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Published in Food/Agribusiness

CAN-DO: Beverage companies say can supplies remain steady, despite rumored shortages

BY Monday, July 27, 2020 10:05am

Dennis Grumm has heard these rumblings before.

As the founder, CEO and lead engineer for Grand Rapids-based Oktober Design LLC, which sells can seamers to seal lids on cans so breweries can conduct small-scale or to-go canning, he’s used to hearing murmurs that the industry’s staple container might be in short supply.

“It all started about four years ago. Everybody was like, ‘Man, it’s crazy, I heard there is going to be a can shortage,’” said Grumm, whose company also sources and sells blank bulk cans to breweries and beverage companies. “Then six months later, it would be, ‘Man, I heard there is going to be a can shortage,’ and you never really see it.

“If you’re a brewer, I guess for them it might affect them more because there are shortages, but they’re usually very short-lived.”

Heading into the fifth month of the COVID-19 pandemic, reports of an impending can shortage have emerged once again. This time, the rumors carry a little more weight as an unprecedented number of breweries and bars rely on to-go service to make for safer transactions with the public. As well, off-premise sales, especially for large-format packaging, have swelled during the pandemic. Additionally, as liquor laws have loosened nationwide, cans also have become the premier vehicle for to-go beers and cocktails.

As that happens, a recent report highlighting supply chain issues from craft beer trade publication Brewbound cited sources including Austin-based American Canning and can manufacturing juggernaut Ball Corp.

The report explored a potential shortage of slim 12-ounce cans, much of which can be attributed to the explosion in popularity of hard seltzers before the pandemic. Also, 32-ounce Crowler cans, which are crucial in the beer-to-go format, have been an issue.

The Brewbound report also pointed out that local brewers were poised to be hardest hit as the high-volume can producers treat the large breweries as their priority customers.

Grumm confirmed some of the concerns cited in the report, but wasn’t about to sound the alarm bells just yet.

“I have a feeling that all the cans ever used for to-go stuff is a very, very small percent of the cans that manufacturers make. Ball makes billions of cans. ... I haven’t really heard anything (concerning) from our suppliers and we talk to them all the time.”

Grumm said his business ran out of 32-ounce Crowlers, which are often used in the seamers Oktober Design sells, but the shortage only lasted a month and he now has a full stock.

As well, Grumm said he hasn’t noticed a hike in prices. 

Other supply chain issues, however, have slowed down Oktober Design from shipping can seamers to its customers at bars and beverage manufacturers. 

Grumm said that Oktober Design normally provides a one-week turnaround on its machines, but during the peak of the pandemic, that ballooned to about a four-week turnaround. The company continues to work through a backlog and is providing a three-week turnaround now.

Lingering Concerns

Seth Rivard, co-owner of Rockford Brewing Co. LLC, said he hasn’t experienced any issues with his can supply, but he does have some concern and continues to monitor the situation accordingly.

Before the COVID-19 pandemic, his brewery used 12-ounce cans to distribute beer statewide and 16 ounce Crowler cans for to-go orders. After the pandemic hit and Rockford Brewing opted not to open its dining room even when bars were given the go-ahead by the state, sales of 16-ounce Crowlers shot up fourfold.

“We’re going through a lot of them,” said Rivard, who added that he has seen a slight price increase on both cans and lids and that he wouldn’t be surprised if supply became more of an issue.

Rivard’s concern was not necessarily that manufacturers will have a hard time keeping up with demand, but more attributed to the buying patterns of skittish breweries, akin to the dynamic that saw consumers gut grocery stores of essential items nationwide.

“What makes me concerned is that the more people that hear this, the more they will start to stock up and hoard and it makes the situation worse,” Rivard said. “I’m starting to grow a little concerned that it might hit us sooner than later.”

Supply chain issues are a legitimate concern for Rivard and the rest of the industry, even if it’s not focused solely on cans. Rivard said that through the pandemic, he has had difficulty finding everything from hand sanitizer and gloves to picnic tables.

“Another one is to-go packaging,” he said. “We’re a restaurant as well and we do a lot of food and to-go packaging, and there have been some shortages and difficulties in getting what we need. That’s been on and off.”

If Brewery 4 Two 4 LLC in Holland is any indication, small producers that don’t cycle through huge volumes of cans have been able to get by relatively unscathed so far.

“I’m aware of the issue — I’ve heard murmurings from a few industry friends, but so far we’ve been totally unaffected by it,” said David Miller, owner of Brewery 4 Two 4. “We use shrink-wrapped cans for our carry-out cans and while we’ve seen longer than normal turnaround from our supplier, that’s been more due to an uptick in orders to fill on their end than the shortage. Granted, we’re only ordering about 6,000 at a time, which is miniscule compared to places with a full canning line.”

Paul Vander Heide, owner of Grand Rapids-based Vander Mill LLC, added that any supply chain issues with cans aren’t necessarily tied solely to the changes in demand prompted by COVID-19.

“In my experience with cans, it is most affected by people’s recent purchase choices and the large companies that dominate that space,” he said. “Large packs — 12 (ounce), 24 (packs) and up — are in high demand and not generally a package that craft producers have in their portfolios. These things make it difficult to say the least.”

While a can shortage may not have disrupted local beverage producers quite yet, bars and restaurants continue to operate under the less-than-ideal circumstances of the pandemic with a continued emphasis on packaging food and drink to go.

“We’re not through this whole thing yet,” Grumm said. “Who knows what’s going to happen? We’re definitely paying attention to everything pretty closely.”

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