Supply Shortage: The 'Candemic'

The crunch on aluminum cans comes just when COVID-19 fears have made breweries more dependent than ever on packaged-beer sales. Relief is unlikely to arrive soon.

Joe Stange Oct 3, 2020 - 12 min read

Supply Shortage: The 'Candemic' Primary Image

Photo: Courtesy Boneyard Beer

Boneyard Beer in Bend, Oregon, bought a canning line back in 2010, the year of the brewery’s founding. It collected dust for a decade.

Tony Lawrence, founder and brewer of Boneyard, says the plan was to start as a draft-only brewery—then, maybe, they would start packaging beer in their second year. That never happened. Demand for fresh, kegged Boneyard beer—such as its popular flagship, RPM IPA—remained strong in the Pacific Northwest for 10 years. “So, the draft pathway was chosen for us,” Lawrence says. “And we liked it.” The brewery grew to produce more than 30,000 barrels per year—all in kegs.

Then came the pandemic and the lockdown that weekend of March 14. Draft beer went into hibernation. It was plain to Lawrence and his Boneyard team that they would have to start packaging in earnest—but that old 10-cans-per-minute machine from a decade earlier was not going to cut it. Within a few days of the lockdown, they had booked Craft Canning, a mobile service, for a couple of dates in April.

“We began sourcing equipment and establishing relationships as soon as we could,” says Nick Murray, Boneyard’s manager (whose real title, according to Lawrence, is “doer of things”), in a recent email to the brewery team. “Our primary focus was emptying our full cellar and releasing beer as fresh as possible.… As a draft-only brewery, we wanted to beat the curve to market with packaging.

ADVERTISEMENT

“And now the curve has caught up, and we’re all feeling the pinch.”

That “pinch” is the insult atop the pandemic injury—a widespread, prolonged shortage in aluminum cans. The causes are a perfect storm: The popularity of cans as a drink package was rising dramatically even before the COVID outbreak. Then the loss of draft beer led producers to pivot to packaging—even as drinkers loaded their car trunks and shopping carts with whatever booze they could, aiming to minimize trips to the store.

Priorities First

The first thing that pops up when you visit the American Canning website is a straightforward message: “There is currently a nationwide aluminum can shortage impacting the availability of many can sizes,” the warning says, adding that “delivery dates and quantities are not reliable enough to maintain open online ordering within our standard lead times.” It then directs visitors to information about how to get on the wait list.

To be clear: There is no shortage of aluminum. The bottleneck is in can production, which can’t keep up with demand after the loss of draft beer.

“If I [were] a benevolent dictator,” says Lester Jones, chief economist for the National Beer Wholesalers Association, “I’d drop off a kegerator at everyone’s house.” Unfortunately, he says, “disruptions in the economy are exactly what they are—unplanned events.”

Uncertainty is wobbling both the supply and demand curves of the beer market, he says. The challenge for breweries is to keep their product available and accessible—after all, it’s not as if there’s a shortage of beer. “Everyone’s going to find a beer,” Jones says. “They’re not going to go without a beer, right? People are just going to have to look a little harder. They’re going to have to go to their second or third choice of beer.”

ADVERTISEMENT

That might mean that drinkers reach for brands they normally wouldn’t. Or, it might mean they reach for bottles instead of cans, if they’re from breweries they like. While bottles might not be as hip as cans, they have an advantage in not needing to be printed in advance. “Bottles are versatile,” Jones says. “You can just slap a label on it.”

With no obvious near-term solution to the can shortage, breweries with the ability to bottle might want to consider it, if they can’t guarantee their can supply.

About 50 miles north of Boneyard, in Portland, Wayfinder Beer is another draft-centric brewery that had to lean more heavily on cans this year. Brewmaster Kevin Davey says they haven’t yet had any problems getting the cans they need, but “we’re planning on having to put beer in bottles when the next lockdown occurs, if there’s a nationwide shortage. I’m assuming most states will go back to lockdown this fall, and brewers will have to pivot, yet again, to packaging. Hence, it’ll cause more can shortages. I want to make sure we have label design ready should we need to stick a pilsner in—the horror!—a bottle.”

As long as the pandemic lasts and people are stocking their home fridges more than drinking in bars and taprooms, the challenge will be to remain available to drinkers who have more important things on their minds. “There’s a time commitment to have to shop now,” Jones says. “Shopping around for your favorite beer should be near the bottom of the things you’re concerned about right now.”

Smaller Operations More Vulnerable

Broadly, the smallest breweries—with less leverage and fewer industry connections—are the ones most affected by the shortage. For the sake of efficiency, manufacturers are prioritizing existing contracts and larger orders. In all likelihood, this will be a tougher blow for smaller breweries, which have fewer distribution opportunities and thus are already struggling due to the virus. “The can shortage may threaten the ability to survive the pandemic for some craft brewers,” the Brewers Association says in a warning issued at the end of July.

In the small, south-central Missouri town of West Plains, Wages Brewing is one that’s struggled, reaching out to fellow members of the Missouri Craft Brewers Guild for assistance.

ADVERTISEMENT

“We brew one barrel at a time,” says Phil Wages, the brewery’s founder. “We got an Oktober MK16 seamer last year at CBC, but selling cans never really took off until we had to close the taproom and go to curbside-only back in March. At that time, we started selling cans and growler fills only, and we quickly ran out of the small boxes of cans we were getting from Oktober.”

In April, he called a nearby brewery that had switched from 16-ounce to 12-ounce cans, hoping they would have some 16-ouncers left. They did: a full pallet, which sustained Wages until early August. “So, I have been shopping around,” Wages says, “and only one supplier that I have found is able to sell me cans. But they insist I need to purchase the cardboard trays and other accessories as well, which I just don’t need. So, I’m still shopping around. The thing is, if I can’t find cans soon, it is really going to make it difficult, and it’s already a tough situation with the virus.”

Sherry Wohlgemuth, executive director of the Missouri guild, says that one Missouri-based company, Allied Packaging, told the Guild that it had suspended new sales so that it could fulfill existing orders and contracts. “This could be pretty dire for our breweries,” she says, “especially if we end up with another lockdown situation this fall [or] winter, with retail package and package-to-go being the only models.”

No Short-Term Solutions

Realistically, it would appear that there are only a few ways out of the crunch on cans:

  1. A COVID-19 vaccine becomes available, widely enough that hospitality can reopen more fully—allowing draft service to return more completely, thus lessening the demand for cans destined for home drinking. This appears to be inevitable, but whether it happens later in 2020 or sometime in 2021, nobody is certain.
  2. Can manufacturers expand their capacity—this is also in the works, but not expected until sometime in 2021, perhaps late in the year.
  3. Public demand for canned drinks drops, or more brewers and other drinks producers pivot to bottles at least temporarily. The former is unlikely; the latter is possible, but unlikely sufficient to temper the shortage.

The Brewers Association issued a warning to members about the shortage at the end of July, saying that it “appears to be a medium- to long-term issue,” rather than one that will be resolved soon, given that can manufacturers have “no quick or easy way to increase production.”

The BA also cited the rise in demand for cans over bottles in recent years—and not just for beer, but also for sodas, seltzers, coffees, and other drinks. The pandemic amplified that demand, as people stocked up on canned drinks for enjoying at home. “More can-manufacturing capacity is due to come online by the end of 2021,” the BA says, “but demand is likely to continue to outpace supply through next year or possibly longer.”

The trade group advises brewers to “carefully monitor inventory levels and lead times and clearly communicate their needs to their suppliers.” The Association also suggests shifting toward larger-volume brands, rather than relying on packaging for secondary ones. “Brewers may also want to consider evaluating other types of packaging as a means of continuing to meet customer demand for their beverages.”

No Easy Choices

Back in Bend, Boneyard bought a used Twin Monkeys line from Craft Canning that fills up to 80 cans per minute. Initially, they had to install it in an awkward spot at the feet of their cellar conicals; they disassembled part of the line every time they needed to access a tank. By late August, they had cleared enough space elsewhere in the brewery—where they had been storing kegs—to make a longer-term home for the canning line.

Now, Boneyard is readier than ever to put more beer into cans—if they can get any. On August 13, the same day a local TV station visited to report on the shortage, they ran completely out. Then, an order of cans that was supposed to arrive a few days afterward didn’t show up for almost two weeks.

In the meantime, nearby Deschutes Brewery helped them out—“We called in a one-time favor,” Lawrence says—so that Boneyard was able to package about 50 percent of what they normally would. “We will see what happens on the 25th—or in September, or October, or Q4, or who knows.” The uncertainty, he says, makes it difficult to spend what’s needed on building out and staffing the new canning line.

“We’re packaging about 4,000 cans a week and trying to build and scale to get to 5,200 cans weekly in the next 60 days,” says Lawrence. That all hinges, he says, on whether they can get cans. “If not, some difficult decisions may need to be made when we pull back on the brew schedule and our other operational decisions.”

Joe Stange is Managing Editor of Craft Beer & Brewing Magazine® and the Brewing Industry Guide®. Have story tips or suggestions? Contact him at [email protected].

ARTICLES FOR YOU