Graham Slimp-Holland couldn’t be happier with the trends he’s seeing for packaged beer. “We used to sell more bottles than cans, but that’s flipped,” says the manager of McGaugh’s, a Flagstaff, Arizona beer store that specializes in craft brews. “Cans are a better package for beer. They’re portable, recyclable, and provide better protection for the beer than glass.” Of the 300 craft beer SKUs at McGaugh’s, about 160 are canned, Slimp-Holland says, with 12-ounce singles ranging in price from $1.50-$5 a can.
Canned beer—and particularly canned craft beer—is having its moment. According to Nielsen, for the 52 weeks ended December 2, 2017, off-premise dollar sales of canned beer increased by 1.7%, easily outperforming beer industry trends during the period. Growth was far more dramatic for canned craft beer, as dollar sales soared by 38%. Within the craft segment, cans’ share of total production increased to 18% last year, according to the Brewers Association, compared to 17% in the previous year.
“Consumers have become educated—they’ve learned that cans are a better package for beer than bottles,” says Chad Melis, marketing director at Oskar Blues, the Colorado brewery credited with popularizing canned craft beer. Melis adds that while craft beer pioneers largely relied on bottles, fledgling brewers have discovered that cans are a more affordable option. “Today, new breweries go to cans,” he notes, adding that Oskar Blues has been overwhelmed with the growing response to cans from craft beer consumers. “Back in 2002, we couldn’t get anyone to take canned craft beer seriously. But we’ve always believed in the can’s merits, and we’ve worked at educating retailers and consumers as to why it’s a better vessel than glass.”
Cans Stack Up
Other brewers have adopted cans more recently. “In 2013, we developed and launched our Sam Can, which was designed to provide a drinking experience a bit closer to the taste and comfort of drinking beer from a glass,” says Jim Koch, founder of Boston Beer Co. He adds that the can design required a million-dollar investment in special equipment. Earlier this year, Boston Beer rolled out two new beers—Sam ’76 and New England IPA—in cans, not bottles. Koch argues that “cans were really the best choice” to safeguard the New England IPA’s hop character, haze level, and aroma. “They protect the beer from sunlight and oxidation, which can compromise the flavor,” he says.
The movement to cans in craft beer is becoming apparent at retail. Derek Ridge, beer manager at Hazel’s Beverage World in Boulder, Colorado, says several established craft brewers have made the switch from bottles to cans while new players are going directly to cans. “It’s easier and cheaper,” says Ridge, noting that cans comprise more than half of all craft beer sales at his store, which stocks about 350 canned craft SKUs, priced on average at $9-$10 a 6-pack. Left Hand Brewing Co. of nearby Longmont began canning in 2016 and by the end of last year, canned brews already amounted to almost a quarter of its packaged sales, according to sales director Jason Ingram. “Response has been fantastic,” Ingram says. “Folks had been asking us for years to make the addition.”
Overall, beer retailers are applauding the move to cans. “I prefer it,” Ridge says. “There’s a space issue. I can fit more canned beer in my cooler, and stacking is easier.” In the on-premise, where canned beer has historically lagged, the package is picking up steam. The Black Squirrel in Washington, D.C.—which puts a big focus on its regularly rotated draft brews—features mainly cans among the 15 packaged beers it sells, offering them at $8 each. “Just a few years ago we didn’t carry much in the way of canned beer,” says manager Michael Richardson. “But that’s changed with so many craft brews now available in the package.” Brewfontaine beer bar in Bellefontaine, Ohio offers about 20 craft brews in cans ($3-$6) versus 14 bottled options. “The cans allow for eye-catching artwork, as opposed to the small labels on bottles,” notes owner Jeremy Fitzpatrick. And in Dallas, the Smoky Rose restaurant opted to sell only draft and canned beer—no bottles—when it opened last year. “We strive for a diversified beer list,” explains general manager Leo Morales. “Many of the beers we want to offer only come in cans,” he says, citing Karbach Brewing’s Hopadillo IPA. Canned beer at Smoky Rose, which accounts for about 35% of the concept’s beer sales, is priced from $3-$7 a can.
New Wave Packaging
Non-traditional can packages are also contributing to canned beer’s uptick. Fifteen-packs of 12-ounce cans, 4-packs of 16-ounce cans, and slim cans are all experiencing growth. Value-seeking craft beer drinkers have been attracted to the 15-packs, including the package leader, All Day IPA from Founders Brewing Co. Bonnie Volpe, vice president and district marketing manager of food, sundries, and beverages for BJ’s Wholesale Club, says 15-packs are “a popular choice among our members because of their size and value.” She adds that the recent merchandising of All Day IPA 15-packs at the chain’s 130 stores that are licensed to sell beer was a particularly successful initiative. Now, the package is spreading to more mainstream beers: MillerCoors’ Blue Moon recently replaced its canned 12-pack with a 15-pack.
Sixteen-ounce cans—a preferred package for high-abv brews—have also risen in popularity in recent years. Koch explains that New England IPA, with an abv of 6.8%, was launched in 4-packs of 16-ounce cans because “most craft beer drinkers recognize this packaging for bigger beers.” Melis of Oskar Blues adds that 16-ounce cans “stand out in the cooler, and consumers are drawn to them.” The format is particularly strong in Vermont; at Beer King in Rutland, for example, 4-packs of 16-ounce cans, retailing from $10-$17 take up four cooler doors of space. “We’ve shifted a lot of our business to independent craft beer in 4-packs,” says owner Roger Block, adding that at least half of his craft beer sales come from cans. He notes that the growth of canned beers is also coming from mainstream brews. “Bud, Miller, Coors—they’re still selling,” he says. “We sell a lot of Michelob Ultra in slim cans.” Volpe has also seen the brew perform well at BJ’s.
Aluminum Costs And Trade
One potential crimp in the canned beer movement is the White House announcement this spring of new tariffs on steel and aluminum. The Beer Institute, noting that more than half of the beer produced annually in the United States is now sold in aluminum packaging, estimated that the tariff—pegged at 10% on aluminum and 24% on steel—would amount to a tax of nearly $350 million on canned beverages and cost the nation tens of thousands of jobs.
“Like most brewers, we’re selling an increased amount of our beer in aluminum cans, and this action will cause aluminum prices to rise,” said MillerCoors in a statement. “It’s likely to lead to job losses across the beer industry.” The company says it will be difficult to source from domestic suppliers. “We buy as much domestic can sheet aluminum as is available,” MillerCoors said. “However, there simply isn’t enough supply to satisfy the demands of American beverage makers.”
Anheuser-Busch InBev (A-B InBev), which estimates that nearly 25% of its production costs come from purchases of aluminum, added objections of its own. “About 2 million jobs depend on America’s beer industry,” noted Felipe Dutra, A-B InBev’s CFO. “We urge the Department of Commerce and U.S. President Trump to consider the impact of trade restriction tariffs.”
While at press time, some countries were exempted from the tariffs, the beer industry overall seemed in agreement that the move would create a stumbling block in canned beer’s path.
Retailer Endorsement
But for now, beer marketers are staying positive about the package, maintaining that canned beer provides advantages over glass for consumers and retailers alike. “The beauty of canned beer is that it’s perfect to drink for any occasion—on a boat, at a game, on the beach,” Koch says. Left Hand’s Ingram adds that for retailers, the smaller pack size of cans versus bottles “means being able to fit more on the shelf or set.” That’s an asset for BJ’s, Volpe says, as large multipacks of cans “align well with the wholesale club format and enable us to offer great value and a wide selection of beer to our members.”
Retailers find little fault with canned packaging, although Richardson from Black Squirrel concedes that bottles may offer a better presentation at the bar than cans. But Morales of Smoky Rose counters, “Some 85% of the beer we sell in cans is poured into a glass,” so presentation really isn’t impacted. Block from Beer King sees no downside to cans. “I hate glass—I wish it would go away,” he remarks. “Cans are lighter and don’t break. And in Vermont, they’re easier to redeem for the five-cent deposit than glass.”
Retailers and beer marketers say that any previous stigma associated with canned beer has dissipated. “The debate over bottles versus cans has been a sticking point for brewers in the craft beer community for years,” remarks Koch. “In the past, I had my doubts about putting Sam Adams in a can because I wasn’t convinced that Boston Lager would taste as good as it does from a bottle. But cans have changed.” Slimp-Holland says the occasional McGaugh’s customer will question the quality of canned beer over bottled beer, “but their friends will explain that cans are better for the beer, and then they’re fine with it.”
Still, beer marketers caution that retailers need to select the right canned beers. “The beer must turn,” advises Melis of Oskar Blues. Ingram agrees. “Just because you can fit more doesn’t mean that you should do so at all costs,” he says. “Make sure the consumer is able to decipher the set to make purchasing easier.”
On- and off-premise beer retailers uniformly agree that canned beer—particularly crafts—has a bright future. “I expect craft beer in cans will continue to grow in popularity,” says Ridge. “People realize it’s fresher and tastes better.”