Make It

How beer in a can became hot (Hint: hipsters are involved)

Tomohiro Ohsumi | Bloomberg | Getty Images

Once associated with the "crummy beer your dad drinks," the humble aluminum can has seen a renaissance within the craft beer industry as a thirsty new generation of drinkers across the globe give it another look.

The canned craft beer trend started in the United States and is now spreading to Europe, Asia and South America. The cans found favor within the "hipster" subculture before recently landing in a prominent place in mainstream supermarkets and grocery stores.

"It's starting to spread around the world," Peter Love, third-generation CEO of Canada-based Cask Brewing Systems, said in a phone interview.

Love's company, which offers canning systems to small and medium-sized craft breweries, has customers in 34 countries including Australia, Croatia, Belgium, India, Chile, Peru, Bhutan and even in Norway's Svalbard islands just 800 miles from the North Pole.

"There's been a perception of 'Well, my dad drinks canned beer' ... and it's taken a while to get over that," Love said, adding that millennials have now embraced the style of packaging due to the generation being big on the kind of "sustainability" the product offers.

Why cans?

There are obvious benefits of a can being 100 percent recyclable. Aluminum or steel cans are able to return to the store shelf in three months, according to the U.K. trade body The Can Makers, although there is research suggesting benefits for both bottles and cans in this area.

But industry types list a range of other factors. No light penetrates a can that may damage the flavor, which is "particularly good for very hoppy beers," according to Neil Walker, marketing manager at SIBA (the U.K.'s Society of Independent Brewers). The seal is also tighter than a bottle cap, so an airtight can helps to keep the beer's freshness, according to the brewers. (Bottles can also adequately keep beer fresh if filled and stored correctly.) Cans also chill much faster than bottles.

Cans are lighter and cheaper for distributors to ship, and easier and more convenient for the end consumer. Martin Constable, chairman of The Can Makers, told CNBC that the "minimum order quantity" is usually lower and cans come "fully printed" with a label. A falling aluminum price — amid a broader slide in commodities — has only helped the argument.

David Ward, a sales manager at Australian Brewery, which claims to the first craft brewer in Australia to package exclusively in cans, explained to CNBC why it has paid off for his company.

"As the costs are significantly higher for craft over macro brewing, you need to constantly innovate with an eye for maintaining and improving the quality of the beer. With zero light, less oxygen and environmental benefits canning was an easy decision," he said via email.

Walker said a can is one way a small craft brewer can "really set themselves apart" from the crowd. Some brewers are even pushing the design to the extreme with "edible" biodegradable rings for six-packs.

The expanding market

Global beer consumption in general may be down but craft beer has proven to be a lucrative growth sector — albeit still a tiny slice of the overall market. And the statistics for canned craft beer show growth.

Around 55 percent of all beer consumed in the U.S. is served in an aluminum can, according to the Beer Institute. But drilling deeper, the Brewers Association estimates that canned craft beer volume in the country increased to 10 percent of total craft volume in 2014 from 2 percent in 2011. This was an increase of nearly 2 million barrels, or around 1 percent of the total U.S. beer market.

"As craft occupies a larger share of overall beer and brings more beer lovers into the craft category, it is only natural that some of that growth will come from adopting practices in the larger industry," Bart Watson, chief economist for the Brewers Association, said in a report last October.

Additionally, suggests there are 548 craft brewers in the U.S. canning 2,138 different beers. This is up from 200 craft breweries canning 600 beers in 2012.

In the U.K., canned craft beer has begun to appear on the shelves of established food stores like Marks & Spencer, and there's a festival — now in its second year — devoted to the indie beer can. The Can Makers estimates that total can deliveries were 9.628 billion last year in the U.K. with 10.37 million in craft beer. Already 50 percent of that figure has been achieved in the first quarter of this year.

Meanwhile, SIBA says the U.K. market has grown from four brands using cans two years ago, to more than 100 this year. Analysis group Mintel adds that 16 percent of all craft beers launched in the U.K. this year have been packaged in a can, up from 8 percent for all of 2015.

Elsewhere, Nina Anika Klotz, a Berlin-based journalist who runs an online craft beer publication, told CNBC that cans have been appearing in local stores since last year. Stone Berlin, BROY and BRLO as just three brands that she highlights that — have taken to this type of packaging.

"We'll see more cans in the future, I'm sure," she said via telephone.

Top-line figures

Yann Ropars | Oskar Blues

The prime example of the recent growth that the industry can manage comes from Colorado's Oskar Blues Brewery, the first craft brewery in the U.S. to brew and hand-can its beer. After producing 150 barrels of beer in 2002, it has surged to 192,000 barrels last year. The brewery reportedly filled 50 million cans with fresh beer in 2015, achieving over 30 percent growth in year-over-year sales.

Love's canning company has achieved 30 percent revenue growth in last five years, and he's predicting the good times to continue. Australian Brewery's Ward says it has generated major volume for the company.

"Some of the biggest craft brewers in Australia have also adopted the format along with (for better or worse) the hipster movement," he said.

There's even an mergers and acquisition story in the sector, although little evidence that this boom in sales has fueled any willingness for a firm to let go of its cash. Last year, Colorado's since Ball Corp. unveiled a $6.38 billion takeover of U.K.-listed rival Rexam, which the Financial Times reported would be the world's largest maker of metal drinks containers.

And into Asia

Rob Trent, a globe-trotting craft beer enthusiast who writes a blog dedicated to Asia beer, has seen cans creep into some markets in the region, but with varying success.

"In the Philippines only 2 of about 30 craft breweries are canning their product. The consumers do not see canned beer as of high quality as bottled beer due to lack of education," he told CNBC via email.

Jessica Rinaldi | The Boston Globe | Getty Images

However, he believes that "funky artwork" on cans and the ability to market to resorts will definitely help boost demand.

In India, he noted that cans are used by most of the macro brewers due to local laws restricting bottling and even kegging. China also has tough regulations on small breweries to start bottling or canning, he added.

"Korea recently has seen two craft breweries venture into cans, however laws inhibit smaller breweries from being able to offer their products on the retail level," he said. "Overall, it will take a great shift in education to consumers to get them to look positively towards canned craft beer. The can will suit places like The Philippines well as transport, light exposure and environmental concerns will be key selling points."

The challenges

As well as a minefield of varying national laws on labeling, many industry experts point to an image problem being the major hurdle. More specifically, brewers say that many consumers still fear a metallic taste, and some are concerned that it might even just be a gimmick that quickly fades.

Cans now have a water-based polymer lining that eliminates any metallic flavors, and brewers usually suggest pouring a beer — regardless of the packaging — into a glass. But it just still proves too much for some.

"It is really only the older generation 45-plus that have these worries, and it is just a throwback to when cans were tin or steel and not the aluminum we use," Ward told CNBC.

"It is literally a placebo thing," he added.