Aluminum Beverage Cans Market

Market Overview

The aluminum beverage cans market size is anticipated to grow with a CAGR of 3.99% in terms of value during the forecast period

The aluminum beverage can is counted as a beverage container having one of the highest recycling rates. These cans generally have a recycling rate of around 60–65%. However, these recycling rates might differ in the waste collection capacities in the region. There is an increasing demand for specialty cans, in both developed and emerging markets, owing to the increasing awareness about recycling among the manufacturers, policymakers, and consumers. This has led to several initiatives in the lines of the ‘Can Collection Programs,’ which has led to an increase in the recycling rates in this product.

On average, any country can save around USD 1 billion (figures may vary depending on the usage of the can) by recycling aluminum cans. Aluminum cans are preferred, not only because of their high recycling rate but also due to the fact that its recycling uses around 90% less energy and is responsible for an equal amount of lesser greenhouse gas generation. Global authorities and companies are in a bid to reduce their carbon footprint, which is further rising the demand for aluminum beverage.

Market Dynamics

Embossing and Debossing: A World of Creativity

The beverage industry is witnessing rapid growth in the last few years, backed by the high disposable income, rapid urbanization, and changing lifestyles of people. The growing demand for types of beverages in the region has attracted multiple players in the market, resulting in fierce competition. In the present competitive business environment, there is a need to create brand value and improve brand loyalty for the customers. To gain a competitive edge over their peers, the key players are innovating and adopting strategies for greater consumer experience. Aluminum cans allow the beverage manufacturers to portray creativity, which is used to attract consumers, particularly the millennials.

Furthermore, the advent of digital printing technology on cans has changed the beverage can market outlook. Can manufacturers are embracing digital printing technology for the limited-edition products that are launched for a short period? The beverage can producers are providing customers with various techniques, such as embossing and debossing, to accelerate the sales of beverage cans. Many beverage leading brands are inclined towards the techniques for leaving a long-lasting impact on the consumers.

Beverage can manufacturers are offering customers with the latest technologies, enabling them to increase customer engagement during beverage consumption. For instance, Crown Holdings, Inc. expanded its product portfolio through reveal ink for better interaction between consumers and brands. The unique tactile finish, created using an over varnish, changes the appearance and feel of the beverage can. The tactile finish is ideal for creating a frosted or wet look to the beers, flavored water, or hard seltzers. The unique platform offered by beverage cans for creativity and communication is propelling the demand for metal packaging in the beverage industry.

High Recyclability of Metal Packaging over Traditional Materials

Most of the beverage manufacturers across the globe, especially in mature markets, use metal cans as their packaging solutions. The reason behind the high demand for metal packaging is the cause of the high recyclability rate of both the materials aluminum and steel. Aluminum beverage cans are lighter in weight as compared to the steel beverage cans, making it the most viable option. Strict government regulations and legislations to reduce environmental pollution and achieve a healthy environment is a prime factor driving the beverage can market.

The circularity economy process of the metal material is an ideal example of sustainability as it can be constantly recycled. The use of recycled aluminum in the manufacturing of beverages helps save 92% of the energy required to make a new can. As per the figures recorded by the Aluminum  Organization, the aluminum scrap is worth USD 1,317 per ton on average, which is further used in manufacturing beverage cans. However, the value for recycled plastic and glass is USD 299 and USD 20 per ton, respectively. Similar to the aluminum beverage cans, steel cans are also recyclable and can help conserve non-renewable fossil fuels. The use of recycled steel cans helps in curbing the emission of gasses, such as carbon dioxide, into the atmosphere.  

Availability of Pouches and Simpler Packaging for Beverages to Hamper the Market Growth

Today, the packaging industry has evolved, owing to the surging environmental concerns and shifting consumer preference towards sustainability. Packaging plays a pivotal role in the manufacturing industry, particularly the food and beverage industry. Manufacturers are demanding safe and durable packaging solutions for spill-free transportation and reduced logistics costs. To accommodate the growing demand for different packaging solutions, while maintaining environmental standards, the key players are introducing multiple solutions made of different materials. The introduction of smart pouches for beverages with a diverse range of spouts and easy to drink, pour, clean, and environmentally-friendly properties drive the market growth.

Cartons are widely used across the globe for the packing of billions of milk, juices, and other liquid foods. Most of the fruit-based drinks, RTD beverages, and milk-based products are packaged in cartons of different sizes. They help in providing consumers more convenience and the optimum shelf life of the product. Cartons are witnessing a surge in demand as they preserve products for a long time without the requirement of a large number of preservatives. The emergence of eco-friendly plastics packaging solutions for beverages offers advantages, such as less raw-material requirement, lightweight, and large container variety. However, single-serve packaging tube options for wine, cocktails, and spirits for downsized portions and improved recyclability is further limiting the revenue potential of the beverage can market.

Regional Analysis

The U.K. to Be the Highest Share Holder in Europe’s Aluminum & Beverage Cans Market 

Europe is anticipated to dominate the aluminum beverages can market in 2020, by accounting for 38.34% of shares. The beverage packaging trends in Europe is predominantly governed by two factors, the demand for clean label and the availability of non-alcoholic hydration alternatives. Europe has always been at the forefront of utilizing technology to mitigate the effects of greenhouse gases. The food and beverage industry is the largest employer in Europe, while the packaging sector is the third largest sector of the region. These factors ideally place Europe to be the market leader in the production and consumption of aluminum beverage cans. The availability of technology and the presence of developed economies will be responsible for this region’s dominance in the aluminum beverage can market.

In 2017, the aluminum beverage can recycle rate was around 74.5% across Europe. This meant that a total of 4,20,000 tons of aluminum was recycled, highlighting the contribution of aluminum beverage can to the European circular economy. The U.K. is the highest shareholder in the European aluminum beverage can market. Besides, the region’s target of achieving a 75% recycling rate for packaging across all segments will further boost the consumption of recyclable aluminum cans during the forecast period. However, since recycled aluminum can use around 90% lesser energy, its value will face several growth restrictions. This will be compensated by the rise in demand for products possessing high recyclability, in which aluminum beverage cans fit in perfectly.

North America’s Aluminum Beverage Cans Market to Witness a Slump Due to the U.S.-China Trade War

Trailed by the European Market, the North American market held the second-largest share in the aluminum beverages can market. The regional market is governed by the trade alliances formed between the U.S., Canada, and Mexico. Together, the three economies annually account for a trade value of over USD 1.1 trillion. In addition to this, the region is also home to some of the top players in the aluminum beverage can market, such as Ball Corporation, Ardagh Group, Crown Holdings, Silgan Containers, among others

The U.S. and Canada have been allies for the longest time. The level of cooperation between the two economies allows them to stay united and share their expertise in innovation and manufacturing, thus making them competitive on the global stage. Furthermore, the smelting of aluminum is an energy-intensive process, requiring economies of scale, which is the reason why the U.S. turns to Canada as it has world-class smelting assets, along with cleaner and cheaper hydropower. This has helped the U.S. manufacturers to considerably reduce the cost of aluminum production, which represents around 35% of the total production cost of aluminum.

In recent times, the U.S. has increased tariffs on aluminum imported from Canada; in retaliation, Canada, too, imposed heavy duties on the U.S. aluminum products to protect the domestic companies involved in aluminum production. In addition to this, the U.S. is involved in a trade war with China, which has disrupted the global supply chains to a significant extent. This will have a considerable impact on the U.S. imports of aluminum and its prices, which will result in increasing the overall cost of the beverage can.

All these factors are likely to lead to a restriction in the growth of the aluminum beverage can market in North America on account of the U.S. having a considerable market share in terms of consumption and production of beverage cans. However, trade talks are still on the table, and with the election around the corner, it is likely that there will be announcements of incentives and re-negotiation in NAFTA to bring the economy back on track and ensure the maintenance of an integrated supply chain for aluminum. Despite the imports declining in the U.S. for raw aluminum, it remains dominant in North America and one of the largest trade markets in the world.

Aluminum Beverage Cans Market Segmentation

By Product Type

• 2 Piece Can
• 3 Piece Can

By Industry

• Carbonated Soft Drinks
• Alcoholic Beverages
• Fruit and Vegetable Juices
• Tea and Coffee

By Distribution Channel

• Direct Sales Channel
• Distribution Channel

By Region

North America

• The U.S.
• Canada
• Mexico

Europe

• Germany
• France
• The U.K.
• Italy
• The Rest of Europe

Asia-Pacific

• China
• Japan
• India
• South Korea
• Australia
• The Rest of Asia-Pacific

Central and South America and the Caribbean

• Argentina
• Brazil
• Colombia
• The Rest of Central and South America and the Caribbean

The Middle East

• Saudi Arabia
• The UAE
• Qatar
• Oman
• Turkey
• The Rest of the Middle East

Africa

• Nigeria
• South Africa
• The Rest of Africa