Beer can calamity threatens Colorado's small breweries
Colorado's craft breweries survived the pandemic by shifting to packaging beer for to-go sales.
- Now, a local company may unexpectedly cut off brewers' survival strategy.
What's happening: Westminster-based Ball Corp., the world's largest can maker, recently sent a letter to breweries without contracts saying they would no longer fill direct orders of less than 1 million cans or store them. The previous minimum order was 204,000 cans.
- To get cans, the breweries would need to go through a middleman distributor, which is expected to add significant costs.
- Other Colorado breweries, including River North, received notices cutting them off indefinitely, Westword reports.
Why it matters: It's the second existential threat to hit the industry in the past two years, after the pandemic led to a 9% drop in craft beer sales in 2020.
- "These changes, if accurate and widespread, have the potential to change the entire beer landscape for small and independent brewers," said Bob Pease, CEO of the Boulder-based Brewers Association, the trade group for independent breweries, in a statement.
Context: Earlier this year, Ball CEO John Hayes told Axios that the aluminum can shortage would continue into 2022, despite efforts to increase capacity.
- As a result, Ball says it is prioritizing its largest clients, such as global beverage giants like Anheuser-Busch and Coors, which also have breweries in Colorado.
State of play: Most independent breweries don't use 1 million cans in a year overall, and certainly not for an individual variety of beer.
- The cans craft brewers can find will now cost more and possibly feature shrink-wrapped packaging that will make them less recyclable, which runs counter to Ball's corporate do-gooder strategy.
Denver Beer Co. says the move will increase costs three times over, while Dry Dock Brewing in Aurora anticipates a 37% increase in costs — most of which will likely get passed on to consumers.
- "It would be cheaper to buy five truckloads of cans and send four of them back to the recycling plant," Denver Beer's Patrick Crawford told Westword.
- "We might have to rethink our entire business model if we aren't able to compete on price with macro breweries and faux craft and if consumers aren't willing to pay more for craft," Dry Dock's Kevin DeLange told the Denver Business Journal.
This story first appeared in the Axios Denver newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.
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