Plastic, Glass Put Dent In Can Sales Kaiser Responds To Challenge From Alternative Methods For Packaging Beer, Pop

When it comes to holding beer and pop, plastic is shaking up the aluminum industry.

The familiar cylindrical can ousted the glass bottle as the dominant package 30 years ago and has reigned since as king of beer and soft drink containers.

But the crush for cans in North America may be over. Market surveys show even though it’s the same beverage in a new package, people are willing to pay more for unique single-serve plastic bottles.

The average aluminum can is just not exciting enough.

Major soft drink companies are experimenting with plastic containers and beer makers - especially micro-breweries - are moving back to glass. These developments raise the question: does Kaiser Aluminum have the mettle for a new showdown with plastic and glass?

In the United States, while aluminum supplies about half of the beverage packaging market, analysts predict that plastic’s popularity will soar, according to John Sicher, editor and publisher of Beverage Digest.

“In the soft drink business, there has been a tremendous increase by Coke and Pepsi in the use of 20-ounce proprietary packing - Coke’s contour bottle and Pepsi’s swirl bottle,” Sicher said. Both are clear plastic.

People are willing to pay more for drinks in plastic containers, which, at 28 cents a bottle, cost about four times more to produce than aluminum cans.

That’s bad news for Kaiser’s Trentwood plant, which produces 60 percent of its flat-rolled aluminum for the can industry.

“Clearly we’ve got a new challenger out there,” said Steve Bettcher, vice president of can stock sales and marketing for Kaiser.

The beer industry is moving toward glass, said Gary Lile, president of the National Beverage Packaging Association and director of packaging at Anheuser-Busch Co. “In most cases, it’s eating out the aluminum can part of the business,” he said.

The aluminum industry, 15 percent of which is metal for cans, is rising to the challenge. For example, Anheuser-Busch is test marketing etched aluminum Budweiser containers in Japan and the Midwest.

“There are a lot of options out there,” Lile said.

And the latest 12-ounce aluminum Coke can is taller, thinner and shaped to mimic the classic glass bottle.

“The standard aluminum container is a round cylinder,” Lile said. “Anything you can do to change that will make your product more interesting.”

Tests show the new Coke can is a hit.”Consumers have been very excited about the package,” Kaiser’s Bettcher said. “Some have even said they thought the product tasted better.”

Even with the innovative aluminum packages, “… we’re looking at a can market in the United States that is not growing in the way it was five or 10 years ago,” Bettcher said.

And while the aluminum can market in the United States seems flat, hope lies outside the nation’s shores as the major soft drink companies push into South American and Asia. They’ll need cans rather than plastic bottles.

“You’re in tropical climates and the aluminum can tends to hold up better,” Bettcher said. Beverages in the plastic bottles have a shelf life of 10 weeks, while aluminum, which is less expensive and easier to store and transport, will keep the integrity of the drink for up to a year.

Kaiser recognizes that potential and today ships aluminum to 36 can plants outside of the United States: as far south as Brazil and west to China, Korea and Taiwan. The export portion of Trentwood’s total sales has grown to an estimated 27 percent this year, up from seven percent in 1992.

“Cans will, for years to come, remain a staple of the beverage industry,” Sicher said. “They’re easy to handle, they’re easy to pack and they hold carbonation for a very long time.”

, DataTimes