Aluminum cans have become an incredibly popular packaging choice for new beverages. The global aluminum cans market is expected to reach $87.1 billion in , increasing from $54.3 billion in and growing at a compound annual growth rate (CAGR) of 5.39%. With more consumer demand for eco-friendly, sustainable products &#; and the negative publicity for single-use plastic &#; aluminum cans have emerged as the preferred choice for many beverage brands. Eco-conscious customers and companies are drawn to the high recyclability and reprocessed properties of aluminum cans.
According to the Environmental Protection Agency (EPA), aluminum containers and packaging in the United States are recycled at a rate of 34.9%. Of the aluminum containers recycled, more than one-half are beer and beverage containers. Cans also present an advantage in their convenience and portability for an increasingly active, on-the-go lifestyle.
As cans become more popular, there are some important facts to understand when considering if cans are a good choice for your beverage. Your understanding of the can industry, production process and procurement practices can have a significant impact on your beverage costs and time to market. Below are seven things you should know about putting your beverage in cans.
1. There Is Strong Supplier Power in the Can Market
Three major suppliers produce a majority of the cans in the U.S. &#; Ball Corporation (headquartered in Colorado), Ardagh Group (headquartered in Dublin) and Crown (headquartered in Pennsylvania).
Ball Corporation, founded in , is North America's earliest and largest manufacturer of recyclable aluminum beverage cans. With more than 100 locations around the world and more than 24,300 employees, they specialize in the manufacture of metal packaging for foods, beverages, technologies and household products. Their net sales were $13.8 billion.
Ardagh Group, founded in , is a global leader in the manufacture of recyclable metal and glass packaging for some of the world's largest brands. The company operates over 60 metal and glass facilities in 16 countries and employs over 20,000 people. Their combined sales are over $10 billion.
Crown Holdings, founded in , specializes in metal/aluminum packaging technology. The company designs, manufactures and sells beverage, food and aerosol packaging, as well as metal closures and specialty packaging products. Crown employs 26,000 people and reported $11.4 billion in sales in . They operate more than 200 facilities across 40 countries.
The size and longevity of these suppliers give them a lot of power when it comes to setting prices, timelines and minimum order quantities (MOQs). While can suppliers accept orders from companies of all sizes, it is easy for a small order from a new company to lose out to a large order from an established company. There are two approaches to secure your position in the competitive market for cans:
- Plan ahead and negotiate with larger quantity orders.
- Gain purchasing power by coupling your volume with another company that orders large quantities on a consistent basis.
2. Lead Times Can Be Long and Fluctuate Throughout the Year
Lead times are one of the most important aspects of your beverage business. Not building in adequate lead times can throw off your entire production and launch schedule and increase your costs. Given the short list of can suppliers, your alternative options are limited when lead times fluctuate throughout the year, which they frequently do. One extreme case we've seen is when the lead times for 8.4-oz cans jump from the typical six to eight weeks to 16 weeks within a short timeframe. While lead times are particularly long in the summer months (aka beverage season), new packaging trends or very large orders can push lead times out even more.
To minimize the impact of unexpected lead times on your production timeline, it is important to stay on top of your schedule and keep an extra month of inventory on hand, if possible &#; especially during the spring and summer months. It's also vital to keep the lines of communication with your supplier open. When you regularly share updates on your forecasted demand, you give your can supplier the opportunity to alert you to any changes that might impact product availability.
3. Minimum Order Quantities Are Higher Than You Might Expect
Most can suppliers require a minimum order of a truckload for printed cans. Depending on the size of the can, full truckload (FTL) can vary. For example, the MOQ for a 12-oz standard can is 204,225, or equivalent to 8,509 24pk cases. If you can't meet that minimum, you have the option to order pallets of brite cans from a broker or reseller and decorate them. Some popular can decorating options for brite cans include:
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- Pressure-sensitive labels (PSLs): These labels have an adhesive backing. They require pressure for the adhesive to bond with the product.
- Shrink sleeves: These pre-printed plastic sleeves shrink tightly around a can when exposed to heat, providing 360-degree coverage, excellent durability and high-quality graphics.
- Digital print: This emerging technology allows for digital printing of designs onto the can's surface. You have access to many colors and can print images of varying quality.
Although this method allows you to order lower quantities of cans, it's important to know that the per-unit cost is generally quite a bit higher than for printed cans. How much higher depends on the type of sleeve and graphics on it, but it will typically cost $3-$5 per case extra to sleeve a can vs. print on it.
In addition to the cans, you are adding on the cost of the sleeves and the sleeve application, as well as the freight to ship cans to your sleever and to your end location. Most of the time, you will have to pay for full truckload freight because can pallets are too high for less than truckload (LTL) carriers to roll up their doors.
In contrast to sleeves, digital printing for cans is a relatively new technology compared to direct printing, which has been around for decades. The higher cost of digitally printed cans is primarily driven by lower minimum order requirements, slower printing speeds, and specialized ink and equipment used in the process. As the technology matures and production scales up, the cost of digital printing may gradually decrease in the future.
Another option is to order a truckload of printed cans and warehouse them for future runs. The downside of this option is not only the cost of warehousing &#; but also the inability to make artwork changes between runs. A beverage packaging expert can help you navigate this route to optimize your order for future use.
Knowing your budget and having an accurate forecast will help you make an informed decision that aligns with your overall business goals. When making your decision, evaluate the pros and cons of the different packaging solutions. It may be tempting to go for the least expensive option, but depending on your situation, you may want to consider more flexible options, such as digital printing or sleeving.
While these options may have higher per-unit costs, lower MOQs and shorter lead times, they often translate into more flexibility so that you can adapt to uncertain sales or react to fluctuations in demand.
4. Availability May Be an Issue
When you need a particular can style or size, you likely need it right away. Most beverage companies can't afford to wait six months for cans, given their production schedules and launch deadlines. Unfortunately, some can sizes are run unpredictably or only a few times per year, which can cause certain models and sizes to become unavailable for extended periods of time.
Additionally, if a production line goes down for a certain can or if there is a sudden desire for a popular new can model, supply may become limited. For example, if there is a huge spike in demand for Monster Energy drinks, pressure might get put on the supply chain to provide enough 16-ounce cans.
The best way to avoid availability issues is to plan ahead and pay attention to market trends and developments in beverage packaging. Build time and flexibility into your plans whenever possible. During times of threatened or scarce availability, a good existing relationship with your can supplier and co-packer can serve as an excellent source of information to keep you in the know and help you prepare for what lies ahead.
5. Colors on Cans Look Different
Your beverage's brand is a valuable asset that you want to plan and consistently maintain across your advertising and packaging. While standard four-color process printing is what most people and designers are familiar with, printing on a can is much different. In four-color process printing, four colors (cyan, magenta, yellow and black) are applied as separate layers to a substrate, and other colors are created by overlapping those colors or adding a spot color, or PMS color.
When printing on a can, all of the colors must be transferred to the can at one time from one common plate. Because colors can't be combined during the can printing process, you're limited to six spot colors. It can be difficult to color match on cans, especially with white hues. Because there is so much specialized knowledge related to can printing, it's important to work closely with vendors that specialize in can artwork and the special requirements before you place an order. It's also highly recommended that you attend the color proofing and press check to ensure that the cans printed will be what you pictured before full aluminum can production starts.
6. Not Just Anyone Is Good at Can Artwork and Design
Your can artwork and design are equally as important as your can colors. A good can designer should have the expertise to trap and separate your artwork. Trapping is the process of placing a very small margin (usually three- to five-thousandths of an inch) between the colors on the can to keep them from overlapping during can printing since the aluminum cans don't absorb any ink. During printing, the colors spread out towards each other and fill the gap. This is a unique skill that not every graphic artist may be familiar with. You can work with the graphic designer of your choice on design, placement, labeling requirements, regulations, etc., as long as you make sure to have it expertly trapped and put on the correct die lines. If your artwork and design are not set up properly, the end result will not turn out as you expect. It is better to invest in design expertise than to lose money on a printing job that doesn't perfectly represent your brand.
7. Liquids Must Be Tested Prior to Can-Filling
All liquids must undergo corrosion testing before they are packaged into cans. This testing will determine the type of can lining your beverage requires and for how long the lining will last. Aluminum can manufacturers and most contract packers require that your can have a can warranty before producing your finished beverage. Most corrosion testing results in a 6-12-month warranty. It should be noted that some beverages can be too corrosive to be packaged in aluminum cans. Things that can cause your beverage to be corrosive include acidity level, sugar concentration, coloring additives, chlorides, copper, alcohol, juice, CO2 volume and preservation methods. Having the proper testing done ahead of time can help save time and money.
The more you understand the ins and outs of each container type, the easier it is to select the one that best fits your needs. Whether it's aluminum cans, glass or plastic, having the industry knowledge and insights to develop and execute a winning strategy is vital to your beverage's success.
Beverage Cans and Bottles Sourced by BevSource
Are you ready to discuss packaging options for your beverage? We'd love to help! As a leading distributor of packaging to the beverage industry, BevSource has strategic relationships with all the top packaging suppliers that allow us to secure both purchasing efficiencies and a reliable supply. Whether you need aluminum can packaging or different bottles, we can guide you through choosing the best option for your project, and we'll source the best packaging.
No matter the size of your order, you enjoy a personalized experience when you partner with us to source your beverage cans. From beer to seltzer or soda can packaging, we help you choose the right can according to the contents of your beverage, right down to testing can linings using our certified machines. We also work with you to explore ways to customize cans to best reflect your brand.
Start the journey of finding the right packaging for your beverage! Contact our beverage development specialists to tell us about your beverage project today.
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