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Last year, according to the Washington-based Can Manufacturers Institute, a total of 100.750 billion beverage cans were shipped in North America in 2001, up a half of a % from the 100.277 billion cans that were shipped in 2000. European demand reportedly was a little bit stronger - up about 5%.
This, according to Andrew King, director of North American can stock sales for Alcan Inc., Cleveland, was good news. ‘We had forecast that can demand would be down in 2001, so when it came up a touch we were a little surprised and pleased. It was probably partly because of a boost at the end of the year with people trying to avoid the 2002 can price increases.’
All in all, according to Robin King, vice president of public affairs at the Aluminum Association, Washington, the number of cans being made has remained fairly constant over the past few years, whist the overall beverage sector has continued to be pretty steady and is likely to continue on that path this year.
Michael Dunleavy, vice president of corporate affairs for Crown Cork & Seal Co. Inc., Philadelphia, agreed, stating that in 2002 there will continue to be slow growth as aluminium can demand tends to be more population related than anything else since the can market is a mature market.
40 Years of Development
The 1960’s
Aluminium has been used for beverage cans since as early as 1960, first for frozen juice concentrate. But, as early as 1961 Reynolds Metals Co., now part of Pittsburgh-based Alcoa Inc., armed with a study showing that the public preferred aluminium cans over tin plated steel cans, established its Reynolds Can division and soon made inroads into the marketplace with its easy-open aluminium can lids. This speeded the development and commercial use of aluminium cans for the beer and soft drink markets. By 1963 12 ounce aluminium beverage cans were beginning to be produced in larger quantities and in 1967 that volume swelled considerably when Coca Cola and Pepsi converted to aluminium cans.
The 1990’s
But in the 1990s the growth of demand for aluminium cans began to slow with the market maturing and with PET plastics applying pressure on the soft drink segment and glass increasing market share with the growing popularity of the microbreweries.
In these tough times, can makers have improved technologies to “lightweight” the can by using lighter gauge sheet stock in order to make it more competitive with other beverage containers. In fact, Dunleavy noted that, within the past decade, the wall thickness of the can has been reduced so considerably that its metal content over that time period has been cut in half, while end diameter has been reduced from 206 to 204, and more recently to 202, as a means of reducing the cost of the overall container.
While there continues to be moves to lighten further the gauge of aluminium used in cans, Robin King said, it will only be ever so slightly, as the great weight savings were already made around a decade ago.
Industry Consolidation
In the past 10 years or so Andrew King observed, can makers and can sheet producers alike have undergone a considerable consolidation effort, which has resulted in the surviving companies ‘chasing to get some capacity out of the market.’
Within the past 10 to 15 years, he noted, the number of can makers was whittled down from 18 to four. Likewise, virtually every major brewer had its own can making plant in the early 1980s, but currently Anheuser-Busch is the only brewer that still does so (through its Metal Container Corp. subsidiary). Similarly, the number of can stock rolling mills in North America supplying this narrower customer base has declined from 11 to four, with two - Alcan and Alcoa - accounting for about 70% of the world’s can stock production.
Threats to Aluminium Cans
Recently, however, things have started to improve at least a little bit. The growth of PET and glass for beverage containers has slowed somewhat, Robin King declared, and efforts by certain beer producers to attract consumers to a plastic beer bottle have not panned out. Both Miller and Anheuser-Busch were testing a beer bottle but decided not to pursue it, he said.
Aluminium Can Market Share
Currently, he said, the can has about half of the single service (mainly convenience store but also vending machine) market and 85 to 90% of the multipack market (largely through grocery stores) for soft drinks. For beer, the mix - both for single serve and multipacks - is about 50/50 between glass and cans.
But there is some potential for positive change, and some has already taken root. Recently, Andrew King noted, a couple of brands of bottled water have begun to use cans in small volumes in addition to continuing using plastic bottles. Also, he noted, that some specialty drinks, particularly energy drinks, have been using aluminium cans - not conventional 12 ounce cans, but smaller, 8.2 ounce cans.
This move, the Aluminum Association reported in its “Aluminum Now” magazine, was propelled by the wildly successful "Red Bull" brand of energy drink, which was introduced in the U.S. market in 1997. Since then the market has swelled, with over 30 new brands hitting the market in the last year alone and sales more than doubling to $275 million from $130 million and in the process creating a surge in demand for these smaller cans.
Aluminium Bottles
Also the Japanese have introduced an aluminium bottle, known as the bottlecan - and it has been very successful in that country. Consumers in Japan have embraced it because it is resealable (and resealability has been one of the major advantages of PET bottles over the aluminium can), Robin King said. He added that there could be an aluminium bottlecan in the future in North America as well, even though at this time it has not made it through the development stage.
It is not that aluminum bottles have not been considered before, Dunleavy said, stating, ‘Crown invented the aluminium bottle about 20 years ago. But that was a three piece bottle while today’s technology allows for a two piece bottle.’ As far as whether an aluminium bottlecan is likely to take off in North America as it has in Japan, he stated, ‘There has not been a tremendous demand from bottlers for us to make that product. Most changes are driven by marketing companies and by consumers.'
However, Snapple, reportedly, is launching a resealable, extruded aluminium bottle later this year.
Advantages of Aluminium Cans
Recognizing the need for a marketing push, Robin King said the Aluminum Association has spent about $75 million over the past six years on television advertisements aimed at making consumers aware of the attributes of the aluminium can. The main advantage, he said, is chill and fizz. The aluminium can is the fastest chilling beverage container and is very effective at maintaining the fizz of the beverage until it is opened. Other advantages include stackability, cost, filling speed, the ability to advertise right on the can and more efficient use of shelf space. Also, he noted that aluminium cans contain more than 51% recycled content, which is much more than any other beverage container material. PET bottles, for example only use about 10% recycled content, he said, although there are some moves to increase the recycled content of plastic bottles, including by Coca Cola.,
The Outlook for the Aluminium Can Market
‘We are very positive that the can still has a lot of life in it,’ Andrew King declared. ‘It is a mature market, but it has not shrunk as much as some people thought it would. Companies are interested in invigorating the use of the can and innovation is the way to do that,’ he said, adding, ‘Cans in the future will undergo a lot of changes - graphics shapes, changes in apertures and closures. We need to do everything we can to soup them up.’
Adapting to Change
He said that Alcan has been dedicated to supporting such innovation both through its Applied Materials Center in Aurora, Illinois, and its Kingston Research and Development Centre in Kingston, Ontario. The Applied Materials Center has full pilot-sized can making line that allows the aluminum producer to resolve many of the daily manufacturing issues encountered by the can makers and to allow for quick and accurate results from testing new tooling designs and process modifications in can making. ‘In fact most of the major incremental changes that has occurred in the can industry has been worked on there,’ Andrew King maintained, stating, ‘It is a fantastic resource for customers to go to the production line and make positive changes.’
At Kingston, Alcan is involved in a can modelling and design program that involves tapping a team of scientists, engineers and finite element analysts to work together, simulating the can making process using workstation computers. By creating a “virtual can line,” they are able to identify “hot spots” or locations of potential failure and accelerate the prototyping process required for the evolution of can design.
Recent Innovations
‘The can allows for a lot of innovation,’ Dunleavy declared, stating that some o these innovations have already surfaced. Last January, he noted, Crown introduced its “SuperEnd” beverage can end, which is said to be the first significant innovation in beverage can ends in decades, improving can quality and performance for both beverage fillers and consumers. This new design, Dunleavy said, uses about 10% less metal than prior can ends, but gives the can more pourability and drinkability. “Also the pull-tab is raised at a higher angle, which makes it easier to open, which is especially helpful for children and the elderly.” The SuperEnd is already in commercial use by the company’s beer and beverage customers.
Another innovation, Dunleavy said has been the shaped can, which allow the can to take on a customized shape One example of the shaped can is the Heineken beer can that is shaped like keg, which came out a few years ago. Currently Dunleavy said, several major distributors are test marketing shape cans in the US market.
In fact, Andrew King said, Michelob is test marketing a can that is shaped like beer bottle and that has the Michelob logo embossed right on the can.
Materials
While can makers are always looking for the most effective materials to meet their requirements, Dunleavy said that even these shaped cans have not required any major change in alloys used. ‘The current ones are capable of meeting our needs,’ he said.
The Future for the Aluminium Can
As far as the future of the can Dunleavy stated, ‘I don't know if there is a limit as far as shaping or decoration. The can has been a very flexible mode for marketers over the years.’
Andrew King agreed, stating, ‘It is this kind of innovation that we need (to promote the can). Can makers an beverage makers need to go beyond the 12-ounce can.’
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