A leading beverage can manufacturer is raising its minimum orders five-fold starting today, which could financially hurt smaller craft brewers.
Ball Corp., which now will also no longer store pallets of cans for the small brewers, is blaming increased demand for their aluminum cans during the pandemic, along with supply chain issues and inflation, for the new directive. The minimum order is, roughly, now one million cans, up from 200,000 cans.
“For us, it created quite a scramble. We went down the path of trying to figure out how to react and how to make our business sustainable,” Matt Cutter, founder and president of Colorado’s Upslope Brewing, told The Denver Post.
Ball is helping smaller brewers connect with other distributors, but those brokers take a cut, which will also increase prices. As well, Ball also provided preprinted cans; there’s concern that brewers may now just have to order blank cans and apply their own shrink sleeves or labels, another additional cost.
In December, Senator Ron Wyden of Oregon wrote a letter to Ball, noting that “small brewers in Oregon and every state play a critical role in creating vibrant local economies, providing over 400,000 good-paying jobs nationwide” and questioned the new policies and short lead time in implementing them (the policy change by Ball was subsequently moved from Jan. 1 to March 1).
“This is also going to absolutely result in price increases for the beer drinker,” said Bob Pease, president and CEO of the Brewers Association. “These business models are now going to be, at best, less profitable.” As well, craft beer fans might now see fewer choices available from their favorite brewery.
In one cited example from the Post article, Upslope noted that their six-packs now cost $2 more. And while Ball Corp. is spending $1 billion to open five new aluminum can packing plants, that’s going to take some time. So expect cost increases in the short run on your favorite brew … or consider switching to growlers.
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