US shortage of aluminum blamed on the spike in popularity
The supply chain of aluminum beverage cans has been interrupted. Analysts float the possible explanation that the skew of off premise consumption during stay-at-home orders creates demand that can’t be met by current supply.
And one particular off-premise beverage is taking center stage. Hard seltzer sales are up 200%. Those factors are causing an aluminum can shortage as can makers now serve a larger market.
It’s true that during the COVID-19 pandemic, more beer is being consumed at homes than in bars, restaurants, and brewery taprooms. About 10% of beer volume was distributed in kegs in 2019. A shortfall of aluminum cans, the industry representatives said, is compressing supplies of certain drinks.
“Aluminum cans are in very tight supply with so many people buying more multi-pack products to consume at home,” Coca-Cola spokesman Ann Moore said in an email.
The positive thing is that there is an abundance of raw material that can produce a large number of cans of aluminum — it’s the limited capacity to manufacture aluminum cans which is affecting the supply. “The aluminum beverage can manufacturing industry has seen unprecedented demand for this environmentally friendly container prior to and especially during the COVID-19 pandemic,” the Aluminum Association said. In cans, several new beverages are in the market, and many long-standing consumers will switch away from plastic bottles because of growing environmental worries over plastic waste. Customers also tend to prefer the usability and storage stability of cans, as they stay at home much of the time.
The industry relies on three main can manufacturers: Crown Holdings, Ball Corporation, and Ardagh Group. AB has their own can source via the Anheuser-Busch Packaging Group.
The National Beer Wholesalers Group, a trade organization representing U.S. beer producers, said 60 percent of beer sold in 2019 was in cans, meaning consumption was still strong before the pandemic shifts. So, the demand for aluminum cans was rising even before COVID-19. The pandemic only triggered an unexpected rise in sales.
The problem is complicated by the big producers hoarding supplies. The toilet-paper of the beverage industry is the aluminum can.
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