Beer drives China’s can growth
Chinese can maker, ORG, recently launched a resealable screw-top beverage can end. Image: ORG
China’s leading can makers are laying out plans to increase production capacities. David Hayes reports
China’s can industry has been experiencing a varied outlook for the past few years. Domestic sales of canned beverages have fluctuated due to the earlier impact of the Covid-19 pandemic on daily life, and unstable consumer demand owing to the economic slowdown affecting the country since the ending of lockdown.
Leading can makers are continuing to expand their two-piece production capacity as part of plans to increase their domestic geographical coverage, in spite of difficulties caused by the pandemic.
Populous Southwest China, where government efforts to boost economic development have helped lift household incomes in recent years, remains a major focus of new plant investment as can makers open production facilities close to important customers in the region.
Pearl River Draft Beer is brewed by Guangzhou Zhujiang Brewery Group.
Image: David Hayes
Canned beverages
The growing popularity of canned beer is driving the growth of China’s two-piece industry as consumer spending continues to recover from the effects of the government’s severe pandemic lockdown.
“The can market here is growing but not very fast; 2023 was kind of a low point as the economy was not active last year due to the impact of Covid,” commented a vice president at one of China’s leading can parts suppliers.
Total consumption of two-piece cans is estimated at about 55 billion cans in 2023, representing an important share of China’s metal packaging market. Beverage cans, including bottle cans, are regarded as premium packaging and are served in restaurants and entertainment venues, as well as being sold in modern supermarkets and convenience stores.
Beer cans accounted for an estimated 60% share (35 billion cans) of last year’s two-piece market. Herbal tea drinks accounted for a further estimated 13% share (seven billion cans), while the rest of the two-piece can market occupying the estimated remaining 27% share (13 billion cans) consisted of energy drinks including Red Bull, soft drinks and other beverages.
According to industry figures, China is the world’s largest beer market. In 2023, Chinese consumers drank an average of 34.7 litres of beer per person. Beer consumption is dominated by young people aged from 25 to 34 living in first and second tier cities – a growing number of whom prefer premium and craft beers. Some 58.5% of beer drinkers are male.
“Canned beer is continuing to replace beer in glass bottles. Beer in cans accounts for about 35% of China’s total beer market,” the aforementioned executive said. “Every beer company here seems to be installing a new beer canning line,” they added.
“Competition in the beer industry is so tough in China; there are many micro-breweries now setting up as well.”
Most canned beer is sold in 330ml cans, although 500ml and other can sizes are used by some beer brands. A small number of premium beers are sold in 330ml bottle cans produced by several leading Chinese can makers.
China’s energy drinks market is another growing user of beverage cans. Two foreign brands, Red Bull and Monster Beverage Corporation, currently lead the market, which has also attracted a growing number of Chinese beverage producers.
Red Bull, which supplies about half of all energy drinks consumed in China, has relied on three- piece aluminium cans to build up its strong market presence. Red Bull also uses two-piece cans, including those filled for its War Horse energy drinks brand.
Energy drinks sales are expected to grow in future as the products have become popular with China’s blue-collar workers, an important consumer group numbering about 400 million people.
Drinks cabinet in corner shop Foshan, Guangdong, December 2019. Image: David Hayes
Canned food
China’s canned food sales also are growing, though export sales are rising faster than domestic canned food consumption. In 2022, China exported 3.13 million tonnes of canned food, registering a 12% increase compared with exports the previous year, according to China Daily.
Canned goods exports were worth US$6.9 billion in 2022, the official newspaper reported China Canned Food Industry Association as saying, representing a 22% increase in value year-on-year.
Canned food consumption in China remains low, however, when compared to Europe and North America, due to Chinese consumer preference for fresh food, fearing that preservatives in canned food may be unhealthy.
Annual per capita consumption of canned food is more than 33kg in Sweden, for example, which records one of the highest levels globally, and is about six times higher than the figure for China, according to China Canned Food Industry Association figures. Fruit and vegetables are China’s main canned food exports for which Asia, Europe, Africa and North America are the largest export markets.
Three-piece tinplate can sales account for a small share of China’s total can production.
“In recent years, three-piece cans have been used mostly for coffee drinks and congee rice porridge products. But these items are not going up, so the volume of three-piece cans used is stable or lower than before,” the executive told CanTech International.
Congee rice porridge recipes traditionally have accounted for an important share of China’s domestic three-piece tinplate can demand, along with coffee drinks. However, the recent growth of food delivery services has now affected China’s canned congee market.
“Now that it’s possible to order congee for home delivery online, there is no need for people to buy congee in cans,” the executive explained, adding: “Older people enjoy congee, but many people now prefer fresh congee as many think that canned food is not good for their health.”
Image: Shutterstock
Can maker profiles & plans
Meanwhile, China’s four leading can makers, CPMC Holdings, Shengxing Co, Shanghai Baosteel Packaging Co and ORG Packaging Group, have an estimated combined production capacity of about 60 billion two-piece cans per year, along with various three- piece, bottle can and other can related facilities.
Several of the can makers have announced plans to invest in new can plants and other manufacturing facilities since China’s strict Covid lockdown was lifted at the end of 2022, as beverage fillers look to increase their canned beverage sales.
Shengxing Co, for example, has announced plans to build a RMB 1 billion food and beverage packaging plant in Southwest China to support growing demand for canned beverages in the economically expanding region. The can maker’s plans involve investing about RMB 500 million to construct a three-piece beverage can plant in Neijiang Economic & Technological Development Zone in Sichuan Province.
Located between Chengdu, Sichuan’s provincial capital, and Chongqing, a region of about 130 million people, Neijiang is an important transport hub and food processing centre. Shengxing’s Phase One plant will occupy about 57 acres of a 96-acre site purchased to locate the multi-phase project.
Equipped to produce an estimated 500 million cans per year initially, the new plant will supply cans to the nearby Tencel Red Bull Drinks plant in Neijiang, as well as to other beverage and food packing companies in the area.
Plans to build the Neijiang plant follow completion of an earlier project in Southwest China to construct a one billion cans per year two-piece can factory in Kunming, capital of Yunnan Province. The two-piece can sizes include 310ml cans for Wang Lao Ji herbal tea drinks.
Elsewhere in China, Shanghai Baosteel Packaging Co is preparing to expand its aluminium two-piece beer can production capacity to supply the country’s largest beer brand, Snow Beer, in South China’s Fujian Province. Snow Beer is cooperating with Heineken to build a new beer factory brewery in Xiamen. Construction started last year on the new plant, which is scheduled to open this year.
Plans call for Baosteel to commission a high-speed line capable of producing over one billion cans per year at its Xiamen plant in 2024. A second high speed line will be installed at the plant in future.
Baosteel’s food and beverage can production has increased steadily in recent years. The company has reported a 12% increase in sales revenue for Q1 2024 sales revenue compared to Q1 2023. Its customers include Tsingtao Brewery; Heineken; AB InBev; Coca-Cola; and PepsiCo.
Baosteel is China’s only can maker with production facilities for both steel and aluminium two-piece cans. The company is also an important producer of tinplate for local use and export.
ORG Packaging Co, another of China’s big four can manufacturers, meanwhile, has recently launched a resealable screw-top beverage can end. Designed to fit all 202-diameter aluminium and tinplate cans, ORG has dubbed its new innovation as “One Lid to Rule Them All” (pictured as the main article image above).
Announcing the launch of its new beverage can lid, ORG said in a recent statement: “The design of One Lid to Rule Them All ingeniously separates the can body from the lid, presenting an optimal lid solution that minimises replacement costs for metal cans.”
The 38mm diameter wide-neck screw- top lid is designed for use on beer and soft drinks beverage cans ranging from 330ml to 500ml in size and is particularly suited to sports drinks cans, according to ORG.
“This innovation ensures that no modifications are required for the existing can body production process,” ORG’s announcement explained. “Any can body featuring a 202-diameter opening could seamlessly integrate with the new high- neck screw-top lid, which enhances both practicality and compatibility.”
Meanwhile, CPMC Holdings, China’s other big-four can maker, has recently completed several can plant expansion schemes in China and is preparing to expand its production capacity in Europe.
Writing in CPMC’s recently published FY 2023 annual report, company chairman, Zhang Xin, announced that the company’s newly-commissioned two-piece can production line projects in Kunming, Yunnan, in Southwest China and Shenyang in Northeast China, had both recorded profitable operations during their first year of operations, along with CPMC’s third two-piece can line in Chengdu, Sichuan Province in Southwest China.
Separately, as part of the firm’s product diversification plans, CPMC has launched several new beer can products in the past year, including a one litre fresh beer can and a Heineken five litre special design beer can.
This feature article is restricted to logged-in paid subscribers.
Login or subscribe now to view this exclusive content.
