by Elliot Maltz | Kawika Pierson | June 21, 2022
Case Synopsis
The case details the evolution of Schilling Cider from a small regional craft cider producer to a national brand operating in thirty states in the hard cider industry. A major factor in their evolution was their early commitment to preprinted aluminum cans as a more sustainable and economical alternative to the standard packaging in the industry—bottles.
Having established itself it is now faced with a challenge. One of Schilling’s main suppliers of the printed aluminum cans they rely on to package their craft hard cider has announced much larger minimums orders for a run of preprinted cans.
This has major implications for how Schilling manages their inventory and plans their product mix but does not threaten Schilling’s business model as they are now large enough to meet the minimums. However, it has very profound implications for the sustainability value proposition of aluminum cans for the broader craft cider industry.
The announcement directed customers who could not meet its new minimum to a group of distributors with the ability to “shrink sleeve” cans. Preprinted cans have the logo and labeling of the product printed directly on the can. Shrink sleeving involves printing the logo and labeling on specially treated film and then using heat to shrink the film around the can. Unfortunately, shrink sleeving makes aluminum cans much more difficult to recycle greatly reducing the environmental benefits of aluminum cans vs. glass bottles.
As a major player in the hard cider business and one of the driving forces for the movement to aluminum cans Schilling has to decide how to respond to this change by its supplier.
