During the pandemic, plenty of buyers and suppliers made aggressive bets about the future. Demand was surging, capacity was constrained, and everyone was more worried about shortages than they were about oversupply.
Beverage companies locked in aluminum can volumes. Packaging suppliers expanded production. Forecasts assumed that the growth would continue.
For a while, it looked like the logic was sound, but now one of those agreements has turned into a $175.5 Million jury verdict.
Boston Beer Company (through its subsidiary American Craft Brewery) has been found liable in a dispute with one of their can suppliers: Ardagh Metal Packaging. The issue has to do with minimum can purchase requirements, and a question of whether Boston Beer Company lived up to them.
It is a situation that could easily play out in any supply chain or buyer-supplier relationship.
In this case, it ended up in court.
Contractual Capacity Commitments
This story might be about a brewer and their aluminum can provider, but it could apply in any industry. How companies make decisions in times of uncertainty, and how those decisions play out when the uncertainty lessens, is what matters most here.
American Craft Brewery is a subsidiary of Boston Beer Company, the maker of brands like Samuel Adams beer and Truly hard seltzer. According to reporting from Supply Chain Dive, Ardagh alleged that Boston Beer Company failed to purchase the minimum required number of aluminum cans stipulated in their agreement, and a federal jury ultimately sided with Ardagh.
This resulted in $175.5 Million in damages being awarded against Boston Beer Company. They insist they have done nothing wrong and that they plan to appeal and pursue other legal options, but in the short term it looks like they are on the wrong end of an attempt to manage supply risk.
Supply risk isn’t just about securing supply, it also includes living up to capacity commitments made in contracts and the difficulty of building flexibility into long-term commercial relationships during periods of extreme volatility.
Contracts Try to Keep Pace
No one wants to hear this, but to understand why this happened, we have to remember what it was like to manage supply chains in 2020 and 2021.
Demand for everything was shifting dramatically because lifestyles and consumption habits were adjusting to the shock of the lockdowns. Overnight everyone wanted a Peloton and no one could find any toilet paper.
The same shifts hit alcohol consumption, and therefore the whole associated supply chain.
Aluminum can demand exploded across beer and seltzer, but also energy drinks and soda - all of which were chasing the same supplies.
Supplies of aluminum cans became constrained, and suppliers expanded aggressively, but companies still worried about being able to secure enough capacity to keep generating revenue.
According to court documents, the agreement between Boston Beer Company and Ardagh Metal Packaging took effect on January 1, 2020. Less than three months later, that pre-COVID contract was struggling to keep pace in a pandemic world.
In December of 2020, the companies extended the contract through January 1, 2027. At the same time, they also expanded the included product scope and established minimum purchase volumes for 2021 through 2026.
This timing matters, because by late 2020 and early 2021, most companies weren’t optimizing for flexibility; they were optimizing for supply assurance. Procurement leaders everywhere faced versions of this same tradeoff: commit volume and secure capacity, or preserve flexibility and risk shortages later.
The problem is that volatility rarely stays pointed in one direction, and what seems like a great deal in one moment can become a straightjacket in the next.
Allocating Spend… and Risk
According to The Wall Street Journal, Boston Beer reported shipment volume of approximately 1.6 million barrels in Q1 2026, down 6.9 percent year over year.
Despite the significant drop, the reduction in shipments didn’t eliminate the company’s contractual obligations. What they did do is to expose the tension between demand signals and fixed supplier commitments negotiated during very different market conditions.
Reporting from DB Business News noted that many brands had locked themselves into “long-term, high-volume supply contracts during the category's explosive growth period.” Only later would they discover that those obligations became financial liabilities once consumer demand leveled off.
During periods of disruption, organizations often accept rigidity in exchange for resilience.
Then later, when markets stabilize or soften, those same protections can start looking inefficient or even punitive. Contracts designed for stable demand environments may become structurally inadequate if flexibility is not negotiated into those agreements.
Contracts don’t just allocate spend; they also allocate volatility. When market assumptions fail, the legal interpretation of that allocation suddenly matters enormously. This leaves procurement trying to secure supply without overcommitting, trying to preserve leverage without destabilizing suppliers, and trying to build resilience without locking themselves into yesterday’s forecast.
