Increased Beer Demand Causes Can Shortages

Breweries pivot to packaging, face supply challenges

By Micah Drew
Canning at Kalispell Brewing Company on August 6, 2020. Hunter D’Antuono | Flathead Beacon

Breweries have been dealing with an increased demand for empty beer cans during the Covid-19 pandemic, as more consumers have opted to buy beer to drink at home.

When businesses in Montana shut down in March, kegs became virtually worthless and taproom sales dropped off.

“Anything out of a tap was almost nil until we entered phase one,” said Jon Hartig, director of brewery operation at Flathead Lake Brewing Company. “There were zero draft sales.”

Roughly half of FLBC’s beer production goes into kegs for restaurants and taprooms, so the brewery had to scale back and concentrate on the volume they expected to be able to sell in cans off-premise.

“Initially we were unsure; it was unclear how the market would be,” said Hartig. “Then we saw an increase in the off-premise market and our challenge was trying to can fast enough to keep up with distribution demand.”

All breweries in the Flathead have similar stories. In Lakeside, Tamarack Brewing Company is still down 30% on draft sales for the year through the current phased reopening. However, their packaged sales are nearly 40% higher than they were last summer.

“We’re canning a heck of a lot more than we used to and it’s not the most fun to can,” Tamarack distribution manager Colby Shaw said. “It’s not that hard, but it’s time consuming.”

Tamarack went from doing canning runs twice a week to four times a week, doubling its output to around 1,400 cases of beer a week. Three additional workers were brought on to keep up with the demand. 

Tamarack has felt the can demand shortages less than other breweries because they use 16-ounce cans, which are less ubiquitous than the traditional 12-ounce ones used by breweries, soda companies and seltzer makers. Still, only two factories on the West Coast produce them, so a single maintenance issue could backup their supply by weeks, according to owner Josh Townsley.

Despite the increase in production and packaged sales, Shaw said that overall revenue on the beer side is pretty much a wash. The overhead on canning is much higher than drafts, between purchasing cans and lids, and costs for label artwork.

These costs can be prohibitive for smaller breweries that had to quickly pivot to stay afloat.   

Sacred Waters Brewing in Kalispell got a lucky break by purchasing a supply of cans from Great Northern Brewing when the Whitefish company closed this winter.

The company partnered with Montana Canning Company (MCC), a mobile company based in Missoula to do their canning runs.

MCC primarily cans for Bayern Brewing, but when the shutdown began they immediately got in touch with the Montana Brewers Association to connect with smaller breweries and began criss-crossing the state to help out.

“Between Kalispell, Missoula, Helena, and Livingston, we put more than 2,000 miles on the truck just in June,” owner Naomi Gerheim said.

The mobile canning allowed smaller companies a way to enter the packaged market without the high overhead cost of purchasing their own canning line.

To help breweries recoup the lost taproom revenue, Montana altered several laws that govern breweries, allowing them to offer curbside sales and delivery of packaged beer for the first time. 

“When the state bent the rules, and made us able to sell out of the tasting room in our display cooler, our six-pack sales in the tasting room have more than tripled,” said Cody Nickel, general manager at Kalispell Brewing Co. (KBC).

In addition to handling pandemic-driven increases in packaged sales, KBC began distributing across the Divide this summer, further increasing the necessary output, but has been able to keep up so far.

“We’ve done a fairly good job at balancing the curve balls and we haven’t run our distributors out of beer yet,” Nickel said. “We had a contingency plan in place in case we got a huge spike in demand that we couldn’t meet, but we haven’t had to use it yet.”

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