For Founders Brewing Company and multinationals like Anheuser-Busch InBev, a shift toward large-format packaging is making a huge difference in brand volumes and bottom lines. But stuffing more 12oz cans into a cardboard box is only part of the broader shift in beer.
Glass is never going away, but the adoption of aluminum cans has shown startling growth in the past five years.
Anecdotally, the narrative around beer packaging has been all about aluminum in recent years. Across the country, news outlets are scattered with examples of stories about mobile canning, artwork on cans, and breweries transitioning from bottles to more portable packs.
It all paints a picture of a tectonic shift away from the glass bottle, and while a collection of anecdotes sounds world-changing for beer, it’s not quite that serious.
By sheer volume, it would be impossible in the present moment for cans to overtake glass in sales at grocery, convenience, and other stores. In 2018, six-packs of glass bottles outsold six-packs of cans four times over. For 12-packs, the margin was closer: glass outsold aluminum by 2.4%.
But it’s when you look at the shift in growth for each kind of container that patterns emerge—and they clearly show a change going forward.
For sake of ease, let's start with the two most common packages—the six- and the 12-pack. Here's a look at IRI craft volume sales by case equivalent in the five-year period of 2014–2018, tracking both glass bottles and aluminum cans.
And to narrow things down a bit, the percentage growth of those volume sales, but just for the 2017–2018 timeframe.
Despite the fact that aluminum sells in lower volumes, the growth and industry shifts toward cans are unmistakable. Breweries frequently cite a host of advantages offered by cans, including environmental impact, portability, and lower shipping costs. This change is also taking place because more breweries simply can...can.
“Mobile canning has been the catalyst for the flight to cans we are seeing right now,” Tyler Wille, founder and CEO of Iron Heart Canning Company, told GBH last year. “It’s cheaper for breweries, better for the consumer, and has opened the door for smaller breweries wanting to produce a high-quality packaged product.”
As more breweries enter the market and opt to stay small, the declining cost of entry to package in cans, and the increased ability to move that product through business’ own taprooms, is a big incentive to move away from glass. Colorado's WeldWerks Brewing Company co-founder Colin Jones told GBH last year that using mobile canning for 16oz packs "essentially doubled" what was sold at the brewery. In the same story, Wille said that smaller breweries’ move into cans (and mobile canning) was "inevitable" as a way to better compete with larger companies.
Own-premise sales account for about 12% of Brewers Association-defined “craft” volume, and are growing annually. Anecdotally, this shift has been tracked by the BA and media alike, but IRI sales through chain stores emphasize just how significant this development has been.
When looking at sales of the most common package sizes within IRI-defined craft beer, glass showed a strong, continued downturn in 2018. From 2017–2018, 11.2–13oz glass bottles lost ground as singles (-16.4%), six-packs (-7.5%), and 12-packs (-10.9%). These declines have been happening since 2015, and hit 22oz bombers the most. The format lost 26.7% in volume from 2017–2018, and finished last year with just 41% of the total amount it sold in 2015.
“Cans are pulling faster off the shelves,” Jack’s Abby Craft Lagers co-founder Sam Hendler told the Boston Globe in June. His company only bottled from 2011–2015, started canning in 2016, and now cans all its beer except for some specialty products. “Consumers want cans and brewers want to put their product in a package that’s going to see the highest rates of sale.”
Every major IRI craft can format showed growth last year, from singles on up to 24-packs.
Due to wide adoption in 2018 after little use in 2017, this list doesn't include 18-packs of 12oz cans (+1,986%); 19.2oz cans (+288%); and single, 24oz cans (+242%).
The 19.2oz option is of particular interest, given its increasing volume in convenience stores. The topic was covered by GBH in 2018 and more recently discussed by Doug Veliky, CFO and head of communication for Chicago’s Revolution Brewing, on his personal blog. “Tallboys are a new weapon in the category’s evolution, infiltrating one of the last frontiers at retail: Convenience,” he wrote.
Across the board, canned anything is moving. Of the 12 fastest-growing IRI craft brands in terms of volume share through mid-June, eight of them came in cans: three six-pack, 12oz; two 15-pack, 12oz; and one each of a 12-pack, 12oz, and 18-pack, 12oz.
In the first five months of 2019, 12 different IRI-defined craft brands have passed the $100,000 mark in sales in grocery, convenience, and other stores with a four-pack, 16oz format. That packaging has arguably become a signifier of today’s hop-focused movement, and is particularly associated with the New England-style IPA. An additional two brands that broke six figures in sales were packaged in single-serve, 16oz cans. Of those 14 brands in total, 11 were IPAs or DIPAs, including Tröegs' LolliHop DIPA, Bell's Official IPA, Surly's Staycation Pineapple Lactose IPA, and Sloop Brewing's Juice Bomb Northeastern IPA. An additional SKU was Samuel Adams’ New England Pale Ale, a NE IPA-inspired, lower-ABV style.
“Even if it’s a good, quality beer, it won’t sell if it’s sitting on the shelf in the six-pack format instead of the 16-ounce four-packs,” Rob Vandenabeele, co-founder of website Mass. Brew Bros, told the Boston Globe.
That’s definitely an exaggeration—clearly, plenty of other formats sell, and glass packaging still easily leads in sales volume—but such strong adoption across the country shows how important these new packaging options can be. The world-changing power of canned beer may be an anecdotal narrative, but it comes from a place of fast change.
Of course, cans come associated with their own worries. A brief can shortage struck the industry last year, and America’s ongoing trade wars and tariffs have the ability to sap some growth, but these external factors haven’t stopped the rapid adoption and variety of these format possibilities. The future for packaging isn’t as hazy as the IPAs often found inside these cans.
We’re Gonna Need a Bigger Pack, Pt. 1 — How a Volume Play Changed Founders’ Trajectory
We’re Gonna Need a Bigger Pack, Pt. 2 — How 15-Packs Changed the Game for AB InBev’s Craft Segment
Words by Bryan Roth