Surging costs are putting small beer brands’ ability to sustainably package their products at risk, craft brewers have warned.
Rising cardboard prices and the devalued pound mean some craft brands are having to switch packaging from cardboard to plastic, according to Bedlam Brewery owner Dominic Worrall.
“In our case, we were packaging in cardboard boxes, which is a far nicer presentation particularly for our SKUs in larger retailers where you actually see the outer packaging,” he says. “But we’ve had to scrap that for a far simpler process, with a cardboard tray and then shrink wrapping. It is a direct result of price increase, which is a direct result of Brexit.”
It comes after Kraftliner cardboard prices were up a whopping 26.9% year on year to £606.7 per tonne in January, [Mintec], driven by hikes in feedstock pulp prices and reduced European softwood pulp stocks.
“There is no way many brewers will be able to sustain the costs, even with scalability,” says Worrall.
Other brewers who have not yet felt packaging price rises hit are beginning to make provisions. It has had “zero effect so far, but that’s the beauty of using local manufacturers”, says Grainstore Brewery director Peter Atkinson. But, he adds: “I’m sure that will change as the effects [of the weak pound] begin to hit home. It’s very much planned for but we aren’t expecting to see any price rises from our suppliers in the next six months.”
Dan Lowe, CEO of Fourpure Brewery, says working with local suppliers and economies of scale has mitigated costs. “It’s one particular area of the business where we are well supported in the UK - our cans, labels and boxes are sourced locally and as such we have some protection from negotiating pricing across borders.”
No comments yet