Glass Container Industry in the USA
The glass packaging industry continued its growth in some areas during 2022, whilst seeing less demand in certain segments of the market according to the Glass Packaging Institute (GPI). This organisation represents the North American glass container manufacturers and suppliers to the industry with the majority of its member companies in the US.
“For 2022 (through the third quarter), the domestic glass container industry has shipped about 16.2 billion bottles and jars to customers (brands) and similar end markets,” said Scott DeFife, President, Glass Packaging Institute. “Shipments of glass jars destined for food brands increased nearly 3% (Q3 2022 vs. Q3 2021), with glass beer bottles levelling off, after experiencing Q1 growth, shipments are down about 5%. All end market categories combined are down just over 1%, through the third quarter.”
Mr DeFife continued by noting that “through the third quarter of 2022, vs. 2021, our data shows an additional 61 million spirits bottles had been shipped to customer end markets, a rise in the wine bottle shipments in the same time frame of 31 million bottles, as well as an additional 4 million bottles for non-alcoholic beverage brand customers.”
Imports of glass containers – both those imported as bottles only as well as those filled with food and beverage products – impact the glass packaging market in the US.
“Whilst the domestic industry has seen growth in key end market categories, and witnessed stabilisation in others, the US consumer marketplace has considerably more glass bottles and jars to choose from,” stated Mr DeFife. “Through September, imports of filled beer bottles (tracked in volume by the US Commerce Department) has grown 5%, which is followed by two years of near double digit growth.”
“Similarly, imports of empty glass containers, (to be filled by brands in the US), are up through August by nearly 288 million containers,” he continued. “This also reflects several continuous years of glass container import growth, as measured by the US International Trade Commission. Of note, Mexico has overtaken China as the largest importer of glass bottles and jars, further supporting and expanding a growing North American supply chain.”
Among external forces affecting the industry, Mr DeFife noted that “with the impacts of Covid-19-connected port and rail congestion now largely behind us, the glass container industry remains well positioned to serve its brands and customer partners.”
He explained that “the US glass companies have portals open for smaller and medium sized customers to purchase their bottles directly, and are working cooperatively with their container distribution network to service those customers relying on delayed imported containers. The US glass container industry is fortunate to have its raw materials for production (sand, soda ash and limestone) located in-country, further reducing delays in production and delivery.
“The association is active in combating any narrative that a ‘glass bottle shortage’ exists, and frequently responds to and informs interested media and customer bases on alternative avenues to obtain glass, for those customers largely reliant on imported glass,” stated Mr DeFife.
Recycling and recovery of glass products continue to be an important part of the sustainability efforts in the glass container industry.
“GPI remains involved with efforts to improve glass recycling on multiple fronts,” explained Mr DeFife. “As Oregon, Maine, California and Colorado, begin to rollout their Extended Producer Responsibility programmes (the four states with such initiatives in place) for packaging via regulations, the association is continuously and proactively meeting with staff, stakeholders and third party organisations to ensure more, high-quality, recycled glass can be processed and purchased by the container end markets.”
“We are also carefully messaging the importance of ‘fee fairness’ to brands choosing glass containers for their food and beverage products,” Mr DeFife continued. “We want to ensure that there is no financial penalty for choosing glass, based either on weight or any other arbitrary metric, and that glass should be ... [incentivised] for sustainability and recycled content reasons.”
He also noted that the “GPI is working on Hub and Spoke Aggregation sites for remote areas with high concentrations of glass in a couple states, and we have modelled lease-purchase financing agreements to help Materials Recovery Facilities (MRFs) invest and install more glass cleaning equipment so that glass that is being collected but not recycled can be diverted from landfill and returned to the recycling supply chain. Lastly, we have supported successful efforts to invest in and expand container deposit programmes, as well as reuse and refill programme.”
Details on a number of the leading businesses that manufacture and utilise glass containers are detailed below.
“Ardagh Glass Packaging – North America (AGP – North America) is currently the largest domestic glass packaging supplier to the food, spirits and wine industries in the US,” said John Shaddox, Chief Commercial Officer, Ardagh Glass Packaging – North America. “With 14 strategically located production facilities throughout the US, AGP – North America designs, develops and manufactures 100% and endlessly recyclable glass bottles and jars for the food and beverage markets.”
The glass operations in the US are part of a global enterprise. “Ardagh Group is a leading glass and metal packaging producer globally with annual sales of approximately (US) $10 billion,” Mr Shaddox stated. “Currently, Ardagh Glass Packaging has operations in the US, Europe and Africa.
According to a report from Ardagh Group, AGP – North America saw that its “revenue increased by (US) $75 million, or 6%, to (US) $1,389 million in the nine months ended September 30, 2022, compared with (US) $1,314 million in the nine months ended September 30, 2021. The increase in revenue reflected the pass through of higher input costs, partially offset by unfavourable volume/mix effects.”
Mr Shaddox noted that AGP – North America “is focused on the long-term growth of its business by partnering with strategic customers that are aligned with its investment objectives and value glass as a sustainable packaging choice for their brands.”
An example of these efforts by the firm were detailed in a news statement dated 8 September 2022. For almost 25 years, AGP – North America and Ste. Michelle Wine Estates have worked together “to implement sustainable solutions to protect the environment, including the most recent initiative of transitioning to Ardagh’s ECO Series glass bottles.”
“By transitioning one traditional glass bottle into Ardagh’s ECO Series glass bottles, Ste. Michelle was able to reduce its environmental impact,” noted the news statement.
“Making sustainable packaging choices, like selecting the ECO Series glass bottles for our portfolio of wines, is a highly impactful change we can make towards reducing our overall carbon emissions,” said Juan Muñoz- Oca, Chief Winemaker at Ste. Michelle Wine Estates; he also leads the organisation’s sustainability practice. “Not only does it make good business sense, but perhaps most importantly, it’s the right thing to do.”
Sustainability endeavours are found throughout the operations of AGP – North America.
“AGP – North America sources cullet [...] from many locations throughout the US, depending upon colour, availability, quality and economics,” said Mr Shaddox. “There are many benefits to using cullet, and a 10% increase in cullet reduces energy requirements by 2-3%, particulates by 8%, nitrogen oxide by 4% [and] sulphur oxides by 10%.”
Recycling rates in the US are lower than the rates in Europe. According to the 2022 Ardagh Group Sustainability Update Report, AGP – North America averaged 39% cullet in the glass bottles and jars it produced in 2021.
“We recognise the challenges with the US recycling rates, as AGP – Europe averaged 68% cullet during 2021,” Mr Shaddox stated. “Ardagh is directly engaged with a number of customers and suppliers to increase glass recycling and recovery rates in the US.”
He referenced the commitment that AGP – North America has made to the Glass Packaging Institute’s plans to raise the US glass recycling rate to 50% by 2030 and to boost the average use of recycled content in domestically-made glass containers.
Mr Shaddox is involved in a number of civic organisations that strive to encourage recycling of glass products in the US, including the Glass Recycling Coalition, the Glass Recycling Foundation, and the Container Recycling Institute.
Stoelzle Glass Group
Stoelzle Glass Group operates a glass manufacturing plant in Monaca, Pennsylvania. The company celebrated its first year in the USA in the Spring of 2022. On 14 April 2022, the company issued a news statement detailing that Stoelzle Glass Group had modernised the facilities at this location and intends to continue to enhance plant production lines.
“Since acquiring the Monaca, Pennsylvania plant, Stoelzle has found success with important customers such as Bulleit Bourbon, whilst also focusing on the local market, with distilleries such as Middle West Spirits, taking the company to new heights in the local and prestige spirits niche markets,” according to the news statement. “Stoelzle has also modernised and refurbished plant facilities, whilst simultaneously improving employee safety measures and morale. Within the upcoming year, Stoelzle will completely relaunch a new production line, in order to advance bottle manufacturing.”
August Grupp, Head of Spirits Business Unit, Stoelzle Glass Group, explained the firm serves “a wide variety of customers across business units, including Spirits, Pharmaceutical, Perfumery and Cosmetics, Food and Beverages, and more. Our customer base ranges from small start-up companies consisting of less than 100 employees, all the way to larger organisations with thousands of employees. We run the gamut, but overall, with all customers, we focus on premium and high quality glass. More recently, we have also began offering a One-Stop Shop solution, though which we not only provide glass, but also design and closure options.”
He indicated that the company focuses on global customers, and at the same time, serves local distillers and companies. He stated that Stoelzle Glass Group works with “global brands on a variety of spirits and specialties projects. We continue to expand the markets and partnerships.”
“The last year-and-a-half have brought a tremendous amount of change to the US site,” Mr Grupp stated. “We made a successful product mix change to focus on the growth of our spirits business. We had heavy new product development activities and started to produce well-known, iconic brands. This success is a reflection of our employees at the Monaca plant who have embraced this change positively.
“We have had a steady business in 2022, very fortunate, given global supply chain demands,” he continued. “The global supply chain was impacted by a wide variety of factors in 2022, including but not limited to, freight cost increases, unstable glass supply due to high demands worldwide, energy increases and labour shortages. Additionally, Covid-19 has certainly had an impact on our business.”
Growth is anticipated to continue in the coming year. “We are fortunate to be in a position to look forward to growing our customer base and our focus on the growth in general,” said Mr Grupp. “We believe the markets we serve will remain strong with organic growth and new product innovation. The consumer trends across the spirits category continue to show a rise in consumption rates across a variety of liquids. We will continue to analyse our markets to determine how best to serve the growing demand and capitalise in helping our customer base stay relevant and strong.”
South Central Kentucky Economic Development, an entity of the Bowling Green Area Chamber of Commerce, welcomed the announcement by O-I Glass that it was building a new manufacturing facility in the Kentucky Transpark in Bowling Green, Kentucky. This announcement, held on 28 July 2022, indicated that 140 new jobs will be created during the first phase of operations at the new facility. Initial construction was noted to include a plant with more than 160,000 square feet, with more expansions to follow. The company indicated that it plans to invest up to (US) $240 million in multiple expansion waves over time. Start of the first production line is expected mid-year 2024, according to O-I, followed by up to two more production lines to serve the growing market.
“We continue to target new employers for the Commonwealth [of Kentucky] that are focused on longevity, sustainability and creating quality jobs for Kentuckians,” said Andy Beshear, Governor of Kentucky. “O-I Glass is
a company that meets all of that criteria and more. This new facility in Warren County will create great job opportunities for our residents and bring innovative new technology to Kentucky’s manufacturing sector. Thank you to the leaders at O-I Glass for selecting the Commonwealth for this significant investment. I look forward to a long, successful partnership between the company and our State.”
According to O-I, “the new plant will be the first facility purposely- built for O-I’s revolutionary MAGMA technology that is set to redefine the glass production process for the future. MAGMA is expected to further enhance O-I’s capabilities to support multiple product categories and expand in today’s highly differentiated product segments. The production facility is also expected to set new standards in sustainable glass manufacturing. Using renewable electricity, gas-oxy fuel and other innovative solutions, it will significantly advance O-I’s sustainability roadmap and make glass an even more compelling choice for consumers, customers and the environment.”
This new facility is expected to produce products for the premium spirits category, the company indicated in a news statement.
“O-I is determined to be the most innovative, sustainable and chosen supplier of brand-building packaging solutions,” stated Andres Lopez, Chief Executive Officer of O-I Glass. “The new plant is an important milestone as we continue the pursuit of our expansion plan in the US and globally, building a bright future for the company and its stakeholders. Glass is more relevant than ever, and we are proud to support our customers with innovative solutions.”
Local officials also expressed strong support for this new plant. “O-I has a reputation for excellence that has led to jobs for over 24,000 employees in 19 different countries,” noted Todd Alcott, Mayor of Bowling Green. “We are thrilled that they have chosen to grow and invest in Bowling Green.”
Warren County Judge-Executive Mike Buchanon stated that, “For a company with a national and international footprint, Warren County offers tremendous advantages. Our workforce is diverse, with over 85 languages spoken here. When combined with our central location and superior transportation accessibility, our community continues to succeed as a top choice for companies like O-I Glass.”
The leadership of the Tennessee Valley Authority (TVA) and the Warren Rural Electric Cooperative Corporation (Warren RECC), regional energy providers, also welcomed the expansion of O-I into this area of the US.
“TVA and Warren RECC congratulate O-I Glass on its decision to establish operations and create new job opportunities in Bowling Green,” said John Bradley, Senior Vice President of Economic Development at TVA. “TVA is proud to partner with the Bowling Green Area Chamber of Commerce and Kentucky Cabinet for Economic Development to support new job creation and investment in the region and look forward to O-I Glass’s business success in the Commonwealth.”
Dewayne McDonald, President/ Chief Executive Officer of Warren RECC, stated that “We are excited to welcome O-I Glass as a new Warren RECC member. We look forward to working with them as they grow their world-class business right here in Warren County.”
A major bottler of Coca-Cola products is working to expand the use of cullet in its beverage operations. A news statement dated 3 May 2022 reported that Coca-Cola Bottling Company UNITED is partnering with O-I Glass to capture more recycled glass to be created into new glass bottles. The firm indicated that it has a goal of using 50% recycled material in its bottles by 2030.
“We previously sent our glass bottles to a local recycler that used the material in fibreglass,” said Corey Tucker, Warehouse and Logistics Manager at the production centre of Coca- Cola Bottling Company UNITED in Marietta, Georgia. He explained that the centre’s recycled glass will now “be taken to O-I’s plant in Danville, Virginia, and remade into new glass bottles.”
Coca-Cola Bottling Company UNITED, founded in 1902 and headquartered in Birmingham, Alabama, is the second largest privately held Coca-Cola bottler in North America and the third largest bottler of Coca-Cola products in the US.
“We started to look at all of our recyclables and where they end up,” stated Tammy Stubbs, Sustainability Director for Coca-Cola Bottling Company UNITED. “We contacted O-I because they supply our glass bottles and we learned that they have a team dedicated to increasing glass recycling. The team at O-I is laser-focused on implementing solutions to allow more glass to be recycled and used in glass packaging.”
Through the partnership, Coca-Cola Bottling Company UNITED indicated that it expects to recycle more than 700,000 out-of-date and damaged bottles annually.
Sammy Holaschutz, Recycling Systems Development Leader at O-I noted that “our ability to increase the average recycled content in O-I containers largely depends on the amount of recycled glass available. We need others in the glass value chain – our customers, other industries and certainly consumers – to help increase glass recycling rates. The action taken by Coca-Cola UNITED to promote recycling and circularity sets a strong example.
In the Summer of 2022, Gerresheimer AG announced that it was investing up to (US) $94 million in an expansion project in Morganton, North Carolina. The global company, headquartered in Germany, indicated that this expansion would “increase annual production capacity for glass vials in the US significantly.”
“The project will be supported by the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response (ASPR) at the US Department of Health and Human Services (HHS) with contracting support from the Department of Defence (DOD),” according to the news statement dated 9 August 2022. “It will expand Gerresheimer’s capacity by new vial forming lines, including dimensional inspection, annealing, cosmetic inspection and packaging. BARDA has agreed to provide up to approximately (US) $66 million to Gerresheimer AG for this project. The investment is part of Gerresheimer’s global expansion plan...”
“Under the agreement, Gerresheimer will increase its annual production capacity in Morganton [...] with interchangeable Type 1 vials (glass borosilicate and/or aluminosilicate) and Gx Elite Glass Vials capability,” the news statement continued. “BARDA’s financing, with contracting support from the DOD’s Joint Programme Executive Office for Chemical, Biological, Radiological and Nuclear Defence (JPEO-CBRND) and the Army Contracting Command (ACC), will strengthen the capabilities in the US to respond to current and future public health emergencies. The vials can be used in vaccination campaigns against infectious diseases, such as Covid-19 and others. This expansion of the facility will further strengthen Gerresheimer’s leading market position in best-in- class elite vials.”
As part of the project, the company indicated that its existing facility in North Carolina will be enlarged by the installation of new vial forming lines and a new warehouse; new offices will also be part of the expansion plan.
“Gerresheimer is honoured to support the US government in strengthening its pharmaceutical supply chain for current and future healthcare emergencies,” said Dietmar Siemssen, Chief Executive Officer of Gerresheimer AG. “The agreement confirms our role as a supplier of system critical products, such as pharmaceutical primary packaging solutions and drug delivery systems for the healthcare sector.”
The company stated that it “is committed to sourcing the vast majority of its raw materials from US domestic suppliers in order to enhance the levels of responsiveness, dependability, quality and domestic supply chain integration.”
Civic activities are an important part of business life for glass packaging companies in the US. A scholarship programme spearheaded by Arglass Yamamura is an example of these community efforts.
On 27 July 2022, Arglass Yamamura and Gas South announced a (US) $20,000 donation to the Wiregrass Foundation South for full- time students attending Wiregrass Georgia Technical College in Valdosta, Georgia. The funds will be utilised by the college to award (US) $1,000 scholarships to deserving students over the next 20 semesters.
“Arglass is proud to partner with Gas South and Wiregrass Technical College in launching the Arglass-Gas South Scholarship for students at the Valdosta campus,” said José de Diego Arozamena, the founder and Chief Executive Officer of Arglass Yamamura. “In addition to furthering our commitment to the local community, many of our best team members are graduates of Wiregrass, so we know first-hand the critical skills and technical training that Wiregrass provides.”
The manufacturing plant of Arglass Yamamura is located in Valdosta; the facility opened in December of 2020. The news statement noted that Gas South, headquartered in Atlanta, George, “has served as a key partner with Arglass from the start of its entrance into the US market, ensuring Arglass’s (US) $123 million plant was both operationally and financially sound.”
“The success of our customers and communities, especially local youth, is of the utmost importance to our team,” said Kevin Greiner, President and Chief Executive Officer of Gas South. “Giving (US) $20,000 in scholarships to Wiregrass Georgia Technical College to help develop the workforce for Arglass is another way we’re living out our purpose to ‘Be A Fuel For Good.’ We’re here to make a difference in the communities we serve, and the difference is good.”
The news statement indicated that “whilst any student in the industrial systems technology programme is eligible to apply for the scholarship, preference will be given to Arglass employees and family members of Arglass employees. The scholarship will help students cover general expenses, such as tuition, books, and fees.”
Wiregrass Georgia Technical College was established in 1963. It is active in educating people in technical training and skills as well as in workforce development in South Georgia.
“Wiregrass is very appreciative to our partners at Arglass and Gas South for this generous donation,” stated DeAnnia Clements, President of Wiregrass Georgia Technical College president. “As they’ve seen through their own workforce, our industrial systems technology programme is filled with talented students that will see even more opportunities thanks to this gift.”
Additional details on the overall glass industry in the USA will be published in another news column in the March/April issue of Glass Worldwide.