Bog standard beverage can sales suffer: Ball Packaging

By Ben BOUCKLEY

- Last updated on GMT

The 355ml/12oz 'standard' can doesn't exactly have the Paparazzi doorstopping it...(Picture Credit: Coke)
The 355ml/12oz 'standard' can doesn't exactly have the Paparazzi doorstopping it...(Picture Credit: Coke)

Related tags Beverage can

Consumers and brands continue to fall out of love with 12oz (355ml) beverage cans as growth accelerates in specialty sizes, according to can giant Ball Packaging.

President and CEO John Hayes said Ball Packaging had to tackle a number of issues in Q2, including addressing unusually soft demand in Europe and the North America for 12oz beverage cans.

Ball’s standard can volumes fell double-digit in the US, but grew double-digit for specialty beverage cans in the region, despite poor weather and economic challenges.

The company reported its Q2 2013 results yesterday, with sales of $2.2bn (-4.35% on Q2 2012) and net earnings of $95.1m (-31.83%).

‘Trim Can’ one innovation

Although Hayes said standard can demand had improved over the past month, he added that Ball stopped producing 12oz cans at its Milwaukee, Wisconsin facility during the quarter.

Ball stopped making 12oz cans at plants in Columbus, Ohio and Gainesville, Florida by the end of 2012, and in July 2011 launched an 8oz ‘Trim Can’ in response to US Department of Agriculture (USDA) guidelines specifying 226ml as a maximum serving for schools.

At that time Ball said a growing number of US states were evaluating and, in some cases, adopting this Federal recommendation to introduce the can, but said it would continue to produce its older 8.4oz offer.

Factors affecting 12oz production include US beer volumes down 2.5%, Hayes said, “the biggest decline we’ve known in a long time”​, while a demographic shift meant older populations were drinking less beer and there was a move towards higher margin categories (i.e. spirits, hard cider).

Beer and CSDs in doldrums

“And as you know, CSDs have been challenged. They’re a little bit more sensitive to economic issues, and I think this payroll tax has hurt them a little more,”​ Hayes said.

In both beer and CSDs Ball’s customers were trying to inject more excitement into their packaging, Hayes said, be it through packaging innovation, placement innovation or new products.

Hayes said yesterday that Ball did not expect to make up the H1 2013 12oz volume shortfalls this year but insisted the firm’s declines were consistent with industry levels of 5% - its higher number was due to contracts lost last year or ones it chose to exit.

The firm is shifting its mix to specialty cans, expected to account for a low-20s percentage figure, in terms of total production, by the end of 2013.

Craft beer success shows 12oz way - Ball

We asked Ball Packaging how much of a problem it saw in the 12oz can weakness. Would always be a place for the high volume, affordable 12oz can, and would Ball always be keen to play in this space?

Renee Robinson, APR manager, Corporate Communications for Ball Corporation, told BeverageDaily.com: "The 12oz can is versatile and affordable, so there will always be a place for it in the marketplace and within Ball.

"New end-market placement strategies, as well as new product and packaging innovations – which we are a leader of – should help drive demand. Our success in the craft beer market is a great example of this."

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