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United States Aluminum Beverage Cans Market - Growth, Trends, COVID-19 Impact, Forecast (2021 - 2026)

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  • 120 Pages
  • July 2021
  • Region: United States
  • Mordor Intelligence
  • ID: 5394103
UP TO OFF until Sep 30th 2023

The United States Aluminum Beverage Cans Market is expected to reach a CAGR of 3% during the forecast period (2021 - 2026). With the outbreak of COVID-19 pandemic, the aluminum beverage cans in the US region is expected to witness negative growth. Also, the aluminum can manufacturers have been flooded with a pool of issues. Some of the effects of lockdown include lack of availability of raw materials used in the manufacturing process, supply chain disruptions, fluctuating prices, labor shortages that could cause shipping problems, production of the final product to inflate and go beyond budget, etc. According to the United States Geological Survey, the primary production of aluminum in the United States slumped to some 1 million metric ton in 2020, owing to the pandemic.

  • Moreover, domestic aluminum producers, including rolling mills and billet remelters, saw a notable drop in demand, and in response, halted production intermittently or had been running at reduced capacity, in some cases as little as 30%-40%, or a combination of both, according to S&P Global. Thus, it has affected the aluminum cans market in the region.
  • Aluminum cans are used in the beverage industry due to the ease of disposal and their recycling advantages. Also, aluminum cans increases the shelf life of the product. Carbonated soft drinks, energy drinks, and alcoholic beverages are among the major end-user segments for the use of aluminum beverage cans.
  • In the North American region including United States, metal cans made up of steel and aluminum are mostly preferred. These materials have significant properties, such as being softer and lightweight, due to which the manufacturers are able to save costs associated with logistics.
  • Also, owing to the increasing consumption of both alcoholic and non-alcoholic beverages, such as beer and carbonated drinks, in the region, there is significant demand for aluminum cans in the region. According to the Alcohol and Tobacco Tax and Trade Bureau, in 2020, the volume of beer produced in the United States was 179.95 million barrels. Also, according to the Beer Institute 2020 Report, America’s brewers use 36 billion aluminum cans every year.​

Key Market Trends

High Recyclability Rates of Metal Packaging is Expected to Drive the Market Growth

  • Growing environmental concerns around the world have resulted in increasing awareness about the type of packaging materials utilized. High energy consumption of packaging manufacturing is one of the factors pushing recycling. Diminishing natural reserves, global warming, and the impact of plastics on the environment are the key trends influencing consumer demand.​
  • Initiatives by environmental groups and high exposure to social media have resulted in increased awareness among the users , with most of the population now being aware of the environmental impact and willing to take action to counter these issues. Consumers are demanding for packaging products that cause lower environmental impact. Many users are abandoning plastic usage, while the demand for recycled products is growing. This is creating a high demand for metal packaged products.​
  • Recyclability of aluminum as a metal is one of the primary factors influencing the consumption of metal cans in the market. Metal cans are 100% recyclable, with an estimated 30% of the total metal in use, being generated from recycling.​
  • Metal cans, especially aluminum, are the most recycled packaging units. They can be recycled at the end of their lifecycle without degradation in the quality, and that makes them the preferred packaging material for brands across the industries, ahead of other materials, such as plastic and paper. In the United States, a staggering 105,784 aluminum cans are recycled each minute - leading to an overall recycling rate of nearly 50 percent, the highest recycling rate for any beverage container. ​
  • Aluminum beverage cans represent one of the world’s most recycled drinks container, and global recycling rates have now reached 75%. Also due to the infinite recyclability of aluminum, 75 percent of all aluminum produced is still in circulation. This makes Aluminium a good prospective for recycling in the United States and Canada.
  • Moreover, metal cans including aluminum have an average 70% collection rate, higher than any other packaging material available in the market. The energy consumed to process recycled metal cans is 5% more than that used in manufacturing primary metal cans. Thus, the industry is making a strong push toward adopting recycling, while government initiatives and consumer support boost this trend.

Carbonated Soft Drinks Holds Significant market Share

  • Aluminum cans are commonly used in pressurized bottling like Pepsi, Coke, and carbonated drinks, to hold the pressure and protect the contents in the bottle. The increasing consumption of these drinks in the region gives rise to the increasing need for cans in the sector.
  • Also, there was an unprecedented spike in at-home consumption of soft drinks and alcohol in North America because fewer Americans are consuming soft drinks and beer at restaurants and bars because of gathering restrictions related to the Covid-19 pandemic in 2020. The increase in take-home beverage demand also necessitated higher US imports of can sheets. The country relies on a mixture of domestic and imported aluminum beverage can sheet, which are formed into cans by companies such as Ball and Crown.​
  • The aluminum base for beverage cans consists primarily of aluminum, but it contains small amounts of other metals, including 0.4% iron, 0.2% silicon, 1% magnesium, 1% manganese, and 0.15% copper. A significant portion of the aluminum used in the beverage can industry is derived from recycled material. According to Encyclopedia and various researchers, 95% of all beer and soft drink cans in the United States are made of aluminum. Approximately 25% of the total American aluminum supply comes from recycled scrap, and the beverage can industry is the primary user of recycled material. Some of the manufacturers stated that the aluminum can industry reclaims (recycles) more than 65% of used cans.​
  • However, with rising health consciousness across the country, there was a reduction in the consumption of beverages such as soft drinks, juicy fruit drinks, energy drinks that have high amounts of sugar, which can impact the demand for cans. Some companies have been launching ‘'zero sugar'’ versions of their carbonated and soft drinks to attract customers, such as Coca-Cola and Pepsi.
  • Furthermore, even though the trend of carbonated beverage consumption is lowering through years, Americans continue to drink canned beer and soft drinks while staying at home more, restrictions on recycling programs have caused fewer of those empty used beverage containers (UBCs) to reenter the aluminum supply chain forcing producers of aluminum can sheet in the United States to import aluminum from Latin America to help fill the gap created by UBCs not making their way back to secondary smelters. Thus, the lack of aluminum recycling also had some ripple effects on the studied market.

Competitive Landscape

The aluminum beverage cans market in the United States is moderately fragmented, due to the presence of few major market incumbents, such as Ball Corporation, Ardagh Group, and Crown Holdings Inc. among others. Sustainable competitive advantage is expected to be gained through innovation in design, technology, and application. The level of market penetration for aluminum beverage cans increased over the past decade, aided by the increasing demand from the food and beverage in the region. Furthermore, the market incumbents are adopting moderate competitive strategies, such as partnerships, along with the emphasis on R&D and innovative activities. The firm concentration ratio is expected to be considerably low over the forecast period, as most of the players are established in the market.

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Market Drivers
4.2.1 Growing demand from the Non-Alcoholic Beverage sector
4.2.2 High Recyclability Rates of Metal Packaging
4.3 Market Challenges
4.3.1 Growing demand for substitutes
4.4 Supply Chain Analysis
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitutes
4.5.5 Intensity of Competitive Rivalry
4.6 Impact of COVID-19 on the Aluminum Cans Industry in the US
4.7 Industry Standards & Regulations on Recycling of Metal Cans
5.1 By Type
5.1.1 2-Piece
5.1.2 3-Piece
5.2 By Application
5.2.1 Carbonated Soft Drinks
5.2.2 Beer
5.2.3 Water
5.2.4 Energy Drinks
5.2.5 Other Type of Beverages (Wine, Spirits, Flavored, Alcoholic Beverages, Juices, Dairy Based Beverages)
6.1 Company Profiles
6.1.1 Ball Corporation
6.1.2 Ardagh Group
6.1.3 Crown Holdings Inc.
6.1.4 Silgan Holdings
6.1.5 Metal Container Corporation
6.1.6 Envases Group

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Ball Corporation
  • Ardagh Group
  • Crown Holdings Inc.
  • Silgan Holdings
  • Metal Container Corporation
  • Envases Group