EconomyFinancial"Without a bottle there is no beer": the lack...

"Without a bottle there is no beer": the lack of glass hits the artisans

Craft brewers are also hit by supply chain disruptions and have been experiencing a shortage of glass bottles since last year. The first consequence has been gaps in production and lower product sales.

Artisanal producers have chosen to stop their production, as one of the first measures to deal with the shortage, which seems to be one of the problems that will continue this year.

Alejo Magallanes, president of the Mexican Brewing Association (Acermex), explains that a large number of producers buy bottles from Owens-Illinois, a company that has been affected by the shortage of glass in the world. This has pushed them to look at other providers, such as Fivsa, a company located in Mexicali, Baja California.

“I have been talking to suppliers, as president of Acermex, to have a little light, because without bottles there is no beer and the shortage of glass can stop us all,” says Magallanes, who is also co-founder and director of Cervecería Loba . “It has been an ordeal, it is an issue that comes from the pandemic and from what is happening in China, and that is hitting us harder and harder and the outlook does not look better,” he says.

The rupture in the supply of glass is a situation that has been generated in China, where the suppliers of this raw material have had to stop production to comply with the regulations that the government has imposed on companies to meet goals. to mitigate their negative impact on the environment.

In the craft industry, 71.47% of the product is packaged in a 355-milliliter glass bottle, 25.09% in a returnable barrel, 1.03% in a non-returnable barrel, 0.69% in a 600-milliliter bottle or can, and 1.03% in others. , according to the latest data from Acermex.

Considering the large beer groups, 40% of the liquid is packaged in non-returnable bottles, 23.9% in returnable and 36.2% in cans, according to data from the National Chamber of the Beer and Malt Industry (Cerveceros de Mexico), an association that was not available to address the issue until the time of publication of this note.

Rodrigo Moncada, general director of Cervecería Allende, explains that they made consolidated purchases of containers to have in advance. However, they were unable to avoid production stoppages, which led to a 25% reduction in brand sales over the past year. “We can’t plan the stoppages, because the suppliers didn’t know when they would have containers available either.”

Added to this is the shortage of hops and malt that some breweries face and, although it has not yet had an impact on its price, the import of the input is affected by the rise in the cost of logistics in the world. Meanwhile, Acermex expects an exchange rate impact in the short term, given that purchases are made in dollars.

And although the shortage of glass bottles has raised their price, producers do not project an increase for final consumers. “We are holding the price, although our direct margin is being diluted, because consumption is barely recovering after the closures and confinement and, if the price rises, sales could fall. […] We are going to see how many brewers can eat that increase and which ones have to make an adjustment, although the general feeling is not to pass the ticket on to the consumer”, says Magallanes.

They go for the can

With the lack of packaging, craft beer producers have turned to an old but reliable input: cans, which have also suffered shortages and price increases due to the shortage of aluminum. Although the plan is to diversify.

Moncada, from Cervecería Allende, says that several producers are already diversifying their portfolio to add canned presentations, so having both containers will be one of the options in the short term.

“The Mexican market for craft beers is not used to canned beers, but little by little we will begin to change, not 100%, but an important part of the production. The supply of glass in Mexico is limited and you have to look outside the country, which raises costs,” he says.

And while consumers aren’t taking a swipe at cans, or even buying beer in returnable tanks, it’s restaurants where some resistance to aluminum cans could be seen. “This may be an accelerator to switch to can, although we are not totally ready. High-end restaurants don’t want to have a can of beer at their table, because of the stigma left by large beers that this is cheap beer and of lower quality,” says Magallanes.

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