According to industry estimates, the domestic production of aluminum two-piece cans in 2019 will be around 46 billion cans, of which beer is a large consumer of two-piece cans, contributing more than 50% of the share.
Drivers of the increase in canning rate
According to the analysis of the research reports of securities companies and the announcements of listed beer companies, during the new crown epidemic, affected by the following major factors, the domestic beer canning rate has increased significantly, among which the increase in 500ml cans is mainly.
Consumption channels have shifted from restaurants and nightclubs to supermarkets and e-commerce. Before the epidemic, beer was mainly sold in the ready-to-drink market such as catering and nightclubs, and bottled beer in these channels accounted for a large proportion. During the period of severe impact of the epidemic, such as January and February 2020, as the consumption of beer in catering, nightclubs and other channels basically stagnated, the proportion of beer consumption in non-ready-to-drink channels such as supermarkets and e-commerce increased significantly. Supermarket and e-commerce channels mainly sell canned beer.
The production capacity of beer enterprises is adjusted and the transportation radius is increased. As beer companies adjust their production capacity, some breweries that cannot bring economies of scale have been shut down, resulting in an increase in the brewery’s radiation range, that is, the transportation radius, which has promoted the use of two-piece cans. Packed beer has the advantages of convenient transportation and not easy to break.
Glass bottles are not advantageous in terms of cost and shelf life. Compared with cans, glass bottles have a cost disadvantage in the following two aspects. First, the cost of new bottles is significantly higher than that of cans; secondly, the implementation of the new national standard for glass bottles and the stricter environmental protection requirements increase the cost of recycling glass bottles.
In addition, the shelf life of canned beer is much longer than that of bottled beer due to the better light-shielding properties of cans, leading breweries to prefer cans.
The increase in canning rate is the main driving force for the growth of demand for two-piece cans
As we all know, the stable annual increase in the canning rate of the beer market is the main driving force for the growth of the demand for aluminum two-piece cans. Based on the beer output of 37.653 million kiloliters in the Chinese market in 2019, a 1% increase in the canning rate means that it can bring about 1 billion new demand for aluminum two-piece cans.