SynopsisIndian beverage firms are increasingly using glass and PET bottles for packaging. This shift occurs as the West Asia conflict disrupts aluminium can supplies and raises costs. Aluminium can prices have risen by at least twenty percent due to these global issues. Beer makers report stronger demand for glass bottles when cans are unavailable. Companies are securing materials in advance amid ongoing global uncertainties.Listen to this article in summarized formatiStockWest Asia tensions are driving up aluminium can costs, pushing Indian beverage makers toward glass and PET packaging alternatives. (Representative Image)Cola and beer companies in India are increasingly turning to glass and PET bottles for packaging as the West Asia conflict makes aluminium cans difficult and expensive to procure.For Indian companies, prices of aluminium cans have risen by at least 20% for reasons directly tied to the West Asia crisis.“We are seeing a shift come through in enquiries and in order books (for glass), and it has come earlier this year than the usual festive build-up,” said Suraj Mehta, chief strategy officer, Hindusthan National Glass and Industries (HNGIL), a large glass packaging supplier to beverages, alcohol, cosmetics and pharmaceuticals. “Beer makers are reporting stronger demand for glass bottles when cans are not available, and some beverage companies have moved certain SKUs into PET and glass packaging formats.”Read more: Aluminium industry divided over removing custom duties for scraps and finished productsIndustry executives said relying on the single packaging format of cans, which sell far more than glass or PET specially in urban markets, is a key risk and glass has turned a strong hedge.“The war in the Middle East has delayed commissioning of additional capacity for can shells production in the country. So the need to continue importing cans to cover up the demand supply gap remains,” said Vinod Giri, director general of Brewers Association of India, which represents United Breweries, ABInBev and Carlsberg as member companies. “The war has also seriously impacted global supply chains and related costs. Rising energy prices and the sliding rupee have led to an increase of up to 20% in the cost of empty can shells.”Executives also reiterated the importance of securing orders and material well in advance amid the ongoing global uncertainties.ET Bureau“The stock that sells in that week is already being planned. Concentrate ordered, glass and PET lined up, line time blocked, distributor forecasts locked,” said Paritosh Ladhani, joint managing director of SLMG Beverages. “September is when a beverage company either earns its festive quarter or quietly loses it—not in October, when the demand actually shows up and there is nothing left to fix.”The stock of aluminium cans for Diet Coke dwindled in April. Since the soft drink is sold only in cans, it was impacted more than other sparkling drinks which are also packaged in PET or glass.This year, the peak festive season starts in the middle of October and culminates with Diwali on November 8, seen by sellers as the biggest annual consumption window.India’s aluminium can shortage crisis started around April as the West Asia war peaked, with supplies disrupted across the crucial Strait of Hormuz.Read more: Adani-IHC foray may rejig India's aluminium market mix“That drove up aluminium and energy costs, with aluminium climbing roughly 14-50% depending on the period, towards $3,500 to $3,600 a tonne. It also disrupted the actual flow of can sheet and finished cans, because India imports a large share of these from West Asia, from the UAE and Saudi Arabia,” said Mehta.Read more: Aluminium signals recovery after correction; supply risks and energy concerns may drive the next leg higherThe West Asia region, along with Sri Lanka, is a key supplier of aluminium cans to India. Can makers in India, including Ball Beverage Packaging and Canpack, do not have sufficient capacity to meet higher demand.Data by global research and consulting firm Persistence Market Research forecasted India’s overall aluminium beverage market for cans to double to $800,000 million by 2032 from $400,000 last year. Data showed that the country’s beverage can segment grew 8.5% between 2019 and 2023.Read More News on...moreless