Debt crisis fails to halt the progress of cans in Europe

The latest figures released by Beverage Can Makers Europe show can fillings across the region remain in surplus for the year despite the gathering clouds of the European debt crisis. With stock markets tumbling and uncertainty gripping the region, BCME reports that use of the can in the beverage industry has increased by 4% in the year to date to September 2011. Use of the can for soft drinks is up by 6% and beer 2%.

The rate of progress has slowed in the third quarter, something that is attributable to less favourable weather conditions in many key markets during the summer and a slowdown in growth of overall regional beverage demand. The can continues to outperform the total beverage market gaining share on other packaging alternatives.

The unit rise for soft drinks is particularly strong this year, once again highlighting the healthy performance of the energy drink category where the can predominates. The upward trend is also underpinned by the popularity of the can multipack in many markets. Europeans are enjoying the single-serve format at home at the expense of the so called ‘share sizes’ found in other packaging options. It is Western Europe that is driving demand for soft drink cans; in Eastern Europe, a drop in soft drinks can fillings in Romania, Bulgaria and the Ukraine has concealed strong results in other markets and prompted a small downturn.

The 2% beer can unit increase in the first three quarters in Europe comes against a backdrop of stagnant overall beer sales in the region. Beverage research agency Canadean, anticipate beer growth of just 0.1% in Europe for the full year. The can performance comes despite a decline in demand in the region’s biggest beer can producer, the United Kingdom; beer can units in the UK have dropped in the year to date to September 2011 by nearly 6% offsetting the strong soft drink can growth. The UK accounts for more than one in every six beer cans filled in Europe, but has been hit by a very depressed beer market. The market has been effected by above inflation tax increases and the fact that cans enjoyed considerable success during the Soccer World Cup in the comparable year. Despite this, cans are expected to continue to take share from other formats in the UK beer market in 2011. Use of the can for beer in the year to September is on the up in both Western Europe (+0.8%) and Eastern Europe (+5%) but growth is weighted in favour of the East which accounts for a little more than a third of regional production. The beer market in Eastern Europe remains on an upward curve this year in spite of the deteriorating economic outlook.

With the on-going debt crisis in Europe, the current trading environment remains far from stable and this will be an influential factor in shaping refreshment patterns in the remainder of the year. The BCME results suggest that the can is well placed to ride the storm.

A warm spring and the expectation of summer helps lift can sales in Europe in 1H

The European economic climate may remain uncertain with the recovery showing signs that it is losing momentum, but it was the warm weather in many markets in quarter 2 that raised thirst levels and drinks demand in the first half of 2011. The hot spring weather across much of the region was good news for beverage packaging manufacturers and this was reflected in the jump of 6% in unit sales reported by the beverage can industry association Beverage Can Makers Europe.

Soft drinks were the main benefactors of the good conditions and BCME figures show a healthy increase of 8% on the comparable period in the first half of 2010. Of course carbonated soft drinks enjoy hot conditions but the irrepressible energy drink category has made another valuable contribution to the performance. The beverage can is generally the standard format for the energy drinks category and is consequently a major benefactor of the continued double digit success of the category. The category remains in the growth stage of its lifecycle and this bodes well for future prospects for both cans and energy drinks.

The economic anxieties of recent times have meant that it has been difficult to sell beer as drinkers shun Europe's restaurants and bars. BCME however reports a very encouraging rise in unit sales of between 2 and 3% in the first half of the year. With foot traffic in bars and restaurants sluggish it has been glass and draught beer sales that have been more vulnerable to the drop in demand; the bulk of can sales take place in supermarkets where sales have held up significantly better.

In terms of overall beverage volumes, East Europe was hit harder by the financial crisis of 2008 and volumes are recovering at a quicker rate this year than in West Europe. As a result, the 10% East European can increase is well ahead of neighbouring West Europe's 5% rise. East Europe makes up just 16% of the regions can sales and there remains plenty of slack in the market to exploit. The West European beverage market is more mature and subsequently more challenging than its neighbour and the 5% can growth is notably encouraging. Beer consumption in West Europe had been wavering even before the economic upheaval of 2008, so the small rise in beer can use in 2011 is worthy of merit.

Stakeholders in the beverage can industry will be buoyed by the fact that the results show that the can market in West Europe is outperforming the overall beverage market in the region; as a packaging format, cans are taking share from other beverage packaging alternatives. Beverage researchers Canadean report that soft drinks in Europe increased by 2% in the first half of the year in contrast to can growth of as much as 8%. Overall European beer sales edged forward by 0.4% again well behind the rise in beer can sales of between 2 and 3%.

The hot conditions enjoyed by much of the region in the spring and early summer will undoubtedly have amplified the performance in 2011, although the disappointing weather across much of Europe at the start of Q3 suggests we can expect the growth to stabilise at more traditional levels, but overall all the indicators suggest that the drinks can is winning over an increasing number of producers and consumers in the European drinks market.

Cans make friends on Facebook

BCME has boosted the can's profile in the social media space with the launch of an innovative new Facebook application. The application encourages visitors to sign up to a virtual can recycling game, with the opportunity to win cash prizes and premium passes to popular music streaming service Spotify. The aim is to engage directly with consumers in spreading the drinks can recycling message. A viral element also encourages users to send virtual cans to friends, creating a word-of-mouth buzz around the application. The Facebook launch is BCME's latest foray into social networking. The association recently launched a blog site at www.canblog.net which serves as a hub for all of its social media activity. A branded channel on video sharing website YouTube is also being used to aggregate entertaining and informative content related to beverage cans, with a video-based competition also in the offing. BCME's Facebook application can be found at http://apps.facebook.com/recycling-machine

Cans get red carpet treatment

Last year saw the inaugural Can Film Festival held in London, Manchester and Glasgow to encourage more people to recycle drinks cans. Held in May to coincide with the famous Cannes Film Festival in France, this unique event, organised by BCME, allowed film fans in each of the host cities to attend a free screening of 'The 11th Hour' ?an environmental documentary narrated by Leonardo DiCaprio ?with admission gained by bringing an empty drinks can to be recycled. BBC Radio One film critic James King hosted the London screening of the film and urged the audience to recycle more often. "The great thing about The Can Film Festival is that it brought people together and encouraged recycling," he said afterwards. "It also highlighted the fact that recycling is simple. The drinks can is not only 100% recyclable but also infinitely recyclable and helps save energy." Over eight billion drinks cans are consumed in the UK each year, but at present only a third are recycled. With events like the Can Film Festival proving so popular, it is hoped that more people will become aware of the importance of recycling.