Bright prospects for the Spanish can industry
Natural white wine from the Spanish brand Can-Vi in an aluminium can. Image: Can-Vi
Andreia Nogueira details how the growth in canned beverages is boosting the metal packaging sector in Spain, despite various continuing market challenges
The Spanish can industry, which has developed an international reputation for its dominant fish canning sector, is increasingly innovative, driven by contemporary trends in its beverage sector, with sales of canned water and wine joining a promising market which has traditionally been based on beer.
The director of the Beverage Can Association (ALB – Asociación de Latas de Bebidas), Juan Ramón Meléndez, informs CanTech International that Spanish sales of juices, wines, and especially natural and carbonated water “have been growing very strongly in recent years.” In this segment, hard seltzers, made of carbonated water with alcohol and fruit flavourings, have also been attracting Spanish consumers – with canned products especially important.
An important, “here-to-stay” trend is canned white wine, Meléndez says, whose sales have grown domestically since Spanish companies canned this product specially to export to the US, Australia, and Japan. Now, Spanish wine lovers are buying canned lines, especially for out-of-home consumption, such as on beaches, where they are used to drinking canned beers, Meléndez explained.
Spanish consumers are well accustomed to drinking beverages in cans – “more than nine billion” in 2021 alone – and, against the norm in this sector, in Spain, canned beers surpass soft drinks in sales, namely 57 per cent of canned beverage sales, compared to around 41 per cent respectively, he said. Production data confirms this trend. For instance, Spain produced 2.39 billion units of metal beverage cans for soft drinks last year, more than in 2020 (2.34 billion), according to data provided by London-based market researcher Euromonitor International.
Thanks to this robust performance, US-based Crown Holdings announced in April 2022 that it will extend its production in Spain, with commercial production expected to commence during the first quarter of 2023, with a new high speed aluminium line at its facility in Agoncillo, La Rioja, northern Spain, making beverage cans. This expansion has come as Crown Holdings last September (2021) sold its Europe, Middle East, and Africa food and consumer packaging business to American investment company KPS Capital Partners, operating under its subsidiary a Swiss company Eviosys, led by Spanish CEO Tomás López-Zamora. It became “Europe’s largest manufacturer of steel and aluminium food packaging” with 6,300 employees in 44 manufacturing facilities across 17 countries, the company announced. Eviosys’ mission is to deliver smart, sustainable packaging solutions.
This should mesh with a new Spanish law promoting sustainability goals given royal assent by Spain’s King Felipe VI in April. This law on waste and contaminated land for a circular economy (Law 7/2022) may help to boost the sector. Among other measures, it dictates that Spain should halve its use of single-use plastic bottles by 2026 compared to 2022, which will impact Spain’s strong tourism sector. It also orders that retail businesses sell fresh fruits and vegetables in servings weighing less than 1.5kg without plastic containers. The law also forbids the use of the endocrine disruptor bisphenol A in food and beverage cans, but it is a key ingredient of liners. The move reflects actions taken in other European Union countries, which are complying with the EU single-use plastics directive.
Meléndez sees more products and brands exploring canned solutions following development of a resulting “plastic-free trend” in society, since aluminium cans are extremely light and easily recycled.
According to a report published in May (2022) at Hispack, a leading packaging and logistics event in Europe last staged from 24 to 27 May in Barcelona, the whole Spanish metal packaging sector registered a turnover of €2.6 billion in 2020. Among 150 companies, the largest 10 were responsible for 60 per cent of this business volume. Yet, the sector still has room to grow, as the turnover of the total packaging sector in Spain was €29.75 billion in 2020. The Hispack report noted that in 2020, the industry had “focused its innovations on improving opening systems, user experience and convenience.” The report highlighted that “advances have been made in monitoring and control of temperature and quality during the handling and transport of containers, as well as the introduction of new innovative experiences such as self-heating containers.”
Furthermore, the same entity stressed that Spain constitutes an important hub for the manufacture of packaging machinery, including canning machines. Data from the Spanish Association of Manufacturers of Machinery for Packaging, Wrapping, Bottling and Related Graphics (AMEC-ENVASGRAF – Asociación Española de Fabricantes de Maquinaria para Envase, Embalaje, Embotellado y Su Grafismo) quoted on a Hispack note, shows Spain is a major producer in Europe, behind only Italy and Germany in terms of production of machinery in the wrapping and packaging sector. From January to July in 2021, Spain exported €655.5 million worth of this equipment, 34.4 per cent more than in the same period in 2020, said Hispack.
Southern mackerel fillets produced in Cape Verde but distributed by the
Spanish food and beverage manufacturing Ubago Group Mare, for the chain of
hypermarkets and supermarkets Auchan Retail Spain. Image: Andreia Nogueira
At a time when the Covid-19 pandemic was boosting food and drink retail sales, ALB director Meléndez noted an increase of “10 per cent in the number of (beverage) cans consumed compared to the pre-pandemic level” because cans conserve products and are light and easy to store at home. Moreover, a study ‘Changes in Spanish lifestyle and dietary habits during the Covid-19 lockdown,’ published this February (2022) in the European Journal of Nutrition, confirms “a higher consumption of ultra-processed foods” where canned food was included.
Yet, according to Spain’s ministry of agriculture, fisheries and food (MAPA) data, although the pandemic led people to buy more canned vegetables, fruits, fish, and shellfish in 2020, sales decreased in 2021. Also, the rising prices of food products, encouraged by logistics problems caused by Covid-19 disruption, may have had a negative impact on sales too.
While official data shows a “boom in the purchase of canned vegetables” during the Covid-19 pandemic, 6.5 per cent higher in 2021 compared to 2008, there were 22.6 per cent fewer purchases of canned fruit in the same period, with consumers switching to fresh products.
As for fish, the Spanish consume more canned fish than frozen or cooked products, but their main preference is for fresh fish, said the MAPA report.
Roberto Alonso, secretary-general of the National Association of Sea and Fish Canned Food Producers – National Technical Centre for Preserving Fishery Products (ANFACO – Asociación Nacional de Fabricantes de Conservas de Pescados y Mariscos – Centro Técnico Nacional de conservación de Productos de la Pesca), tells CanTech International the sales decrease of canned fish and shellfish in 2021 compared to 2020 was caused by a drop in retail sales amid “the intermittent opening of the hospitality industry.”
The continuing slow reopening of Spain’s hospitality industry has made it difficult to project results for 2022. According to Alonso, tuna “represents around 70 per cent of the volume of Spanish-produced canned fish and shellfish, followed by canned sardines and mackerel.”
Canned tuna produced in Spain for the Portuguese brand Costatum. Image: Andreia Nogueira
Among seafood, mussels are the main preference for canned lines. Alonso stresses that Spain is “a world leader in a variety of products and preparations,” including squid, octopus, cockles, clams, and scallops, among others. Such products are mostly sold in light metal containers, especially tinplate, but “a small production – although its presence is increasing – is packaged in aluminium,” says Alonso, adding that “almost all light metal containers use easy-open systems.”
Still, he observes, the Spanish public is also familiar with fish products sold in glass containers with twist-off lids. He also notes that companies have been reducing average sizes, to adapt to “market niches and consumption habits, fundamentally made up of smaller family units” than in the past.
To meet the growing demand for two-piece aluminium cans, for instance, in 2018 the US-based multinational can maker Ball Packaging invested more than €100 million in a new sustainable beverage can manufacturing facility in Cabanillas del Campo, in northern Spain.
Alonso mentions that “the main distribution channels [in Spain of canned fish and shellfish] are supermarkets and self-service stores,” followed by hypermarkets and discount stores. E-commerce channels also registered a boosted growth during the pandemic, but still represent a small percentage of sales, he says.
Spain does have a positive balance in the international canned fish trade, according to MAPA figures. However, according to Alonso, “more than 55 per cent of the consumption of canned fish across the EU comes from [non-EU] third countries,” which is why the Spanish sector wants more “supply of competitive raw material, in quality and quantity,” a driver of EU fishing access agreements with countries around the world.
Russia’s invasion of Ukraine and its disruption of international food supplies have added an additional element of uncertainty to the Spanish canned food and drink sector. “Food insecurity and poverty are enduring problems in Spain,” the US-based international non-governmental organisation Human Rights Watch reports. Considering this, the Spanish government will allocate €97 million to disadvantaged families in 2023 to buy food, including canned tuna, meat, salads and fried tomatoes.
Dutch Alcampo Holbrand beers distributed by the Spanish manufacturer of beer, soft drinks and water, Font Salem, in the Iberian market. Image: Andreia Nogueira
The Beverage Can Association director said in the initial months after Russia sent its military into Ukraine in February were “very convulsive,” but now “the industry is normalising its supply chains.” However, he fears more supply problems in the long term and advised that “Europe, and especially Spain,” must address the implications of “relying on distant raw materials.” He welcomed that last year (2021), the EU can sector through Metal Packaging Europe (MPE), of which the ALB is a member, and European Aluminium launched a roadmap promoting the recycling of aluminium beverage cans, with the goal of ensuring 100 per cent recycling levels by 2030. In 2021, Spain recycled more than 72 per cent of beverage cans consumed, according to ALB data quoted by Spanish media.
The Spanish beverage can sector mainly sources its aluminium from the UK and Germany, but prices for this commodity “change every month,” which makes it hard for companies to plan, especially because contracts with beverages clients are signed for more than one year, sometimes for three years, says Meléndez. Four years ago, there were more steel cans in the market, but nowadays “more than 90 per cent of beverage cans consumed in Spain are made of aluminium” because it allows “showier” decorations and “it is a lighter material,” which is important to reduce shipping prices and CO2 emissions, he explains.
Other innovations in the sector include e-commerce advances for canned olive oil, a key part of the Spanish diet. For instance, in 2020 the Spanish food metal packaging solutions company Auxiliar Conservera launched a new online service to sell metal containers for olive oil.
Meléndez stresses that the rising energy and workforce costs are contributing to a “storm” now being faced by the Spanish can industry and its partners. The sector has long been investing in renewable energies, such as solar panels and wind generators, but the Russian invasion war led business owners to accelerate efforts to reduce the exposure to imported fossil fuels, he says. Still, hoping that the current uncertainty in the world, caused by Russia’s invasion and the Covid-19 pandemic, will soon be over, Meléndez is optimistic given the growth trends in purchases of canned drinks, encouraged by the evolution of society towards sustainability and “legislation aimed at reducing the environmental footprint in containers.” As a result, he foresees an “exciting” future for Spain’s beverage can making and filling industry.
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