Why Canned Beer Continues To Gain Market Share

Can or bottle? It’s a dispute that’s been raging in beer since the aluminum can was invented. It seems that the perceptions of bottle superiority have finally turned, and even the most discerning beer drinker has no problem reaching for a can.

Which makes this segment a bright spot within a larger category that has experienced several rocky years.

Canned Growth

Overall, beer consumption growth has been flat recently. Consumers are shifting towards the bevvy of malt beverage offerings: ciders, wine and spirits. According to Beverage Information Group’s 2016 Handbook, the beer market shrank by .01 percent in 2014 to 2,843 2.5-gallon cases, a slowdown from the .06 percent dip in 2013 with 2,846 cases. Mature brands are now battling for market share as the growing craft beer segment nips at their heels.

The volume of craft beer being produced grew by 13 percent in 2015, according to the craft beer-focused Brewer’s Association. Revenue for the segment grew by 16 percent to $22.3 billion. And while it’s still a small part of the $105.9 billion beer market, that growth keeps the big beer makers innovating to stay fresh.

Canned beer in particular is growing.

According to data from the Washington, D.C.-based lobbying group the Beer Institute, the share of canned beer has grown 3.5 percent between 2009 and 2015. A 1 percent bump in the last year put canned beer at 55.4 percent of the market in 2015. Bottles shrank 2.6 percent to 33.9 percent of the market, while draft beer has stayed flat at about 10 percent of the market.

Container Share

The container share of cans, bottles and draft beer shows canned products on the rise.

Savings in Cans

So why are manufacturers moving to cans? There are plenty of benefits, including more consistent flavor profiles, as cans don’t allow any “skunkifying” light in. They are also cheaper to manufacture and the light cans are cheaper to ship, which means they’re also more environmentally friendly.

“I can’t reveal the specifics of the cost-saving this represents to us, but it is a factor,” says Emma Giles, Guinness brand director. “However, the difference is not so significant that it overrides consumer preference.”

Giles said Guinness consumers still largely favor bottles. But if the trend changes, Giles said that they will too.

Especially for millennial consumers, the shipping cost and conservation asepcts are important. Younger consumers are more and more concerned about sustainability; 40 percent of them said they have chosen a product based on the environmental impact, according research from marketing and advising agency the Shelton Group.

And while the generation still fares the worst of any on actual environmental practice — according to the same group — it’s a good reason for any manufacturer hedging its bet with cans.

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The nitro can was released by Guinness in 1991. It was targeted at in-home consumption, but travels just as well.

On The Go and Tech-Savvy

Another significant reason that more manufacturers, big and small, are moving to cans is convenience.

You cannot bring bottles everywhere. But consumers can bring cans to a picnic, camping, a beach, even a pool (don’t try that with a bomber bottle, you’ll have a teenage lifeguard lecturing you in a heartbeat). And at home, even can-haters can pour their beer in a glass.

“It’s all about occasion,” says Harry Lewis, a VP at Stella Artois. “A sleek can is ideal for outdoor and recreation, while the bottle will continue to be used for existing sharing and hosting in-home occasions.”

And all the new technology makes cans even more palatable to discerning beer drinkers.

Like aromatic lids, full-top pop offs that turn a can into an open glass, and small-format cans. The wide-mouth revolution was just the start. Expect these current novelties to grow as more beer connoisseurs accept the convenient trade from a glass to a can.

One of the original novelties in the can world is still growing strong. The nitro can was released by Guinness in 1991. It was targeted at in-home consumption, but travels just as well.

“The small plastic ball that contains a mix of gas and liquid nitrogen that agitates the nitrogen in the beer when the can is opened,” says Giles, noting that nitro cans make up a third of Guinness sales. “This allows the beer drinker to enjoy a smooth, creamy glass of nitro Guinness in the comfort of their own home.”

Volume Growth

Volume growth of canned, bottled and draft beer.

Not Just For Big Beer

While only a handful of small brewers have embraced these technologies, big brewers can expect more competition as canning technologies continue to become more affordable. They can expect more competition in cans as well.

In 2014, the Brewer’s Association estimated that just 3 percent of the craft beer volume was in a can. Certainly, tap rooms and bottles are still dominant forms of transportation. But canning is getting cheaper and cheaper.

Not long ago, the only way to get a canning line was with a lot of money or picking up a second-hand line that another brewer outgrew. Now there are more options than ever, cheaper lines designed for smaller brewers and even mobile canning operations that come to the brewer.

As for the headwinds previously affecting cans, they’ve largely been addressed or overcome by the consumer.

Fears over the small amount of BPA in many can coatings have been proven completely safe. Now, consumers know cans are just as safe as bottles. And even the particularly discerning beer drinkers know to pour their canned beer into a glass to avoid the slight taste of metal from the lip of the can.

“The great thing about the American beer market right now is that the consumer is increasingly educated, and educated consumers are less likely to have a bias against cans,” says Emma Giles, Guinness Brand Director, noting another known benefit of cans. “Cans do provide a better barrier to light (as do brown bottles, which is why we use them – although cans provide a complete light barrier), which influences some consumers.”

While it’s busy becoming an upstart rival to big beer manufacturers, the culture of craft beer has also been instrumental in educating consumers. Modern drinkers are now well aware that light leads to off-flavored “skunky” beer and that beer should be consumed from a glass.

“Some of this shift in mindset can be attributed to the craft beer movement. We’ve certainly seen signs of this shift in our business,” says Mike McGrew, VP of communications and brand PR for Constellation Brand’s beer division, which produces Corona, Modelo and Pacifico. “Depletions for our newly redesigned Corona Extra can grew more than 100 percent last year.”

“This can format drove one-third of the brand’s growth in FY16 and grew from about 2.5% to 6% of the brand’s total mix,” he adds.

No matter where the market goes, it seems the can is only poised for further growth as consumers opt for an easy, environmentally friendly and proven safe alternative to bottles.

Nicholas Upton is a journalist in the restaurant and hospitality industry covering emerging concepts, tracking financing and chasing the entrepreneurial spirit. He’s based in Minneapolis, Minnesota.

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