percent certified recycled evercans from Novelis; introduced in 2014, Novelis’ evercan has been adopted as the material of choice by Red Hare Brewing Co., Red Brick Brewing Co., Southbound Brewing Co. and Second Self Beer Co. as well. Fifty West Brewing, to celebrate its first-ever can release, issued special, limited-edition cans with removable ‘Golden Ticket’ labels that were redeemable for one free entry to this year’s Fifty Fest.

Big Choice Brewing experimented with the XO reclosable end from Xolution that creates an airtight seal every time the tab is re-closed. Mike Hess Brewing capitalized on Crown’s 360 End technology (the entire top comes off, creating more of a pint glass experience).

Does this prove anything on its own? Not really. But remember, 2015 kicked off with a report on the growing demand for cans. In “Cans way up, bottles trending down according to 2014 beer industry data,” the chief economist of the National Beer Wholesalers Association, Lester Jones, pointed to data that showed:

The can segment was the big winner in 2014, growing more than 30 million cases and gaining almost 1 share point of total volumes from 2013. Bottle packages lost almost 18 million cases and subsequently lost almost all of their share to can packages. Draft, on the other hand, continues to hold a 10 share of the market, losing only about 1.2 million case equivalents (CEs). The shift between can and bottle packages in the marketplace was seen in both import (+18%) and domestic (+1.1%) volumes. Clearly, the can package has managed to break into the high-end beer business where glass has traditionally had a hold for both craft and imported beers. Craft beer’s expansion into more channels from convenience to airlines over the past few years also has helped increase can packages share of total business.

And as we ended 2015, reports talked of demand having tidal waved, cramping supply and driving up minimum orders, especially in the 16-ounce category, which many craft brewers are gravitating toward to stand out from the pack. From Fox News:

“Certainly we’ve seen some of our brewery members struggle in recent months,” Bart Watson, chief economist at the craft beer trade group Brewers Association, told the Times. “This has proven to be a real challenge for members that have built their business model around getting these cans.”

In previous years, many small brewers purchased cans from just one manufacturer, Crown, for orders in the low thousands. But as the company started feeling the squeeze to deliver more types of cans with more microbreweries popping up around the country, the can maker upped its minimum order to a truckload, which can range from about 155,000 to 200,000, depending can size.

“That’s a lot of cans to store, it’s a lot of cash to lay out, and the little guys just don’t have that,” Tim Dorward, a mobile canner, told the Times. “Crown was working with people, and they’re very interested in the craft industry, but it just caught them by surprise.”

For further insight, we consulted, Ron Skotleski, director of marketing for Crown Beverage Packaging, North America. Crown is the world leader in innovation for metal beverage packaging and is currently investing in and working on a wide variety of projects to improve user experience, functionality and offer new technologies that would allow brewers greater freedom to create new types of products to offer in a metal can.

In 2015, Crown continued to see explosive growth, including tremendous growth in the number of new breweries starting to use cans (bringing on 135 new craft customers year to date 2015). And there has indeed been an increase in interest in 16- vs. 12-ounce cans, but 12 ounce still makes up the majority of Crown’s business, and those aforementioned large regional players are the ones that have really boosted demand.

“We have also been seeing many of our core craft customers double and even triple in size,” Skotleski said. “We have been seeing lately many of the larger craft players, who have traditionally been in glass, looking at starting or improving their can footprint.”

For cans specifically, YTD the industry as a whole has experienced slightly over 2 percent growth in the Alcoholic Beverage Segment, according Skotleski. In 2015, Crown is projecting can sales for the craft market to finish up 56 percent vs. 2014. From the innovation side, Skotleski expects to see more and more breweries experimenting with a variety of graphics capabilities (inks and varnishes) and some larger breweries trying specific labels in the sleek-styled can size vs. the traditional standard 12- and 16-ounce cans.

So, as we head into 2016, much like the craft brewing industry, do not expect the canning craze to slow down.

“From a marco, industry-wide perspective, I would expect 2016 to continue down the path of acquisition for larger, regional craft breweries. I would not be surprised to see regional breweries continue to expand their distribution footprint and open additional facilities to become national players. I am also optimistic that the larger craft breweries that up until now have focused traditionally on glass, will make a bigger push into cans,” Skotleski said.