Latin America is expected to be a key growth region for metal beverage cans used in the packaging of beer, with an additional 3 billion units expected to be generated over 2013-2018. This is despite the established returnable system for glass bottles characterising Latin American countries, as retail distribution and consumption patterns are both changing. The beverage can, as one-way packaging, enables brewers to stand out on the shelves of new retailing outlets; at the same time, the can is also answering demand from Latin American consumers for more single-serve pack sizes.
Metal Beverage Can Sales in Beer by Region and Forecast Growth
Source: Euromonitor International
Fitting Well with Modern Retailing
Over 2013-2018, the metal beverage can will see its second highest absolute growth globally in Latin America, behind Asia Pacific. Unlike in Asia Pacific, beverage cans in Latin America will see a faster volume sales rise than volume sales of dominant glass bottles. One of the reasons behind the anticipated strong growth will be the fact that beverage cans lend themselves well to modern retailing, which is rising in Latin America, with supermarkets/hypermarkets and discounters tending to use an alternative logistical network to the traditional returnable system.
The region has rather strong returnable rates, with almost half of all glass bottles used in domestic lager sold through retail channels being returnable in Brazil and Mexico. In Argentina, the figure is a solid 93%. While traditional retail outlets still very much operate using this system at local level and sell glass bottles in very standard sizes, larger, more modern stores favour one-way packaging, with international brewers sometimes using a different pack size and/or pack material to differentiate their products on store shelves. This is where the metal beverage can becomes an interesting format compared to the one-way glass bottle, as it is lighter and less expensive to transport.
Meeting Demand for Value-for-Money and Individual Servings
Metal beverage cans are also considered suited to changing consumer behaviours in the region, with value for money still key to the purchasing decision, despite a shift from shared towards single-serve beer consumption. Returnable glass bottles, which work on the basis of a deposit, generally enable beer brewers in Latin America to maintain product affordability and to reach a large consumer base. Returnable bottles are also typically of large sizes (600ml and above), which means fewer of them are in circulation, resulting in fewer being cleaned, refilled and redistributed. These large bottles are typically shared by consumers in the context of a household and/or a social gathering.
Alongside the rise in modern retailers, beer drinkers are also progressively opting for single-serve sizes, with the beverage can often bought on impulse in large cities and increasingly sold in multipacks at hypermarkets and warehouse clubs, such as Costco in Mexico. Argentina stands out as an exception to the rule, with major international beer brewers investing in switching from the traditional 970ml format to the new 1-litre size as a way to differentiate themselves from local players’ brands whilst retaining the returnable glass bottle format.