Ball reportedly set to increase minimum orders for craft brewers
The Brewers Association has briefed its members of a change in supply with one of the world’s leading can makers, Ball Corporation.
In a statement on its website, the association advised minimum orders will increase for non-contracted customers, and Ball Corporation is set to “direct customer towards distributors”. In the statement, the association also cited this was a consequence of the on-going supply chain issues to do with can shortages.
The statement reads:
“Brewers Association members who have previously been supplied directly via Ball Corporation are being notified that the minimum order, if supply is available, has moved to five truckloads per SKU for printed cans for non-contracted customers. In addition, Ball will no longer warehouse inventory on behalf of customers and is pointing most small brewer customers to a set of distributors and will move non-contract customers with quantities less than five truckloads to these distributors.
These changes show Ball moving toward the type of “long-term contracts for committed volume with effective cost recovery mechanisms” as stated by John A. Hayes, Ball Corp chairman and chief executive officer, on the company’s third-quarter earnings call. Overall aluminum can shortages appear likely to continue deep into 2022 and perhaps further, as there is more competition for aluminum from within beverage alcohol as well as non-alcohol products and more demand for this package type from customers. There are more plants under construction in the U.S. from not only Ball Corporation but other companies too.
For small brewers, this is an additional aluminum supply change challenge coming after a year and a half of many such challenges. Moving a large portion of small brewer aluminum can sales to distributors has the potential to increase prices for small brewers (through increased distributor fees, additional labelling costs, and increased transportation cost), increase lead times, and potentially reduce the availability of cans for smaller brewers who can no longer meet minimums.
Additional impacts could be environmental, including the increased use of plastic shrink sleeves and pressure-sensitive labels if brewers cannot meet minimums, which reduces the recyclability and value of aluminum. There is also the potential for additional carbon emissions with extra transportation of cans to distributors rather than direct shipment to breweries. Depending on how brewers react to increased cost and order sizes, it could potentially lead to lower availability of smaller brands in the marketplace and higher costs for consumers.“
The Metal Packager has reached out to Ball Corporation and The Brewers Association for further comment.