Craft Beverage Warehouse (CBW), a Milwaukee-based beverage packaging distributor, is making a $4 million investment to begin offering digital can printing to craft beverage companies in 2022.
CBW will begin working with current and future customers to plan printing runs in late Q1 2022, with manufacturing slated to begin in Q2. Kyle Stephens, CBW co-founder, told Brewbound the company’s goal is to provide a minimum order option of half a pallet, or 3,500 cans per SKU. He expects the average order volume to be around 10,000 cans per SKU.
The project has been in the development for about 18 months, and was scheduled to be announced after the holidays, but with increases in price and order minimums from can manufacturers, Stephens said CBW “wants to make sure [its] current and future customers know that people are working on this.”
The announcement comes less than a week after Ball, the world’s largest aluminum can manufacturer, began informing its customers that it would increase its order minimum per SKU for printed cans from one truckload (204,000 cans) to five truckloads (1,020,000 cans), effective January 1. Additionally, Ball will increase the price of its 12 oz. cans nearly 28%, according to a pricing sheet obtained by Brewbound.
With the minimum increase, breweries with smaller orders have to pivot to third-party brokers, and consider alternatives to printed cans, such as pressured labeled or plastic shrink wrapped cans, which cannot be easily recycled.
Digital printing — which takes a digitally uploaded image and prints it onto a can — provides not only a sustainable option for producers, but also more flexibility and efficiency than traditional printed cans to allow for smaller orders.
“We could print a SKU as one can and still remain efficient,” Stephens told Brewbound. “It takes Ball 30 to 45 minutes just to change the print plates to print the new SKU, so if they can go from changing those plates every hour to changing them twice a day, it’s going to be more efficient for them. And ultimately, it’s going to be more sustainable for everybody. So we need to fill this gap now for the smaller customer.”
CBW sells brand agnostic packaging materials, such as Brite cans, Paktech can carriers and Kraft case trays, to more than 200 customers in 49 states and Canada. Stephens estimated CBW’s portfolio will increase to between 600-800 customers with the digital printing launch, and that the amount of cans sold every year could triple.
“Our goal is to keep our lead time down,” he said. “We know small beverage producers are changing with the times, [and] every week there’s something new coming out, so we don’t expect our customers to plan as far ahead as they need to when ordering a million cans.”
After an initial sample process and art approval, typically completed within a week, Stephens said CBW can reduce lead times to two to four weeks.
Stephens added that the majority of the company’s customer base will be breweries producing 10,000 barrels or fewer annually, as well as larger producers with seasonal brands. Additionally, Stephens would like to incorporate orders for “special event” or collaborative offerings, where “you’re not going to go order a quarter of a million or a million cans.”
“When it comes to packaging materials, I think it’s gonna get harder before it gets easier,” he said. “[While] we had this crush during the pandemic — where everything went into some type of package, rather than a keg — we’re also adding on the fact that ‘XYZ juice company’ can’t get into Walmart because right now they’re in a plastic bottle, so they’re going to go to a can too.
“That’s why you’re seeing Ball and other big companies do things like this, it’s not just the pandemic. Everybody’s moving to this package, which is really, really, really good for the world and earth … but, it makes companies like Ball make a really hard decision: ‘Do I want to sell as many cans as I can, or do I want to treat all my thousands of customers exactly how they need to be treated?’” he continued. “It’s really a scale and efficiency model, and that’s what we need to solve for.”
While sustainability is a driving factor for CBW’s investment, Stephens said the option can also be financially beneficial for producers.
“Sustainability doesn’t really drive everyone to change their behaviors,” he said. “[Our] No. 1 goal is obviously sustainability, but No. 2 is to make the sustainable option economically feasible, or at least, compete with the current options.
“As we scale — as we’re running that machine more and more, with more and more shifts without stoppage — I think we’re going to be able to beat the pricing of current alternatives right now, which are the pressure sensitive label and the plastic shrink sleeve,” he added.
To make room for the digital printing equipment and operations, CBW is doubling its warehouse space from 9,000 to 18,000 sq. ft., which will be used primarily for printing production, rather than product storage. The expansion is being funded by debt financing, as well as an equity round, led by Jeff Meilander, owner of Oak Creek, Wisconsin-based Redwall, a digital and screen printing company.
“We’re still selling cans until that printer gets here, so if anybody wants to start developing that relationship, we’re here for that as well,” Stephens added.