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Beer To-Go Is Fueling A Can Shortage And Stressing Out Colorado Brewers

Matt Bloom/KUNC
The taproom at the Cheluna Brewing Company in Aurora has converted to a mostly to-go operation. Employees fill hundreds of 32-ounce "crowlers" each week by hand.

Never before has Javier Perez cared so much about cans. At his craft brewery in Aurora, he tracks his inventory carefully every day, never letting it get too low. During the pandemic, his business depends on it.

“If it weren’t for cans we would have died,” said Perez, who opened the Cheluna Brewing Company with his wife, Jennifer, in 2016. “We lost deep into the 90% of sales when this building was closed.”

Gone are the days of packed taprooms for sports games, trivia nights and live concerts. Now, even though some in-person business has returned, Chelulna and other small craft breweries are reimagining their businesses to quench a surge in demand for to-go orders. Canning beer is seen as the cheapest and easiest way to meet the need.

But the sudden switch is also fueling a national can shortage. The explosion of to-go drink sales at bars and restaurants has added to the can-buying frenzy, with some industry groups warning that businesses seeking cans may be left empty handed.

The pandemic is to blame, as is a years-long shift to cans as Americans’ preferred beverage container on top of a lack of U.S. manufacturing capacity, according to a July report from the Brewers Association, a Boulder-based industry group.

Manufacturers, including Broomfield-based Ball Corp., have in turn announced plans to build massive new can factories at record speed. Still, demand could outpace supply “through next year or possibly longer,” the Brewers Association warned.

The situation has added to the stress of an already unpredictable year for all types of small businesses in Colorado and around the country. Hundreds of breweries and restaurants have already closed their doors permanently, according to counts from industry groups. More are expected to fold in the coming months.

Matt Bloom/KUNC
Jennifer Perez (left) and Javier Perez (right) carry out a transaction on their cash register. The couple has worked hard to keep the community feel and character of the brewery alive despite health restrictions around the coronavirus pandemic.

In Aurora, Javier and Jennifer Perez haven’t run out of aluminum cans yet. But one time they got down to just 10.

Upon making the realization, Jennifer Perez called the brewery’s supplier and “begged” for a box of cans. She jumped in her car and drove 45 minutes to Longmont to pick up whatever size box they would sell her.

“It’s anxiety provoking,” she said. “We’ve learned to be very patient and persistent.”

The couple says the shortage has been the hardest on small, local breweries, which depend on middlemen to supply their cans. Whereas national craft chains, like New Belgium Brewing, can afford to buy wholesale directly from manufacturers.

Small brewers also typically lack the large machines and assembly lines used to can beer. At Cheluna, each 32-ounce can of beer is sealed by hand with a special machine behind the bar. They sell for $10 apiece.

Data is lacking for the exact volume of cans sold in Colorado taprooms since the start of the pandemic, but year-over-year retail sales of canned drinks jumped 24% in March, the Wall Street Journal reported. Sales have remained high ever since.

Can suppliers warn many brands may be dangerously close to being out of stock at stores due to manufacturers’ inability to keep up.

Matt Bloom/KUNC
An employee tends to cans inside Crowler Nation's warehouse in Longmont. The can supplier caters mostly to smaller breweries and restaurants, since ordering wholesale from manufacturers is expensive.

Jeremy Rudolf, vice president of operations at Crowler Nation, Cheluna’s supplier in Longmont, said this spring sales shot up to “37 times” last year’s levels. Demand has come down a little through the summer, but warehouse staff are still working overtime to keep up.

“We’re taking old cans that are off-brand and instead of scrapping them, we’re actually covering over them with a new label and sending them out,” Rudolf said. “I think we’re at the lowest point (of demand) it’ll be.”

Colder weather and a potential spike in COVID-19 cases could cause another rush of can-buying from breweries, Rudolf said. To be prepared, Crowler Nation recently invested in a six-month supply of some types of aluminum cans.

He hasn’t turned buyers away, but the company is warning its customers may have to wait between one and three weeks due to the large volume of orders.

The mostly behind-the-scenes scramble for cans hasn’t translated into huge jumps in the price of beer. Rudolf said that’s because the raw aluminium used to make cans isn’t in short supply -- only the manufacturing power.

Matt Bloom/KUNC
Jeremy Rudolf, vice president of operations of Crowler Nation, holds a golden crowler can inside the company's warehouse in Longmont.

At Cheluna, Javier and Jennifer Perez say they don’t plan to raise beer prices yet. They’re more focused on keeping their regular customers engaged enough to pay the rent and their four employees.

“With work ethic and community support, my hope is that we make it through,” Jennifer said.

The brewery recently participated in a national “Black is Beautiful” charity campaign, which featured a chocolatey oatmeal stout. Proceeds went to local groups supporting police reform and legal expenses for “those who have been wronged” by law enforcement.

They’re hosting virtual trivia nights and even delivering beer to customers’ homes for the first time ever.

Javier Perez has also trimmed back on the variety of beer he’s selling. Instead of investing time and energy into creating new flavors, he’s focused on brewing large batches of customer favorites, including “Chilango,” a Mexican twist on German-style beer with hints of mango and habanero chiles.

“We have to keep customers coming back,” he said. “If we don’t have it, they have a lot of options from large international conglomerates to breweries that are just a couple miles away.”

Matt Bloom/KUNC
Jennifer and Javier stand inside their brewery. The couple opened Cheluna in 2016 after moving to Colorado.

Regular customers say they want to support the brewery, but are still reluctant to sit down and hang around a large crowd of people.

Matt Cohen, a lawyer who lives nearby, says he comes by to purchase cans every couple of weeks.

“I worry for these small businesses,” said Cohen. “Especially in November, December, January when they can’t have outside spaces open.”

The Perezes anticipate cans and to-go sales will be even more important in the colder months ahead. They constantly worry about running out and having nowhere to get more.

To prevent that nightmare scenario, they recently bought a stockpile of 1,200 cans. Javier Perez keeps them locked in a storage space on-site. Now he can worry a little less.

I cover a wide range of issues within Colorado’s dynamic economy including energy, labor, housing, beer, marijuana, elections and other general assignment stories.