Making room for improvement
Lāčplēsis beer is one of the most popular brands of canned beer on the Latvian market
While the Baltic states offer a small can manufacturing segment, strong brewing and fishing industries present opportunities. Monika Hanley reports from Riga
All images courtesy of Monika Hanley
While the Baltic states’ metal can industry s largely on imported packaging, two industries which routinely utilise local production are the beverage (specifically beer), and canned fish industry. While there are far more production facilities today within independent Estonia, Latvia and Lithuania than when these countries were part of the Soviet Union until 1991, the sector has been declining. Examples of companies making cans in the Baltic states include Kalmata fish cannery in Latvia, which manufactures cans, or can parts, in house; and Lithuania’s Aurika, which produces aluminium lids for edible products.
Importers are significant too. Estonia has leaned on the Canpack manufacturing plant in Hämeenlinna, Finland, for sourcing cans, most recently for non- alcoholic beverages made by Estonia’s Saku brewery. European Union (EU) statistical agency, Eurostat, said that Estonia imported EUR €14.4 million’s worth of aluminium cans, casks, drums, boxes and similar containers in 2023 from other EU countries. That said – the other two Baltic states’ import volumes are significantly lower, according to Eurostat –
Latvia imported €1.15 million’s worth from EU exporters, and Lithuania just €404,000’s worth.
Regional preferences
Fillers and can manufacturers/importers in the region must deal with a particular regional market weakness – where some markets prefer to package soups in metal cans, the Baltic States often use glass and plastic pouch options. Glass and plastic containers are also popular as packaging for alcoholic beverages, with these trends being more pronounced in Latvia than its Baltic neighbours.
“In general, the situation is that Latvia and the Baltics still prefer glass,” said Toms Kursītis, communications manager for Aldaris, a Latvian brewer within the Carlsberg group, which makes 17 light and dark lager beers. Of all the Baltics, Estonian consumers are most ‘pro can’.
Regardless, Aldaris sources its cans regionally, from its fellow Carlsberg-owned brewers, Svyturys (from Lithuania) and Saku (Estonia), whose sales of canned beer are boosted by the high volume of tourists from Finland on ferries, visiting to buy crates and pallets of Estonian beer, generally cheaper than Finnish product. According to the Association of Finnish Alcoholic Beverage Suppliers, Finnish consumers purchase one-third of Estonian-produced beer and cider, largely purchased in 24-unit cases.
While this percentage has fluctuated over the years, Estonian canned beers and ciders have stayed popular with Finns, with 9.8 million litres of beer imported by Finnish travellers to Estonia in 2022. The CEO of the Finnish Federation of Brewing and Soft Drinks Industry, Tuula Loikkanen, remarked in Febraury 2023 that high taxation of alcohol in Finland has continued to lead people to order online and bring in from Estonia.
That said, Kursītis explained beer sales across the Baltic states have been falling, as they have in other mature markets, depressing can sales: “The beer market as such is decreasing, so it affects all the segments and packaging data.”
Russia’s invasion of Ukraine has not helped. The Association of Estonian Food Industry told CanTech International this has disrupted the availability of packaging materials, particularly metal cans. Spokesperson and manager, Sirje Potisepp, said: “The war in Ukraine has affected the supply chains of Estonian manufacturers, including the availability of packaging. And, of course, the availability of metal cans.”
Despite these challenges, the can making and can filling industry showed resilience, drawing from lessons learned during the Covid-19 pandemic. Potisepp said Estonian canners and can fillers had become adept at navigating diverse risk scenarios and swiftly adapting to supply difficulties: “Covid taught them to deal with different risk scenarios and supply difficulties were quickly overcome,” said Potisepp, although she admitted that price increases have been a consequence of a declining number of suppliers.
One sector that has struggled with the impact of Russia’s ongoing invasion of Ukraine is the Latvian fish canning industry, whose supplies were hit hard by a late-2023 and early-2024 blockade of Polish truckers of the Poland-Ukrainian border over competition from Ukrainian hauliers.
“Latvian companies, despite the war, continued to actively cooperate with Ukraine. The activities of Polish truckers are equivalent to an economic blockade of all of Ukraine,” noted Jānis Endele, president of the Latvia Fish Farmers’ Association and co-owner of the Riga-based Karavela fish cannery.
He estimated in a company communiqué that the blockade would cause the loss of millions of euros to Latvian fish producers. The blockade ended in mid-January of this year (2024). The Latvian Fish Farmers Association, made up of 13 fish processing companies, said that 85% of their collective 2022 sales of €222 million were from exports, including to Ukraine. This is particularly unwelcome news for Karavela, which in 2019 acquired the third-largest producer of canned fish in Germany, Larsen Danish Seafood, transferring its production to Riga.
“We produce metal cans ourselves, but we buy EO [easy opening] lids either from Türkiye or China. Aluminium packaging is mostly from European manufacturers,” said Endele.
“The only difference is that in recent years, aluminium was cheaper than steel and some manufacturers switched to aluminium packaging because it was cheaper and more customer friendly.” However, expansion is on the horizon for the Karavela company, due to its high production volume and assortment: “We produce a small part ourselves but buy the majority from others. For now, we are […] increasing production volumes right here on site,” explained Endele.
Brivais Vilnis, in operation for over 70 years, is one of the companies that owns the trademark ‘Riga sprats’ and has exported production around the world since the 1980s
Company innovations
Another prominent brand, Latvia-based Brīvais Vilnis – which sells more than 100 varieties of canned fish products, exported to about 40 countries – has been innovating to maintain its market share. The company was the first to produce ‘dingle’ and ‘hansa’-type cans used for fish products, with a static rivet tab for easy opening, in Latvia.
Brīvais Vilnis also works with the Germany-based Weidenhammer Packaging Group, which supplies an injection-moulded container featuring a barrier layer of aluminium oxide. The company has developed transparent lids for its cans, allowing for the contents to be visible to consumers.
Sourcing challenges
For all Baltic state companies using aluminium packaging, the price of this metal is of concern, being currently limited by efforts to avoid purchasing Russian aluminium because these sales help finance Russia’s military aggression in Ukraine. The EU still imports (as per December 2023) 9% of its aluminium from Russia, said industry association European Aluminium – €2.3 billion’s worth per year. The three Baltic states and Poland, who are the EU member states most directly threatened by any Russian advance in Ukraine, have pressed the EU to block all imports of Russian aluminium – when they made that call in January 2024, aluminium prices for European producers rose 3.6%.
Alternative sources, such as Italy, Iceland, Mozambique and Norway, are available, but European producers have said supplies are not as accessible as Russian aluminium. As of late January, 90% of aluminium stored at the London Metal Exchange warehouse is of Russian origin.
One way of dealing with this problem is to boost metal packaging recycling, and vigorous efforts are under way in the Baltic states, even if they are still at risk of missing the 2025 EU recycling targets – 50% by 2025. However, during 2020, Estonia was third in the EU after Germany and Finland for aluminium beverage can recycling before moving down to eighth position in 2021, while Lithuania came in ninth position (in 2021), and Latvia – the most recent to introduce a packaging deposit system – was twenty-fifth, just above France.
Aluminium can recycling rates in Estonia were highest at 94%, Lithuania at 90% and Latvia at 44%, which also includes packaging that was exported for recycling, according to industry association, Metal Packaging Europe.
Aldaris beer, part of the Carlsberg Group, outsources production of the canned selection to neighbouring Saku (Estonia) and Švyturys (Lithuania)
Estonian efforts for a deposit-based beverage packaging recycling initiative have included cross- border cooperation with Latvia, seeking to create a common packaging deposit system allowing consumers to return packaging in either country. The plan was proposed in 2018 and discussed again in 2020, to no success. However, a 2021-2023 Estonian ministry of environment project, working with Latvia’s ministry of environmental protection and regional development, invested €300,000 into a joint awareness campaign and pilot programme on package deposits to harmonise efforts and find solutions for cross-border recycling cooperation.
Estonians deposit 100 million beverage cans a year, according to Estonian newspaper reports, and Latvia is not yet ready for an influx of Estonian cans. Estonia’s Saku Brewery has suggested aligning excise taxes on canned beverages across the Baltic states, to even out sales. But other beverage producers have not supported that idea, saying it would increase costs.
Latvia has made advances in recycling, however, working with Norway-based collection and sorting products manufacturer, Tomra, to reach an impressive 80% return rate for its domestic collection system launched in February 2022, with data for the subsequent 13 months to March 2023. Tomra reported an 80% return rate as of February 2024.
Lithuania has operated a can deposit system since 2016. Overseen by the non-profit organisation, Užstato Sistemos Administratorius (USAD), established by Lithuanian beverage producers, importers and sellers, this system manages the country’s recycling initiatives. USAD collects approximately nine out of ten beverage cans sold locally, marked with the deposit system label. The organisation reports 220 million metal packaging units currently being recycled annually, with steel cans also being collected and recycled.
Initiatives to reduce use of plastic have also been received on the beer market since 2020, as Švyturys, Aldaris and Saku, all part of the Carlsberg ground, have adopted Snap Pack packaging, cutting plastic by 76% for six-pack beer cans.
Despite facing challenges, the metal can sector in the Baltic states keeps moving forward, especially in sectors such as beverages and canned fish where local production plays a significant role. With changing consumer tastes and ongoing geopolitical tensions affecting supply, there is a mix of hurdles and opportunities for growth in the region.
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