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US canmakers to import 2bn drinks cans as demand outstrips supply

Time of issue::2020-07-22 17:12

With rising demand for beverage cans in North America from customers and limited supply, canmakers are expected to import more than two billion beverage cans from their overseas plants in 2020, reports the Can Makers Institute (CMI), which represents the industry’s interests.

Despite the canmakers building new plants and adding capacity, demand is outstripping supply of beverage cans in the world’s biggest market.

While shipments of beverage cans grew 8.4 per cent in the first quarter of 2020 compared with the same period in 2019 the increase slowed in the second quarter, reports the CMI.

Shipments in the three months to the end of June were 27.05 billion, up 3.0 per cent compared with the same period in 2019. Growth was driven by cans for alcoholic drinks, with 11.28bn shipped, up by 8.1 per cent.

Cans used for soft drinks slipped by 0.3 per cent to 15.77bn in the same period. For the year to date, shipment growth was 5.4 per cent compared with the first half of last year.

“Growth of beverage cans in the second quarter of 2020 was slightly less than the first quarter, which is attributed to a lack of available capacity during the beverage can manufacturers’ traditional spring/summer high season,” said the CMI.

“The beverage can manufacturing industry has seen unprecedented demand for our environmentally-friendly container prior to and during the Covid-19 pandemic. Most new beverages are coming to market in cans and long-standing customers are moving away from plastic bottles and other packaging substrates to aluminium cans due to environmental concerns.

“These brands are enjoying the many benefits of the aluminium can, which has the highest recycling rate among all beverage packaging.

“One indication of the demand for aluminium beverage cans is found in National Beer Wholesalers Association and FinTech OneSource retail sales data that shows cans have gained seven market share points in the beer market versus other substrates due to the consequences of the Covid-19 ‘on premise’ shutdowns.”

Canmakers have been increasing investment in new manufacturing capacity, but the coronavirus pandemic has interrupted progress in building new plants and installing production lines.

Ball’s chief executive John Hayes said in June that demand for the year for beverage cans had increased by 8 per cent due to demand for speciality cans used in emerging sectors such as spiked seltzers, which is much higher than the 2 to 3 per cent of recent years.

“We were not up nearly that much because we have been short of capacity,” he explained, which is the reason for the new production capacity being brought on stream.

Hayes estimated that Ball will be adding between six and eight billion units of capacity this year and next. A new production line is due to start up in July up at Ball’s Forth Worth plant in Texas, shortly followed by a fourth line at its Rome plant in Georgia, for making 7.5oz (220ml) cans.

Ball previously announced that it planned to build a new plant in the US north east, at an undisclosed location. This is now expected to start up in the second half 2021. Another plant is also under construction at Glendale in Arizona that will have two lines supplying the adjacent Red Bull canning facility with operations also due to start later in 2020 or early in 2021. This was in addition to a new plant at nearby Goodyear with four production lines built in 2018.

Although Crown has increased the capacity of its relatively new plant at Nichols, New York, and converted a line to make beverage cans at Weston, Ontario, it is also in the process of constructing a plant at Bowling Green, Kentucky.

The shortfall in beverage can capacity has also attracted newcomers to North America such as Canpack, the Polish-based but US-owned global canmaker, which is planning to build its first plant in the region with a projected start up at the end of 2021. A drinks distiller and Coca-Cola bottler is also planning to build a plant in Florida.



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