One of the most noticeable features of beverages in the last decade has been the dramatic growth in popularity of the metal beverage can. While proponents of the can like to tout features like sustainability and portability as the driving forces behind this, what has really happened is that the can has aligned itself well with some of the most dynamic growth categories in beverages. It is this category alignment that has been the key to cans’ success.
Cans and the beverage categories of the future
Currently, roughly four in every five beverage cans in the Americas are used to contain either beer or carbonates. These two have always been the dominant categories in cans, and will continue to be for the foreseeable future, but they are losing their grip.
During 2022-2027, over a third of metal can growth in the area will come from a non-traditional category
Source: Euromonitor International
The most important is energy drinks, as the only emergent category to have equally strong prospects in both Latin and North America. Established brands like Red Bull have long favoured the can and there is little sign of that changing, as newer competitors like Bang or Zoa appear nearly exclusively in cans as well. Then there is the booming alcoholic RTD segment. Here, there has been considerable turbulence as hard seltzers have given way to pre-mixed cocktails, but both have chosen to appear nearly exclusively in cans, so from a packaging perspective this transition has been largely irrelevant. While growth prospects are strong in Latin America, of countries embracing RTDs, like Mexico, total can growth in the region remains a fraction of that projected in North America (154 million units vs 2.2 billion, respectively). Finally, there is “bottled” water, an increasingly misnamed category as cans grow more prevalent not only in sparkling but even in still in the wake of Liquid Death’s massive popularity in the US.
All of these categories are either functional or aimed at being a healthier replacement to another beverage on the market. It is interesting how cans have successfully portrayed themselves as being an ideal choice for these sorts of beverages, giving them a disproportionate hold over new product launches in beverages (which tend towards the functional and healthier). Notably, much of this growth is also occurring in slim cans specifically, a once-unusual type that is now a favoured choice for products that want to convey an image of wellness.
Beer and carbonates are not going anywhere
This excitement should not distract from the fact that beer and carbonates will remain the core of can demand. They still account for 118 billion cans a year in the Americas, a number that is expected to continue to increase at a regional level. There are limits to growth prospects, long term, for both categories though, from a combination of anti-sugar trends, mindful drinking and pressure from other categories.
Cans can succeed even by doing one or both of two things. One is by ensuring they are well represented in smaller, more vibrant subcategories like low-sugar products, craft, and non-alcoholic. The other is by poaching occasions from rival pack types PET is particularly vulnerable here as it faces increasing amounts of sustainability pressure, yet poaching from plastic may be more difficult than it seems at first glance.
The sustainability question is more complex than it seems
Sustainability is important to consumers, but it takes a secondary priority to their wellness concerns. This is why metal food cans, in contrast to beverage cans, have a dismal outlook despite being equally recyclable. The problem with food cans is that they are associated with highly processed food categories and are thus being dragged down by the larger weaknesses in categories like soup.
Consumers will take the more sustainable option if all else is equal, but they will not act against their personal wellness goals to do so. It will be regulatory pressure that will be the largest threat to plastic bottles, not consumers. California’s ambitious new regulations on plastics are particularly important to be keeping an eye on in this regard. The US’s largest state has mandated a 25% decrease in plastic packaging usage and for the entirety of packaging used in the state to be recyclable or compostable no later than 2032.
Cans and the future of beverages
None of this is to say that the can does not face challenge. The fluctuating price of aluminium, low recovery rates in some countries, and supply chain issues are all potential problems. Nevertheless, the long-term trend line is pretty clear: whatever the beverage categories of the future may be, they are highly likely to be appearing in cans.
For more on trends in sustainable packaging, check out Unwrapping Sustainable Packaging.