Fig. 2: Calculation of estimated can volume due
to unanticipated hard seltzer growth
for mainstream and craft, the net impact was
around 0.4 million barrels of unanticipated can
volume for each. Cannibalization by hard seltzer
offset much of the long-term and short-term
growth in demand for mainstream beer in cans.
On the other hand, craft beer saw more serious
overall volume declines, estimated at 10 percent
by the BA. The large majority of this was attributable
to the pandemic response, as craft beer sales
likely experienced relatively little cannibalization
by hard seltzer (Figure 1).
But the net impact on cans’ share of craft beer
conceals some dynamics. That share was 31 percent
in 2019 (based on IRI and Brewers Association
data). In the pandemic year of 2020, that
share rose to an estimated 40.5 percent in the
first half, according to BA economist Bart Watson.
But that increase in cans’ share has essentially
three components: (1) the dramatic drop-off in
overall craft beer sales – a huge drag on canned
craft volume, (2) the short-term surge in cans’
share as volume shifted in dramatic fashion to
the off-premise, and (3) the long-term growth in
consumer preference for craft beer in cans, which
was still alive and well and making its presence
felt, over and above the short-term surge. The
first two of these will eventually recede when the
worst of the pandemic and the lockdown fade
to the past, but the last one will remain.
So, what’s the bottom line? It’s probably safe to
say that hard seltzer growth is unlikely to catch
anyone by surprise in coming years. But the pandemic
may have concealed just how much consumer
demand for canned beer, not only in craft
but in mainstream, is still growing. And if the industry
also wants to put the can shortage behind
it, when it comes to capacity planning for cans
those trends have to be part of the equation.
In craft’s case that growth has accelerated for
each of the last four years – now that cans’ share
of packaged beer is over 50 percent, it’s not quite
mathematically impossible for the acceleration to
continue, but it’s unlikely. Still, cans could easily
reach 60 percent of packaged craft beer in the
coming years. And if cans become that dominant
in craft beer, there’s no reason to believe that
mainstream beer – whose drinkers have long been
more open to the package – won’t see a continuation
of its own further shift toward cans. M
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