The 13,000-year-old beer industry is facing a new revolution in packaging. Previously, beer manufacturers developed packages to mainly achieve primarily to contain the beer, protect the quality of the beer from deteriorating, enhance convenience of use by the consumer, and differentiate the beer brand from its competitors.
Although these functions remain the fundamental reasons behind beer packaging, a new trend in the name of sustainability has joined the block and is revolutionizing the way the drink is being packaged around the world. Today companies are thinking on how best to make their products either recyclable or compostable. Sustainable packages have also been found to be a great selling point.
According to a study by Innova Insights, packaging – and its impact on the planet – was now regarded as a key purchasing consideration for many global consumers. Furthermore, 61% of Millennials are likely to pay more for eco-friendly or sustainable products, according to Global Web Index. Brands are thus finding a competitive advantage in using sustainable packages and are working with suppliers to push the limits of beer packaging innovation.
Without further ado, lets dive into the innovative trends shaping the beer packaging industry in 2020 and beyond.
Trend I: Obliterating plastics from beer packaging
Although a small percentage of beer (less than 2%) is packaged in plastic bottles, a significant quantity of plastic packaging is still used in the beer industry, particularly in secondary packaging such as plastic film wraps and plastic rings. These inventions, once seen as revolutionary, have fallen out of fashion largely due to their negative impact on the environment. The rings being non-biodegradable usually end up in the ocean and have been flagged by environmentalists as “a particularly dangerous form of marine litter” due to their aptitude to entangle or strangle marine animals.
Plastics in beer packaging are now being obliterated in favour of more biodegradable solutions. A small craft beer brewery named SaltWater in the US has for instance come up with a new alternative to plastic rings: a biodegradable, compostable and, most remarkable, edible six-pack ring. Yes, fish, birds and turtles can eat it! It’s made from wheat and barley, by-products of the brewing process.
Major breweries globally have also joined the bandwagon with their own alternative solutions. Barcelona-based global brewer Estrella Damm is testing 100% biodegradable natural-fibre cardboard six-pack holders. If successful, it plans to use them in the 85 countries in which it operates, eliminating 89 million plastic pack rings. In 2019, Carlsberg announced it would glue its multipacks together to cut the amount of plastic it uses by more than 75%.
Most recently, Graphic Packaging International introduced KeelClip™, a packaging innovation to help brewers optimally package their products. The solution, which consists of minimal recyclable paperboard material that clings on top and wedges between can multipacks, has already been embraced by AB InBev, where its Budweiser brands in the U.K. market, such as Bud Light, are now packaged with the new KeelClip. Other companies outside beer industry such as Coca-Cola have also adopted the solution, and one can expect the trend to be widely adopted in the beverage industry in the next few years.
Not wanting to be left behind, Molson Coors Beverage Co. introduced in August 2020 a set of new global packaging goals to reduce plastics in its packaging, aiming for 100% of its packaging to be reusable, recyclable, compostable or biodegradable by 2025. The brewer talks of sustainable packaging strategies and tactics including 3-layer plastic bottles, paper sleeve cartons, fiber-based multipack rings and more. The company also seeks to achieve at least 30% recycled content in its PET bottles, plastic film wraps and plastic rings.
Trend II: Replacing glass with cans
Aluminium cans have been commended as a superior packaging material and their use has grown considerably in recent years due to distinctive features such as being lightweight, stackable and strong, and therefore allowing brands to easily package and transport more beverages whilst using less material.
Its ability to be recycled over and over again in a true ‘closed loop’ process has particularly made it a darling for beer manufacturers and companies looking to promote their products while meeting environmental goals.
In recognition of the advantage that canned beer has over glass beers, Molson Coors during its recent rebranding in the UK and Ireland announced that it would sell three of its biggest beer brands in aluminium bottles, with the transition enabling it to reduce total packaging weight globally by 21% (~141,000 tonnes).
Although the shift towards beer had been gradually taking place, the Corona virus put Aluminium cans into a new growth pedestal, with more consumers preferring canned beer to glass given their convenience as take away options. The demand has been so explosive that it exceeded supply, causing a shortage of cans for nearly all beer manufacturers. In some cases, beer makers such as Molson Coors, Brooklyn Brewery, and Karl Strauss suspended output of products that sell in low volumes, so they can focus on their best sellers. Closer home, East African Breweries Ltd, the largest brewer in the region was forced to package bottled beer brands in carton packs of six following a shortage of aluminium cans. The brewer has also taken into cognisance the importance of cans, expanding the range of its canned beer products during the pandemic, with almost all its premium and mainstream beers now available in can packaging as well.
The Corona Virus stimulated demand seems to have accelerated the growth of the Aluminium cans market, which was projected to grown at a CAGR of 3.2% between 2020-2025, according to Mordor Intelligence. Can manufacturers are now playing catch up as they race to ramp up their production capacities. US leading can maker Ball Corp. recently announced it is set to open two new plants in the country by the end of 2021 and add two production lines to its existing US facilities. In Asia, Japan’s Showa Denko opened a new 7-billion-yen factory in southern Vietnam in July, and is expanding existing plants in northern Vietnam and Thailand. The company says it will increase annual capacity in Vietnam to 3.3 billion cans by the end of 2020, up 150% from 2017.
Trend III: Beer in paper-based bottles
Perhaps the most groundbreaking trend in beer packaging is the gradual shift towards paper-based bottles, as viable alternatives to the bulky and fragile glass bottles.
In October 2019, Danish multinational brewing company Carlsberg debuted what it described as the “world’s first paper beer bottle” made with sustainable and recyclable wood fibres. The launch by Carlsberg sounded like a clarion call for beer manufacturers to become more innovative in their packaging. In July 2020, British multinational brewing company Diageo announced a partnership with Pulpex Limited that will see it distribute some of its alcoholic beverages in paper bottles “made from sustainably sourced pulp and designed to meet food-safety standards.” Diageo further noted that the bottles are expected to be fully recyclable in standard waste streams.
Although Diageo is expected to debut the paper bottle with Johnnie Walker in early 2021, it’s expected that as technology advances, the alcohol major’s beer line, which include popular brands such as Guinness, will also be packaged in sustainable bottles in future, in line with its goal of using sustainable packages “all of which will be widely recyclable, by 2030.”
Trend IV: Active Packaging in Beers
“Fresh” is one of the factors defining better beer, with beer manufacturers always aspiring to find ways of keeping their bottled beer fresher for as long as possible. Zythology (the study of beer and beer-making) says that to guarantee a better beer quality, it is important to control the amount of oxygen in the bottle.
In pursuit of beer excellence, Carlsberg invented the Zer02 cap, a scavenger layer in the liner underneath the cap that absorbs oxygen in the bottle, partially preventing the oxidation process, and thus keeping the beer fresher for longer.
Given its advantage in making beer last fresh for longer, the innovation debuted by Carlsberg will undoubtedly spread across the entire beer industry with more brewers expected to embrace the trend in an effort to keep their beer fresh for longer.
Trend V: Transparency in Labelling
As health-conscious consumers gain more access and better understanding of product information and choices, companies are being pushed to produce information that is clear, concise and transparent in order to promote trust between the consumer and the brand.
Overtime, companies have started putting clear labels of calorie contents on alcohol beverage packaging, in an attempt to tackle obesity within the UK. This trend in package labelling is expected to even grow further following joint proposals submitted to the EU by the drinks industry to ensure that nutritional information will be available on all beer, wine and spirits sold in the block by 2022.
Moving into 2021 and beyond, sustainability is expected to continue being the major driver of innovation in the beer packaging industry. This is more so due to the fact that companies are working round the clock to meet ambitious sustainability goals. Consumers are also becoming increasingly aware of the impact that packages have on the environment and as shown above, are more likely to embrace sustainable products, even when they cost more than their alternatives.
Further, intensifying regulatory demand is driving the transition to more eco-friendly packaging. Notable examples include the EU’s single-use plastics ban and, more recently, its Circular Economy Action plan, which prioritizes the reduction of excessive packaging and packaging waste, and China’s strategy to phase out a broad array of single-use plastics by 2025.
In East Africa, Rwanda recently expanded its ban on all other types of single-use plastics, such as straws, coffee stirrers, soda and water bottles, plastic cutlery, balloons and almost all food packaging. Beer manufacturers in the country – such as Bralirwa and Skol Brewery – are lobbying for the establishment of a local glass manufacturing facility in the country as well to reduce their reliance on imports.
It would be thus safe to say that companies that do not jump into the sustainability bandwagon when it comes to packaging will certainly have a lot to lose in the few years to come.