Ball Corp. bullish on aluminum packaging

Executives of Broomfield, Colorado-based Ball Corp., in announcing its 2019 results and holding a corresponding earnings conference call, has expressed confidence in the future of aluminum packaging, pointing in part to shifts away from single-use plastic.

According to S&P Global Platts, in an early February conference call with investment analysts, Ball Corp. chair, president and CEO John A. Hayes said the drive by brand owners to use less plastic has meant that “three years ago, a third of all new products coming out were in cans, but today it’s 70 percent, and that’s a meaningful jump.”

The situation represents the potential reversal of a decades-long trend that has seen aluminum can makers facing a shrinking soft drink market share in the face of explosive plastic bottle share growth. In 2019, according to Hayes, one of Ball’s major challenges was instead insufficient aluminum can production capacity—a challenge Ball Corp. says it is poised to meet.

In reviewing the company’s 2019 results, Hayes refers to “global customer and consumer demand for aluminum packaging solutions continuing to outpace existing supply.”

Both in reviewing 2019 and looking ahead to 2020, the company referred to aluminum scrap prices as a factor in its financials. According to the Ball Corp. website, “Approximately 87 percent of the total waste generated by Ball is metal manufacturing scrap.” The firm says 2019 included “unfavorable U.S. aluminum scrap rates,” while looking ahead to 2020 it sees the “mitigation of U.S. aluminum scrap headwinds.”

Ball Corp.’s role as both a generator of scrap and a consumer of recycled-content aluminum in North America is likely to grow in 2020. The company points to “improved manufacturing performance” at its new Goodyear, Arizona, facility” while its “new production in Georgia and Texas ramps up in the second half of 2020.”

In South America in 2019, Ball Corp. says “industry beverage can demand remained strong as customers continue to shift packaging mix from returnable glass to aluminum cans, and new categories including wine, sparkling beverages, spiked seltzers, mixed drinks and still water launch[ed] their brands in cans.”

In Europe, likewise, Ball Corp. says it sees “customers adjusting their packaging filling assets to aluminum beverage packaging from single-serve plastics.”

In recent weeks, Ball Corp. unveiled new aluminum single-serve cups at Super Bowl LIV in Miami and unveiled a new line of aluminum bottles for multiple applications.