Market Trends of Latin America Beer Cans Industry
This section covers the major market trends shaping the Latin America Beer Cans Market according to our research experts:
Aluminium Can to Hold a Significant Share in Brazil
- Beer is one of the significant alcoholic beverages consumed in Brazil, with approximately 14 million km/year, and it is among the top-five beer producers in the world. Almost 98% of beer consumption in Brazil is light beer.
- In the Latin America market, Brazil contributes to the growth of metal cans through the presence of 889 registered breweries, with the country producing 16,968 products (mainly contributing cans and bottles), approximately 6,800 of which were registered in 2018 as per the Ministry of Agriculture, Livestock, and Food Supply (MAPA). This significantly raises the production of aluminum cans.
- Further, Abralatas (the Brazilian Association of Aluminum Can Manufacturers) represents the interests of Brazilian can manufacturers, most notably Ardagh, Ball, Can pack, and Crown Embalagens. These can-makers are getting rapid growth in demand for aluminum cans from the brewing sector. Moreover, as per demand from major breweries, Brazil has a surging demand for cans for packaging craft beers. In recent months in 2019, more than 300 new breweries were launched in Brazil.
- However, the currency fluctuating in Brazil is also likely to affect the beer can market, as many companies have their manufacturing facilities in the country. For instance, in 2019, the Netherlands-based Heineken NV’s shares fell the most in almost four years, after the company reported earnings growth that nearly came to a halt and was held back by costs for aluminum cans manufactured in Brazil.
- The country is also initiating recycling projects for metals cans due to the increased adoption of these cans. For instance, in February 2021, Trivium Packaging announced a recycling initiative in Argentina by partnering with urban recycler organization Creando Conciencia to increase the recollection and reuse of aluminum cans. The partnership will help the company become one of the first in Latin America to use post-consumer recycled (PCR) aluminum to develop its packaging products.
- Similarly, in October 2021, Ball Corporation also announced to build one of its first circular economy labs in Brazil with a centralized location for the collection and recycling of aluminum cans. According to the company, the lab will demonstrate the possibility of creating a circular economy in Brazil and contribute to a sustainable planet by constructing innovative and effective ways to collect beverage aluminum cans.
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Aluminum Cans to Witness Significant Growth in Craft Beer in Mexico
- The demand for Mexican craft beer at home and abroad, aided by innovative marketing, is driving massive growth in the country’s independent beer industry, with production increasing by more than 50% every year. In terms of beer production, Mexico accounted for nearly MXN 185.38 Billion from sales of Beer in the country. This potentially also raises the production of craft beer, by which the demand for aluminum can significantly increase.
- Mexico is also driving various partnerships and expansions owing to the increased demand. For instance, in January 2021, Constellation Brands planned to invest USD 1.5 billion for the construction of a brewery on the border of Mexicali as Mexican beer brands showed staggering growth in the United States. Such developments are encouraging the market vendors to increase their production capacity with sustainable and eco-friendly metal cans for the beer industry.
- Beer manufacturers are increasing production in Brazil owing to the increased consumption. The resultant is the growing manufacturing plant projects for the market vendors in the region. For instance, in March 2020, Heineken planned to invest BRS 865 million to expand its brewery in Brazil.
- The advantage of an aluminum can is that it is an airtight hermetic seal, which provides temperature regulation and prevents premature spoilage from heat, light, or oxygen and is critical for preserving the flavor profile of craft beer, which facilitates on-the-go, convenient consumption. Further, the bulk of unit volume growth from 350 ml and 269 ml beverage can format made up of aluminum, including craft beer packaging, which is significantly driving the market in the Mexico region.
- Furthermore, the player is opening their metal can production expansion with a growing demand for beer, including craft beer. In the past year, Crown officially opened its new beverage can plant in Monterrey, expanding its operations in Mexico and supporting the growing demand for metal packaging from consumers and brand owners. The plant, the Company’s fourth beverage can facility in Mexico, supplies aluminum two-piece beverage cans in multiple sizes to customers in the region experiencing dynamic economic expansion.
- The growth in the craft beer segment is also developing demand for beer cans in the country. According to Acermax, a Mexican brewers’ association’s estimations, there are currently over 600 independent breweries in Mexico. In addition, the exclusion of aluminum and steel tariffs from the US Canada and Mexico Trade Agreement also contributes to the growth of the market for beer cans in the country as it excludes can manufacturers in the export or import of aluminum or aluminum cans.
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