2008 North American Glass Packaging Outlook

Consumers' desire for pure and healthy packaging had a positive impact on the glass container industry in 2007, which is projected to continue in 2008. Glass recycling, which has significant environmental benefits, is expected to continue its forward momentum in the commercial sector. And two new glass plants will open this year.

New science about the health impacts of packaging encouraged consumers to turn to glass, which is chemically inert and able to maintain the purity and taste of a product. Glass containers remain the choice of consumers concerned about the environment and human health. This is especially true in the organic products market. Organic consumers rate glass packaging six to eight points higher than competing packaging materials in environmental safety, true flavor, shelf life, form, purity and quality, according to a Newton marketing survey.

While issues associated with cullet quality and dispersed markets trouble some glass container recycling, glass bottle recycling at bars and restaurants is on the upswing in states such as North Carolina, Colorado, and California. 

Get details on the look ahead for the North American glass container industry: Glass Industry News, Glass Plant Openings, Glass Container Shipments, Consumer and Packaging Trends, and Glass Container Recycling.

Glass Industry News

Although the industry underwent some changes, glass producers in North America had an impressive 2007. Industry leader Owens-Illinois (O-I) more than tripled its first quarter profit from 2006 and produced a second-quarter profit in 2007 of $149.7 million, or 89 cents a share, compared with $42.6 million, or 24 cents a share, for the same period last year. Sales also jumped to $2 billion in 2007 from $1.75 billion in 2006. Much of the company's success has been credited to the new chairman and chief executive officer at O-I, Al Stroucken, who made a commitment to make cost-improvements, better glass factory operations, and increase productivity throughout the company. The Perrysburg, Ohio, company also sold its remaining plastic container operations in 2007, and now only manufactures glass containers.

Saint-Gobain Containers, Inc. and Vitro Packaging (No. 2 and No. 3 in North America) also showed sales profits in 2007 over 2006, while Anchor Glass Containers continued to recover from its Chapter 11 bankruptcy.

Glass Plant Openings

US glass container industry production was at capacity for the majority of 2007; however, in early 2008, two new glass facilities are also expected to open in the United States.

Emhart Glass, the world's leading technology supplier for the glass container industry, recently built a $20 million research center in a commercial area of Windsor, CT to develop glass-making technology for the 21st century. This investment will assist Emhart in its ongoing research to develop glass-strengthening processes that reduce shattering, and improve the speed and economics of glass production. "Green" materials and technologies will also be part of the construction and operation.

Additionally, Port of Kalama, Washington, is the site for the first wine bottle glass plant in 30 years. Cameron Family Glass Packaging, Pittsburgh, PA, recently closed a $109 million financing deal for the company to break ground. Scheduled for startup in the last half of 2008, the 175,000 square foot facility will rely on a hydro-powered electric furnace, making it the largest eco-friendly wine bottle manufacturing facility in the world. Recycling will be a top priority for the plant. Wine bottles will be made at least in part with cullet received from recycling programs in surrounding Washington and Oregon communities. The company will also recycle all water used during the glass making process. Washington State is home to more than 500 wineries, comprising a $3 billion industry that is second only to California in the U.S.

Glass Shipments

Glass container shipments were up 1.6% from November 2006 (224,891) through November 2007 (228,772), according to the Department of Commerce of the U.S. Census Bureau (Glass container shipments and production are reported in thousands gross. One thousand gross = 144,000.). Production of glass containers was flat. Glass dominates the wine and spirits markets and has a growing significant share of the beer market.

Beverages packaged in glass accounted for 75% of the global glass packaging market in 2006 and are the fastest-growing segment for glass packaging. According to a report from Global Industry Analysts, Inc., Europe accounts for about 42% of this demand. The Global Industry Analysts, Inc. report said that glass has a "premium and superior quality packaging material image" for beverages such as champagne, beer, and similar drinks and can be "fully recycled and reused."

Consumer Trends

Consumer preferences for healthy packaging, organics, and sustainability will most likely continue to drive the packaging industry and benefit the glass industry in 2008. According to The Hartman Report on Sustainability: Understanding the Consumer Perspective, released in May 2007, which reported on the consumer understanding of "sustainability" and how that understanding plays into day-to-day consumer purchases, glass containers are at the deepest level of sustainability. According to a Seattle Post Intelligencer article on the study, "the deepest shade of green translates to glass containers, recycled building material, solar panels and hybrid cars."

The consumer trend to purchase containers for purity and health had an incredibly positive impact on the glass container industry in 2007, which is projected to continue in 2008 and beyond. Consumers prefer glass packaging when it comes to maintaining the purity of foods and beverages (78 percent), preserving a product's taste or flavor (75 percent), and maintaining the integrity or healthiness of foods and beverages (82 percent), according to a 2006 survey conducted by Newton Marketing & Research of Norman, Oklahoma.

Considering the ongoing growth of the organic product marketplace (with projected sales of just under $20 billion by 2008, according to the Nutrition Business Journal), the demand for glass is projected to continually grow, as it is the premier choice for manufacturers seeking environmentally-friendly packaging for their "green" products and own sustainability goals. Indeed, organic consumers rate glass packaging six to eight points higher than competing packaging materials in environmental safety, true flavor, shelf life, form, purity and quality, according to the Newton survey.

Packaging Trends

As the majority of consumers now make their shopping decisions while standing in front of store shelves, glass will continue to innovate in 2008, using contoured glass container shapes and new technology to help brands create shelf impact.

Several brands redesigned their glass packages in 2007, including Unilever and Bertolli pasta sauces, which developed a glass jar modeled after its Bertolli Olive Oil bottle to create an "iconic" shape that continues to drive brand recognition, create a premium image, and differentiate the brand in the highly competitive pasta sauce category. Frützzo, a premium pomegranate-based organic juice beverage, also used a round contoured and ergonomic glass bottle shape to reinforce various ideals behind the brand—natural, organic, healthy, and exotic.

Coors Light used an innovative technology to create a temperature-sensitive label for its glass beer bottle. Coors Light's Cold Activated Bottle uses thermochromatic ink on the 12-ounce glass bottle, which turns the white mountains to a blue color when Coors Light has been chilled to the perfect temperature for ice cold refreshment (44ºF).

Emerging Market Segments

"Going Green" was a trend in 2007 that is projected to continue to be a viable market segment for glass in 2008. Energy and sustainability will most likely continue to affect the glass industry more than any other factors. The glass industry will also continue to be challenged to reduce its carbon footprint and develop better sustainable business models to have a greater positive effect on employees and the environments where factories are located, while simultaneously increasing its market share.

The United Kingdom is taking the lead in initiatives aimed at reducing the weight of glass food and beverage bottles. Lighter glass bottles are being manufactured to save raw materials and reduce energy use. WRAP (The Waste and Resources Action Programme) has been working since March 2006 to encourage reductions in glass waste, with several successes already. Rockware Glass, O-I, Quinn Glass and Allied Glass are all on board.

Glass manufacturer Owens-Illinois (O-I) recently worked with UK brewer, Adnams, to reduce a 500 mL ale bottle by 30% (from 450g to 300g) via a new design, narrow neck press, and blow light-weighting process, which resulted a reduction in energy, waste, emissions and use of raw materials.

Glass Recycling

According to the most recent US EPA figures, in 2005, 25.3% of glass containers were recycled. While this number has nudged only slightly each year, curbside recycling is holding steady and there are signs of increased glass container recycling efforts in the commercial sector. 
 
According to Skumatz Economic Research Associates (Superior, CO), data collected from over 500 U.S. recycling programs over the past two years shows that 75% of curbside recycling programs take all colors of glass. This is about the same for drop-off programs. Only 1% of these communities have stopped taking glass bottles for recycling. 
 
Issues associated with quality and dispersed markets continue to beleaguer glass container recycling. An uneven geographic distribution of processors and end-markets make glass recycling less practical in some areas. The quality of recovered glass coming from single stream collection also continues to challenge markets. 
 
Recycling of glass bottles at bars/restaurants, however, is on the upswing in states such as North Carolina, Colorado, and California. In Colorado, the presence of strong local glass container markets has spurred both curbside and bar/restaurant recycling in all parts of the state.
 
In North Carolina, a law requiring all ABC permit holders to recycle containers went into effect in January 2008. Training, outreach to bars and restaurants, and other promotional activities have been stepped up. Glass processors are also planning for a gradual increase in recovered glass.
 
In California, a bottle bill state, the Glass Packaging Institute, through a CA Department of Conservation grant, has provided San Luis Obispo County IWMA with a glass container collection truck and 150 3-yard containers to help add nearly 80 bars/restaurant, breweries, and wineries in 2007 to an existing commercial collection program of over 100 bars/restaurants. They expect to collect an additional 100,000 - 200,000 containers a month. 

Vitro Announces Energy Savings Plan

Vitro announced that it has signed an agreement with the Electric Energy Savings Mexican Commission (FIDE) to reduce energy consumption at all of its glass manufacturing facilities. An energy savings of up to 5% is expected in the first phase of the program.
 
In addition, Vitro will promote the switch to energy efficient equipment and expand technical training to help cut energy use. Vitro is Mexico's leading manufacturer and supplier of glass containers and is a major exporter to the U.S. Read the news release

PACKAGING TRENDS

2008 Clear Choice Awards Online
Call-for-Entries

The Glass Packaging Institute invites consumer products goods manufacturers to enter the 2008 Clear Choice Awards. Complete an online submission form today and receive industry-wide recognition as a leader in the world of glass packaging design.

All 2008 Clear Choice Awards winners receive industry-wide recognition, brand-building media coverage, and a one-of-a-kind Clear Choice Award. Winners will be announced in Las Vegas on Monday, May 5, 2008 during the Food Marketing Institute Show 2008.

"Designing your product in glass packaging responds to increasing consumer preferences for pure, premium, and sustainable products," says Joseph Cattaneo, GPI president. "With health and the environment projected to remain at the forefront in packaging, using glass containers ensures that your product has a leading edge."

Past winners include The Coca-Cola Company, Unilever, Brown-Forman, Proctor & Gamble, Anheuser-Busch, and many more!

For details on CCA rules and regulations go to www.gpi.org. There is no fee to enter. All entries must be postmarked by Friday, March 14, 2008. Enter now

LEGISLATION

State Legislators Back in Session Target Deposit Programs, Solid Waste, and GHG

Almost 30 states are back for the 2008 session and more than a dozen have started pre-filing legislation. Consumer deposit programs and related expansions appear to be the major legislative theme for the glass container industry. New Hampshire, New Jersey, Washington and West Virginia have each introduced consumer deposit program legislation, with more states expected to follow suit.

New Jersey legislators have also introduced legislation that places a recycling tax on solid waste, specifically targeting plastic containers. Virginia introduced a resolution that would require the state to undertake a study on container redemption and recovery. Vermont legislators will consider SB 307, which would amend the state's consumer deposit program and require that operators of redemption centers participate in a container commingling program. The bill would also require beverage container manufacturers or distributors to pay an additional one-half cent per container, for those that are not commingled.

Beyond traditional container related proposals, several states have followed the recent federal lead to reduce Greenhouse Gas (GHG) emissions and reduce energy usage for a variety of industries. California, New Jersey, Vermont, Virginia, Washington, have all introduced legislation that implements goals, studies and or requirements with the goal of reducing GHG emissions.

Michigan Law Limits Beverage Containers Going to Landfill

Michigan Governor Jennifer Granholm (D) signed into law SB 513, which amends the state solid waste disposal regulations. This includes the provision that more than a "de minimis" amount of beverage containers, including glass, may not be disposed of in a landfill. Additionally, landfill operators may not knowingly accept more than a de minimis amount of beverage containers. The law goes into effect March 27th, 2008.

Iowa Governor Supports Consumer Deposit Expansion

Iowa Governor Chet Culver is supporting an increase to six cents, up from five cents, for the state's consumer deposit program. This is partly in response to redemption center operators telling state legislators that they want their handling fee increased. The Governor also expressed a desire to see the program include non-carbonated beverages.

Florida House and Senate Bills Target Container Recycling

All organizations, associations, businesses, and institutions receiving state funds would be required to recycle beverage containers, including glass bottles, under proposed legislation (House Bill 301 and Senate Bill 692). This would also include the state Capitol and legislative offices. Any recycling program proceeds would go back into operation and administrative costs. If approved, the law takes effect July 1, 2008.

GLASS RECYCLING

2006 EPA Data Shows 30.7% of Glass Beer and Soda Bottles Recycled

U.S. EPA data for 2006 shows 30.7% of glass beer and soft drink bottles were recycled. Glass made up 5.3% of the municipal solid waste stream by weight, and of that, 25.3% of all glass containers were recycled. And glass bottles and jars, along with aluminum cans and some papers, have the highest level of recycled content.

In general, 2006 data shows little change from 2005. The U.S. recycling rate for 2006 was 24.3% (excluding composting), up slightly from 2005 (23.7%). And the number of curbside recycling programs, at 8,660, is still down from a high of 8,875 in 2002. Get the complete report

CA Beverage Recycling Rate Reaches High of 71%

California Department of Conservation's Six-Month Report of Beverage Container Recycling & Significant Carbon Reductions shows California's beverage container recycling rate rose to 71% January-June 2007, up from 65% for the same period in 2006. Glass container recycling was up six percentage points from the previous year as well, reaching 71% and mirroring the overall beverage recycling rate.

A total of nearly seven billion aluminum cans, glass and plastic bottles were recycled in the six month period. Of that, 1.13 billion glass beverage containers were recycled, saving 220,000 barrels of oil and reducing GHG emissions equivalent to taking 20,000 cars off the roadways each year. The CA DOC believes that the increase in California's beverage deposit refund is responsible for the increase.

Recycled Glass Gown Lands at Albuquerque Airport

A glass evening gown is one of 12 recycled fashions featured in an Albuquerque International Airport exhibit titled "Recycle Runway™: Recycling is Always in Fashion," which runs from October 2007 – January 2008. Next stops are likely to include Atlanta, Denver, Baton Rouge, and Pittsburgh airports.

Albuquerque Mayor Martin Chavez kicked off the exhibit opening. "The response has been wonderful," says Nancy Judd, owner of Recycle Runway™ and maker of the recycled clothing. "Viewers first take in the design and then they realize it's made out of recycled material."

The exhibit also highlights energy and environmental benefits of recycling each material, including glass containers. "It starts to make people think about the impact of their choices on the environment," says Judd. "That's my goal."

Commissioned by GPI in 2002, the gown is made of approximately 12,000 pieces of crushed glass from the City of Albuquerque recycling program that have been individually glued to a 1930s style evening gown made from upholstery fabric remnants. Recycled glass shoes to match, of course. Check out all the fashions

1000 WORDS

Glass is the Container of Choice—Even for an Octopus

Glass packaging is the gold standard. Even an octopus chooses glass to protect the purity, taste and quality of its favorite food and beverage products. Watch the video

Copyright © 2007 Glass Packaging Institute 

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