Back to top

Image: Bigstock

Metal Can Makers Investing in Capacity to Meet Strong Demand

Read MoreHide Full Article

The can industry, which manufactures light metal cans that are used as beverage and food containers from aluminum or steel, has been witnessing unprecedented demand over the past few years. Owing to increasing awareness about the environment, customers have been preferring cans over plastic. Cans help increase the shelf life and maintain the quality of the food, and is the world’s most sustainable and recycled packaging option. Changing lifestyle choices, population growth and increasing disposable income have also led to the shift in preference. The beverage and food can industry witnessed a surge in demand amid the COVID-19 pandemic as customers opted to buy multiple packs of beverages and canned food for at-home consumption.

North America is expected to command the largest share in the beverage cans market share in the foreseeable future. Developing markets have witnessed higher growth rates owing to rising population and increasing consumer spending, and consequent escalation in beverage consumption. The increasing health consciousness among consumers has led to high demand for healthy and nutritious beverages in the United States. Due to the growing consumer awareness regarding environmental pollution, can makers have been striving to bring sustainable packaging solutions. By 2025, the global beverage can industry is projected to grow by approximately 100 billion units.

To capitalize on this growth, manufacturers are aggressively increasing their capacity. Westminster, CO based Ball Corporation , which makes aluminum packaging products for the beverage and other products, recently announced that it intends to build a new multi-line aluminum beverage-can packaging plant in North Las Vegas, NV. This plant is anticipated to commence production at the end of 2022. North Las Vegas is an apt choice for the plant, given its proximity to customer can-filling investments, rising beverage can packaging demand in the region, proper infrastructure and regional labor base. Ball Corp has been investing in projects across North America, South America and EMEA, which are expected to add at least 25 billion units of contracted beverage can capacity by year-end 2023 (off a 2019 base of 100 billion units).

Another can maker, Yardley, PA-based Crown Holdings, Inc. (CCK - Free Report) that offers steel and aluminum cans for food, beverage, household and other products has also been implementing several expansion projects. The company recently announced the addition of a new beverage can plant in Mesquite, NV. This two-line state-of-the-art facility will supply standard and specialty beverage cans to its diverse beverage customers serving carbonated soft drinks, energy drinks, sparkling water, beer, hard seltzers, and ready-to-drink cocktails. The plant is scheduled to commence operations in the second quarter of 2023. This investment will not only aid Crown Holdings to serve its existing customers in the Western United States but also support the expansion of new beverage can plants in order to meet customers’ heightening demand for aluminum beverage cans. By the end of 2022, it expects to have 97 billion units of annualized global beverage-can capacity, which indicates a 28% expansion from the 2019 base.

Both Ball Corporation and Crown Holdings fall under the Zacks Containers - Metal and Glass industry. Another player in the industry, Stamford, CT-based Silgan Holdings Inc. (SLGN - Free Report) , which makes metal food containers, has increased its overall share of the metal food container market in the United States from approximately 10% in 1987 to slightly more than half of the market in 2020 via acquisitions and organic growth. Additionally, it continues to make significant capital investments to enhance the competitive advantages of metal packaging for food. Ardagh Group S.A. another company in the same industry continues to invest in its growth projects.

In-Depth Zacks Research for the Tickers Above

One ticker, your choice, absolutely free ($25 value):

Silgan Holdings Inc. (SLGN) - free report >>

Crown Holdings, Inc. (CCK) - free report >>

Published in