Industry: Cans v. Bottles

With competitive materials such as aluminum, concrete and plastics steadily cutting into its traditional markets, the U.S. steel industry is going through a harrowing test of its metal. But in one great competitive battle—cans v. glass bottles—the steelmakers are on the attack.

Cans have taken 37% of the $430 million-a-year beer container market away from bottles, and now they are looming bigger in the soft-drink container business. Fortnight ago, Continental Can Co. reported that sales of its soft-drink cans were running 40% ahead of last year. Canned soft drinks were almost unknown nine years ago; they are expected to account for about 5% (or 1.8 billion cans) of the market this year. By 1970, predicts Jones & Laughlin Steel Corp.’s commercial research department, cans will have 15.2% of the business.

Strong Drinks. Though beer went into cans without trouble, it took years of research to find inside coatings that would resist the acids in soft drinks, (In early trials, grape soda came out of the can a nauseous white.) Once the problems were licked, the steel companies and canmakers spared no expense to publicize some advantages that cans have over bottles, i.e., they are unbreakable, lighter (and hence cheaper to ship), and do not have to be returned. To persuade soft-drink manufacturers that their ads ought to feature happy citizens swigging their soda pop from cans, both American Can and Continental Can offered an advertising rebate of 5¢ per case to those who switched to cans. Since local bottlers might not be able to afford their own canning equipment, American Can financed strategically placed canneries across the country.

Bottlemakers, who were slow to awaken to the can threat in the beer business, are fighting back harder on soft drinks. Individual bottle producers are giving soft-drink companies 10¢ a case ($3,500,000 a year) in advertising subsidies to push bottles, and the Glass Container Manufacturers Institute is spending $1,500,000 this year to boost the virtues of glass (“Glass is pure, never alters original flavors . . .”).

In Baby Bottles? The glassmakers have one economic advantage in the fact that bottles are reusable. Though a bottle initially costs 7¢, it can be refilled an average of 26 times—by which time the cost per filling is negligible. (By contrast, each can costs soft-drink producers from 3½¢ to 4½¢, and can be used only once.) To compete in another way, the glassmakers have taken to producing throw-away bottles—which, to needle their rivals, they have dubbed “glass cans.” At 3½¢ apiece, throw-away bottles are more expensive than reusable ones, and cost-more to ship than cans. But largely because of their convenience, throw-away bottles last year took 1.3% of the soft-drink container market. Sid F. Davis, vice president of Owens-Illinois Glass, thinks that by 1970 throw-away bottles and cans will each get about 10% of the soft-drink business. How the public feels about bottles v. cans is hard to tell—obscured by the contradictory market surveys rolled out by the steelmakers and glassmakers. Loudest in favor of cans are supermarket operators, who find them easier to stack and are glad to be rid of the bother of taking back “empties.” Small soft-drink bottlers, in general, prefer reusable glass—partly because they make less profit on canned drinks, and partly because they fear that the lower shipping costs of cans will make it possible for the major soft-drink brands to get along with fewer local bottlers. As for the major drink producers, they are using cans, “glass cans” and reusable bottles indifferently and happily pocketing their advertising rebates. Says a Coca-Cola spokesman: “We’ll put our Coke in baby bottles if that’s what people want.”