Ball said it will now ask customers who don’t have a contract – includes many smaller breweries – order no less than five trucks (approximately 1.02 million cans) of each of their drinks starting January 1. The previous minimum purchase was one truck per product.
Additionally, starting in 2022, Ball wrote that it will no longer be able to store excess cans from those non-contracted customers in its inventory, and The price per can will increase by nearly 50% for at least some customers without a contract, according to notices sent to the breweries.
News there are many small breweries in the area scrambling to secure cans and has fueled concerns about higher costs, reduced assortment and higher prices for consumers.
Garrett Marrero, chief executive officer and co-founder of Maui Brewing Co. in Hawaii, said: “I really consider this an economic killer and most certainly most small brewers will have to raise prices significantly or rethink their whole model. .
In letters, copies of which were provided to CNN Business, Ball wrote that demand for aluminum cans continues to outstrip supply.
“Ball is investing to add more capacity online, and in the meantime, we remain in a highly constrained supply environment for the foreseeable future,” according to the letter. “This environment is making it difficult for us to deliver the quality customer experience customers expect from Ball, and we’re making some adjustments to the way we do business to remedy that.”
With less than six weeks until the new year, hundreds of craft brewers will no longer be able to buy their pre-printed cans directly from Ball and will instead have to secure one of the key ingredients. most of their business operations from new sources, says Bob Pease, president and chief executive officer of the Brewers Association.
“This is still fairly new, so we’re still trying to gather information from members who are affected,” Pease told CNN Business.
The Brewers Association is weighing its options and looking into contacting policymakers, Pease said, and hopes to speak with executives at Ball, a longtime member of the group. years, he added. On Friday, Pease said he had received feedback from Ball’s senior leadership and that the two sides were working to set up a meeting in December to discuss the recent changes.
Ball isn’t completely giving up on the craft beer industry, a company spokesperson told CNN Business.
“The new model will increase our overall efficiency and allow us to actually produce more cans for our contracted customers, including craft brewers,” a spokesperson for the company said. Ball, Scott McCarty wrote in an email.
McCarty added that Ball is building five plants in the United States to produce more cans, adding that “each year, we evaluate supply and demand and will continue to invest where it makes sense.”
As a potential solution for customers who can’t meet the raised minimum, Ball has provided contact information for four distributors who can take smaller orders, stock and deliver labeling options such as stickers and shrink film.
‘It will force us out of business’
When Upslope Brewing Company launched in Boulder, Colorado in 2008, it was one of the few craft brewers to pack their beer only in aluminum cans.
“My first phone call about cans was to Ball,” co-founder Matt Cutter told CNN Business. “They said, ‘Fine, you can buy a truck. “
That is not possible for Upslope, a business with The start-up capital came from the Cutter’s second mortgage. But a few years later, when Upslope’s snowmelt was consumed throughout the Mountain West, it was certainly possible.
“And Ball kept knocking on our door,” he said.
Ball, also a Colorado-based company, has a canning facility right on the highway and offers services like cheaper storage and shipping. Upslope, having bought his cans by truck from Ball since 2014, now feels abandoned in the cold.
Cutter is concerned that the higher costs – including raw materials, storage, and any additional profits from working with new distributors – could eventually lead to the handcrafting of the six packages sold at stores are $1 to $2 more expensive next spring.
Ultimately, he said, these higher costs may not be sustainable for smaller businesses.
“As craft brewers, we don’t falter here,” he said. “We can’t absorb this. It will force us to go out of business.”
In Pueblo, Colorado, one of the co-founders of Walter Brewing Co.
Walter Brewing purchased cans for Walter’s Original Pilsner and Walter’s Pueblo Chile Beer from groups purchased from Ball, as well as directly from Ball.
“It will take us more than a year to go through [a truckload]”, said Andy Sanchez, one of the co-owners of Walter Brewing.
Compulsory New Year trucks do not say.
“With six weeks’ notice, there’s a lot to digest in that short amount of time,” says Sanchez. “It will be crucial for all microbreweries if Ball rethinks its path and can think of ways to mitigate the short-term impacts.”
Maui Brewing, because of its scope Marrero said operations in Hawaii, and close ties to the Ball’s factory there, should be relatively insulated from major disruptions. However, he is concerned that breweries in the Mainland and Maui Brewing’s efforts to expand production there face complications.
He worries that brewers unable to float the costs of switching suppliers will be forced to change operations, close or merge. He said he was also worried this could lead to greater use of less sustainable materials, such as plastic labels.
“This will create a paradigm shift in craft beer in the future,” he said.
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