Craft beverage companies feeling aluminum can shortage, tariffs
July 27, 2018 05:51 PM
Can-’t get enough. Craft brewers are facing an aluminum can shortage. The beverage industry has seen a 15 to 20 percent increase in the use of cans over bottles in recent years.
Brewers said the three major can manufacturers in the U.S. didn't foresee that hike, and are now way behind on filling orders.
To make matters worse, the aluminum is more expensive because of federal tariffs.
Companies like Coca-Cola have already said consumers should expect to see higher prices on their canned products. Locally, officials from Nine Pin Cider Works and Berkshire Brewing Company said between the shortage and the tariff, their production costs are on the rise as well.
Because of that, you may have to pay more for those canned beverages as well.
"It's tough to have a product and nothing to put it into,” Berkshire Brewing Company CEO Gary Bogoff said.
In the beginning of July, Bogoff got a message from his supplier, Crown, telling him the company is tens of millions of cans behind on orders.
"There has definitely been a price increase since the tariff was mentioned,” Bogoff said. “I don't know if it's actually been enacted yet. Personally, I have a hard time understanding why we would put a tariff on something that we can’t make in this country. You know we don't have aluminum or the raw material to make aluminum."
For now, Berkshire Brewing Co. is switching back to bottles for some of their products. Though it gets the job done, there are a few drawbacks to bottling beverages.
Compared to cans, bottles are heavier to ship, their shelf life is shorter and they aren't as easy to recycle.
Alejandro del Peral, one of the owners of Nine Pin Cider Works, said they used to bottle their products, but canning has allowed them to expand production significantly.
"We started with bottles we were producing about 25,000 gallons a year and now we’re over 100,000 gallons year,” del Peral said. “So it has more than quadrupled our volume"
del Peral said Ball, his can supplier, hasn't raised prices as a result of the shortage. But coupled with the aluminum tariff that could soon change.
"They did send a sort of precautionary emails out just mentioning that the tariffs, potential tariffs could influence the pricing of our cans but nothing concrete yet," del Peral said. "We will see, we will see how much, what it translates to. But you know any cost affects the bottom line so it's always a concern."
At a joint news conference on Wednesday President Trump and the European Commission President Jean-Claude Juncker agreed to work on eliminating the aluminum and steel tariffs, but it's unclear just how soon that will happen.
Local craft beverage companies will just have to wait and see what happens in the meantime.
Created: July 27, 2018 05:51 PM
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