Aluminum / Metal

Incremental Gains

Posted: April 6, 2008 by
Ron Romanik

In the eternal hypothetical debate about what is "old school" and what is "new school," many consumers would definitely call cans "old school." Whether this is accurate or not does not necessarily matter, as it falls on the can industry to bring consumers' minds more in line with the realities and benefits metal cans offer now and forever.

As cans emerge once again as desirable packaging form, the industry struggles to shake off its high-volume, value commodity reputation. It is achieving this through incremental gains in functionality, brand connection, and high-quality printing. Another way it is gaining ground is re-emphasizing the strong sustainability message cans already possess. Cans are the most-recycled form of packaging (up to 63% are recycled), and cans are a closed loop recycling system where recycled cans come back to the consumer as cans.

A higher high end

Jim Peterson, marketing director for Ball Corp., says that in the food aisles, it's all about shelf differentiation, and incremental innovation is beginning to expand cans' presence in several categories. More products are merchandised individually than ever before; therefore, these canned goods need more "pop" than ever before.
Peterson says one success is the photographic quality of football players that were used on a special edition of Jones Soda cans. The enhanced beverage can printing technology used for the Jones Soda is called Eyeris ™ and is proprietary to Ball. Peterson believes this signals the beginning of a trend toward lithography and other print methods directly on cans as a replacement of labels. "When a consumer sees high-quality imagery, their perception of the quality of what's inside improves," Peterson maintains.

Tom Hughes, marketing manager, Crown Beverage Packaging North America explains how "craft" beers, or microbrewery brands, are fighting back on shelves with cans instead of glass bottles to create differentiation. Peterson says cans are making new gains in the beer category because glass bottles limit beer-drinking occasions and because craft brewers using cans believe that their cans convey both authenticity and quality to the consumer.

Of course, with the can category, says Peterson, beverage cans seem to be a proving ground for innovations before they make it to the food categories. This may bode well for cans in another growing category, organic foods, where brand owners are looking for quality differentiation. "It's hard to put an organic product in a non-recyclable package," admits Peterson.

Jack Knight, secretary/treasurer of International Metal Decorators Association and senior international technical service manager for INX International Ink Co., says that a percentage of consumers realize the value of cans. "Things that are canned are fresher than fresh," Knight says, because they are collected, processed, and preserved in their freshest state. Robert Budway, president of the Can Manufacturers Institute, also believes that the nutrition message is a critical one for the can industry in the coming years. "It's just a matter of getting the customer to say:'Yea,'" says Budway.

The message outside

Carolyn Takata, director of marketing at Silgan, sees how cans might add value cost-effectively in a number of consumer categories because of increased competition on retail shelves. Takata predicts that the next few years will see a "rationalization" of retail SKUs as retailers decide which will stay and which will go, as there are simply too many products to stock and sell. "There's a greater sense of urgency from private label to increase their market share," Takata explains. "Retailers are going to demand unique products. That brand distinction will become more critical."

Cans are able to provide that distinction in several ways with printing, shapes, and effects. Takata predicts that to maintain their position, upscale segments of certain categories will be pressured to develop a tiered approach. One way to differentiate is with color, and now the can metal itself can be a specific color. "It's feasible today for brands to pick a unique hue for their brand," says Takata. "Color has a recipe." Takata says Silgan's colored two-piece, aluminum draw redraw (DRD) cans address this trend with ease of execution, speed to market, and nominal incremental costs.

Printing directly on cans also offers distinction and differentiation, as has been proven more thoroughly overseas. Knight explains that in Asia especially, "If it's printed on the can, it must have more value." Knight says that there is a large migration to UV process printing, wet on top of dry, for faster production and better quality. Other benefits include no volatile organic compounds, six-color passes, sharper dot reproduction, and hexachrome and stochastic effects. Knight also predicts that the popularity of laminated steel will increase for more printing options and the adoption of digital printing is only a matter of time.

Knight explains that innovation often happens overseas before the U.S. because the U.S. is stuck on the status quo. The economical reason is because the investments in equipment have already been made in the U.S., and new equipment is cost-prohibitive. Whereas in emerging economies, they are buying equipment for the first time, so they can purchase the more innovative or up-to-the-minute technologies.

Hella Neffati, marketing manager, Crown Food Packaging North America, says that trends in ready meals, health and wellness, and diversifying brands are good for can proliferation because cans are able to meet the diverse needs of today's brands. Crown's Hughes and Neffati look at recent successes, such as Labatt's thermochromic cooling can effects and Moosehead's realistic printing of a moose on a can, as examples of what will soon be the norm. "We keep listening to consumers about what they look for in their cans," Neffati says.

Expanding the scope

Budway believes that the U.S. can market is focused intently on pushing volume and providing value to the largest segment of consumers, and Crown's Neffati agrees. "The U.S. consumer is more focused on what they get for their money," says Neffati. "The tradition of food and cooking is different in the U.S. and Europe."

Neffati explains that cultural differences may explain why decorative or innovative can technologies are more quickly accepted by consumers in European cultures. She believes that European consumers place a high value on food's quality and freshness, the processes required to farm and store it, and the time-honored steps of preparation. These values translate into greater expectations of the quality of packaging, so perceptions of higher quality may be more enticing to Europeans.

Budway says many consumers still find themselves reluctant to purchase canned food products because of an unidentifiable guilt about being old-fashioned. Either U.S. consumers are more value-conscious when it comes to canned goods, or the typical canned goods buyer is a value-conscious shopper overall. It's possible that extra packaging features or decorations may not bring the bang for the buck in the U.S. that they might in other parts of the world where the consumer is willing to pay a premium for the same features.

One benefit that U.S. consumers are willing to pay for is convenience. For some, the word convenience immediately refers to microwaveability, but there are other convenience advantages cans provide now or are improving upon. Ball's Peterson explains that when they developed a microwaveable food can with a plastic bottom, they discovered that U.S. consumers were looking to save steps in preparation, not necessarily to use cans as bowls.

The convenience of the pull-top lid on food cans has certainly passed the tipping point. Campbell's Soup Company has converted over 99% of its soup cans to pull-top lids. Can suppliers are always refining the elements of easy-opening lids, and Silgan's Quick Top® ends have pull-tabs with flat backs to provide a better tactile surface for easier finger access. Likewise, Crown's Easylift™ easy-open ends significantly improve tab access while retaining all the opening performance of Crown's flagship Eole™ technology. Ball's newest easy-open end is scheduled for a November release.

Drawing consumers in

Peterson says that the number of shaped cans at retail has exploded. A full 20% of Ball's business is specialty can sizes, and Ball has 18 different sizes available at any time. "Brand owners have really been able to'niche-market' their product in new ways," says Peterson.

Crown's Hughes attributes the increase in interest in specialty can sizes is because of energy drink explosion. Ordering shaped cans is becoming as ordering standard cans, but high-volume constraints of line speed still rule the day. "Innovation that doesn't run down our lines is not real innovation—it's a toy," says Peterson.

One trend gaining speed is reclosability, which Knight explains is especially important for women and children. On-the-go consumers will turn to plastic bottles if for no other reason that they reclose easily and can be thrown into purses, backpacks, and cars. Ball's Alumi-Tek™ process, in coordination with a Japanese partner, was used for the Caribou Coffee product introduced by Coca-Cola. Consumer studies showed great response to the reclosability, wide mouth (38 mm), easy of opening and closing, and how the screw-top was similar to PET bottles. In addition, consumers perceived it as a "safer" closure.

In the end, there are still many positive associations and respect consumers have with cans, such as quality, tamper-evidence, safety, and portability, and brand owners still like the billboard marketing space that cans provide. "Our goal is to make it a cool package as well," says Peterson.