Cans increasingly valuable: high demand drives up prices

Cans increasingly valuable: high demand drives up prices

Computer chips, bicycle parts, furniture wood: shortages everywhere and rising prices. The packaging industry is also affected by the global turbulence in the supply chains, for example in the case of cans.

The metal packaging industry association is alarmed. "Manufacturers of metal packaging and closures have experienced a significant shortage of input material this year," says a spokeswoman. The supply situation for sheet metal and aluminum in particular is still very tight. "To get more quantities is very difficult."The situation has improved slightly for so-called cold-rolled steel, which is used, for example, for steel founders. However, an end to the shortage is not in sight there either. For all input materials, the delivery times are significantly longer. According to the association, a good two billion food cans made of sheet metal enter the german retail trade every year.

Wholesalers of food packaging, who supply butchers with can blanks, for example, describe the situation as "tense" and "turbulent" due to the sharp rise in prices and temporary delays in deliveries. "In the entire food packaging industry, demand has increased enormously since the beginning of the pandemic in march 2020," says the commercial manager of the wholesaler dosen-zentrale zuchner gmbh, werner hansen. The reason: "the consumers put more on security and long durable foodstuffs."

Production not yet ramped up again

However, due to corona, many manufacturers of cans, glass or plastic containers had cut back their capacities and have not yet managed to ramp them up again. As a result, "especially the prices for plastic and, since mid-2021, also for sheet metal are at an all-time high."Canned food is more than 50 percent more expensive than last year, and plastic prices have risen by more than 60 percent. At 10 percent, increases in glass are still the lowest.

For his company, hansen emphasizes: "we have had a comparatively good grip on product availability."The price increases are passed on within a reasonable range. The manager expects the situation for canned goods to slowly ease again by the end of 2022. "But here we are talking about small steps and not a complete turnaround."

The companies that need the sheet metal or glass packaging for their foodstuffs also have worry lines on their foreheads. "Everything is really getting more expensive, that’s the drama," complains christoph freitag, managing director of the federal association of the fruit, vegetable and potato processing industry (BOGK). The association represents around 60 manufacturers, including well-known brands such as kuhne, hengstenberg or spreewaldhof.

Problems with supply chains

Prices for raw materials, packaging materials, glass and labels, as well as for logistics and personnel, have risen. "The special thing is that the increases are almost all in the double digits."In a survey, members had indicated that the cost of can sheeting and lids, for example, had risen by 40 to 60 percent. Energy prices had risen by 40 to 65 percent.

Freitag sees an important reason for the price increase for packaging materials in a strong rise in demand in producing countries such as the USA or china. On the other hand, in the course of the pandemic, the worldwide transport routes have come to a standstill. "The supply chains have become confused."

So, are canned goods on the supermarket shelf becoming more expensive?? Friday suspects that. The association assumes that companies will pass on the price increases to food retailers and thus to consumers.

The rewe supermarket chain is reluctant to comment on price developments. However, no bottlenecks are foreseen for canned goods, "even though the supply chains are strained due to the pandemic," says rewe spokesman andreas kramer. "The warehouses are well stocked, with the long best-before date of canned goods additionally benefiting us."

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