The world’s largest can manufacturer, Ball Corporation, reported can volumes increased 7% in 2021 as demand for aluminum packaging continues to outstrip supply.
The company shipped 112.5 billion cans in 2021, after adding 12 billion cans of new capacity. Ball added new plants in Glendale, Arizona, and Pittston, Pennsylvania, in 2021, and will add new facilities in North Las Vegas, Nevada, and Concord, North Carolina, in 2022 and 2023, respectively. Those new plants will give the company 12 billion cans of added capacity by the end of 2022, but the majority of that future inventory is already spoken for.
The company’s aluminum can inventory is “oversold” in 2022 and supply will be “tight” in 2023, said Dan Fisher, who was promoted this week to CEO as John Hayes transitioned out of the role he’s held since 2011. Hayes will remain chairman of the board.
Fisher, who previously served as Ball’s president, said 95% of Ball’s future capacity is contracted. He said the company is benefitting from a “decadal shift” to the packaging format.
“The sustainability tailwinds are so pronounced,” he said. “And the commitments are now so public from our customer base that they are going to have to move into aluminum to hit those goals.”
Fisher added that consumer behaviors have “changed over the last two years” with added at-home consumption, which “overwhelmingly benefits aluminum packaging.”
“We’re planning longer-term, in terms of maturity and supply,” he said. “And I’m kind of bullish on that segment for the foreseeable future.”
Ball reported that beverage packaging in North and Central America generated $5.9 billion in sales, and $681 million in operating earnings.
Sales in 2021 were up from $5.1 billion in 2020, although operating earnings trailed slightly at $683 million.
Fourth-quarter beverage packaging sales reached $1.5 billion, with operating earnings of $162 million. That’s an increase from the $1.3 billion in sales and $139 million in operating earnings in Q4 2020.
Driving those increases were “higher shipments, the contractual pass through of higher aluminum costs and improved price/mix,” the company reported.
Overall, Ball generated $13.8 billion in sales, with net earnings of $878 million, in 2021. That’s up from $11.8 billion in net sales and $585 million in net earnings in 2020.
Fisher said soft drinks, energy drinks and sparkling water grew for the company last year. However, domestic beer was down in North America, and hard seltzers and craft beer were down slightly.
Nevertheless, Fisher said Ball’s partners “are winning in the marketplace” and the company had “minimal exposure” to the slow down in hard seltzer.