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. Last Updated: 07/27/2016

$3M Campaign Sells Beer Drinkers on Cans

Photo by ITAR-TASSA $3 million television campaign advertises aluminum cans as a preferred package but does not promote any specific brands.
Two aluminum can makers have launched a $3 million television advertising campaign to wean Russian beer drinkers off the bottle.

The Russian subsidiary of Rexam PLC, the world's largest beverage can maker, and Russian Aluminum's subsidiary Rostar have put aside their rivalry to work together on improving the image of cans among bottle-bred beer drinkers.

"We started the campaign last year and are continuing now with the slogan: ?The aluminum can -- one more reason to love your beer,'" said Anto Saar, Rexam Russia's marketing director, in an e-mail interview last week.

And consumers appear to be listening. Rexam Russia recorded a 50 percent increase in sales of aluminum cans from last year.

The collective advertising campaign spent $1 million last year and plans to spend another $2 million this year to dispel commonly held myths about beer in aluminum cans.

"People are under the impression that beer in cans has preservatives, but that belief has decreased by 20 percent since the beginning of our campaign last year," said Saar, quoting research done by Rexam. "Another myth is that canned beer retains a metallic aftertaste; this is impossible because of a coating on the inside of every beverage can that prevents the beer from ever coming in contact with aluminum."

The campaign introduced two short commercials on all major Russian television channels last June. In total, three commercials were developed by ARS communications, Somerset Hart and the Dago and Top Film Studios. "We have to make some final adjustments to the music in the last video, which will be aired in October," said Olga Kotova, client services director of ARS communications.

The commercials do not advertise specific breweries but promote aluminum cans as a preferred package for beer in general. But Kotova said the cans in the commercials do have the basic color schemes of popular beer brands.

The similarities to trademarked labels do not worry breweries Bravo International and Baltika.

"We don't mind that they're using our image because it's also in our interest that the canning industry develops; it gives us more options," said Maxim Dozmarov, head of Baltika's department of marketing.

But more importantly, say proponents in the beverage industry, cans work out to be more economically viable than bottles. In the short term, the difference is negligible; brewers and can producers said the cost to the beverage producer for both bottles and cans hovers around 3 rubles (10 cents).

But over the long term, said Rostar's marketing director, Vladimir Nichiporuk, the benefits are numerous. "Cans take up less space, weigh less, carry cheaper labels and are 100 percent recyclable as opposed to bottles, which today are cleaned and can be reused no more than 10 times due to heat exposure in the pasteurization process," he said.

But this is not to say that the conventional bottle will die out.

Both aluminum cans and glass bottles have a niche to fill, said Matthew Brown, former deputy editor of The Canmaker, a global canning industry trade magazine.

"Because bottles tend to be more expensive than cans in economies of scale, they are the perfect container for premium beers," he said. At the same time, "there is no point in pouring mass market beer into a container that costs more than the beer itself."

Only 0.07 percent of beers were canned last year, Nichiporuk said. This year that figure increased to between 3 percent and 4 percent.

The rise in the amount of beer being sold in the can doesn't translate directly into a rise in sales for the two Russian-based firms, however. Nichiporuk says that Baltic Beverage Holdings, which through its Baltika and other brands is the largest beer producer in Russia, buys its cans from Can Pack, a Polish aluminum-can producer. Carlsberg Breweries owns a 50-percent stake in BBH and has a worldwide agreement with Can Pack to supply the cans for its breweries.

The Rexam Russia and Rostar sites are the only two factories producing aluminum cans in Russia. Rostar opened its plant in the Moscow region in 1998 at a cost of $100 million. Rexam Russia's plant -- also located in the Moscow region -- opened the same year with a price tag of $150 million. The European Bank for Reconstruction and Development put up $45 million of the cost and holds 30 percent of Rexam Russia's shares.

Rexam's factory Rexam 6 predicts output to top off at 1 billion cans this year, a 50 percent increase on last year's figures, while Rostar's production volume is to equal 1.5 billion cans.

Nichiporuk said canning in the beer industry will only continue to grow. "By 2005, I expect 30 percent of all beer will be sold in cans," he said.