Alex Fordham examines the prospects for the global metal packaging business in 2021, as the industry emerges from the Covid-19 pandemic

Although at present we dare not admit it, for historians of metal packaging, the 2020 archives will be looked upon positively from a business perspective, despite the immense challenges that have been involved for us all.

Notwithstanding the challenges of logistics, capacity being far below demand and the health challenges associated with the Covid-19 pandemic, 2020 was also the year that may well prove to be a ‘perfect storm’ for the packaging format we hold dear.

Before delving further, it’s important to note the sad loss of friends, family and colleagues we have all been lost as a result of the Covid-19 pandemic, and we look forward to honouring their memory, when we’re all able to join together as an industry once again.

With large parts of the globe having faced lockdown restrictions and public events and gatherings curtailed for many months, we’ve seen a boom in home consumption, particularly in terms of two-piece beverage cans, as entertaining moved from public to private. Added to this is the increasing focus on The Global Reset concept by the World Economic Forum, which places sustainability and environmental issues at the fore.

In the year that is the 85^th anniversary of the beverage can, in terms of an overall market picture, will this boom seen in 2020 be sustained?

Long term growth

In a recent article for the metal packaging trade press, SLAC Group’s chief marketing officer, Chris McKenzie, outlined how “The can has risen to iconic status due to its ability to be stored easily, long shelf life and ultimate recyclability, and this reinvention of our culture will have lasting impact”. Strong words to describe the metal cans credentials for longevity, but so far the statistics appear to be backing up the rhetoric.

Some interesting statistics from Ball Corporation’s chief executive officer, John Hayes, appears to back up McKenzie’s bullishness. Speaking to US news service CNBC back in September, he said of Ball’s growth: “When you think about it, people drink cans at home. People have been stockpiling and that’s certainly been a benefit to us.

“Prior to the pandemic we have been forecasting 2-3 per cent growth per year globally, but for the foreseeable future we’re likely to see double that, so a 4-6 per cent growth.”

This confident growth forecast has been reflected in expansion of manufacturing facilities. The recent months have seen an explosion of new manufacturing facilities planned, in an attempt to keep up with forecasted growth. In the last three months alone, the industry has been greeted with the following developments:

• New aluminium end manufacturing facility in Bowling Green, Kentucky, US (Ball Corp)
• A new high-speed aerosol can line at its DeForest, Wisconsin, US, can manufacturing plant. (Ball Metalpack)
• Beverage can plant in KazAlPack, Kazahkstan 
• In Huron, Ohio, US, a conversion into a manufacturing plant producing infinitely recyclable beverage cans and ends. (Ardagh Group)
• Italian tinplate manufacturer opening a new metal packaging facility in West Virginia. The facility will be opening in 2022. (Gruppo Fanti).

Indeed, a well-respected can maker who has worked within the industry for 30-years, who wished to remain nameless, remarked: “The industry is pretty much booming at present and although we shouldn’t say it, Covid-19 and the stay at home culture is the main driver.

“We have seen a huge rise in demand since around August last year, hence the need to quickly expand.”

The global can making market growth

Back prior to the pandemic, market research agency Mordor Intelligence valued the metal packaging mark as expecting 2.23 per cent growth up until 2025. In its report  Metal Cans Market – Growth, Trends, and Forecast (2020 – 2025), “the report concluded that the high recyclability of metal cans is one of the significant drivers of the market”.

But with Covid-19, this figures has now been revised by some market researchers. In its report by published Kentley Insights titled Metal Can Manufacturing – 2021 U.S. Industry Market Research Report with COVID-19 Updates & Forecasts, this figure has now been revised to predict up to six per cent year-on-year market growth. Indeed, the report states that “over the past three years the industry has grown at an annual rate of 5.8 per cent”.

But dividing our market analysis of cans into segments, what are the trends and statistics seen in the respect areas of beverage, food and aerosol?

Beverage cans

In the report The Future of Metal Packaging and Coatings to 2025, a new report from Smithers Pira, the in-depth report from industry veteran Mark Smyth examined the potential impact of Covid-19. Although the report stated that the market would initially contract, the market would see exponential growth as a result. The report stated it its synopsis:

“The Covid-19 impact is estimated to be minimal with $0.3 billion contraction followed by an estimated $7.4 billion growth between 2020 and 2025 when the market is estimated to be 446 billion beverage cans – an annual growth rate of 4.2 per cent or an additional 16.5 billion cans per year,” the report’s synopsis says.

Similarly, Researchandmarket.com estimates the beverage cans market size is estimated to reach $17.24bn by 2025, growing at a CAGR of 4.9 per cent during the forecast period 2020-2025, in its “Beverage Cans Market – Industry Analysis, Market Size, Share, Trends, Growth And Forecast 2020 – 2025″ report.

The report itself was keen to outline that increased consumption of canned beverages, particularly due to the increased consumption of canned beverage consumed at home, is driving demand. However, the report was keen to stress the varying costs of raw material will be a challenge for manufacturing beverage cans moving forward…

Food cans

With regards food cans, the sector globally is forecasted to grow at a more modest 3.86 per cent during the period 2020-2025 according to Research and Markets’ Global Canned Food Market: Growth, Trends and Forecasts (2020-2025).

This growth was seen prior to the pandemic due to the rise in urban population, particularly in South America and South East Asia, and in the west, where a rise in the limitation of plastics packaging on the environment, a demand to eat fresher and healthier products, was beginning to resonate.

There is view that canned foods isn’t a ‘sexy’ topic, but it’s unquestionable that the Covid-19 pandemic has seen a boom in purchasing. Throughout the world we saw picture of many consumers stock piling food cans as the pandemic began to take hold globally. Whether post pandemic-this will see a continuation of this trend remains to be seen, but it’s unquestionably been a shop window into the benefits of the food can due to its safety, useability and sustainable record.

However, in terms of demographics, the food cans business is set to explode in Asia Pacific. In a report by Transparency Market Research: Food Cans Market Attractiveness Analysis by Region 2020-2027, five per cent growth is expected, due to the increasing consumption by a developing the middle class. In its press launch, the report detailed:

“Geographically, Asia Pacific holds 18 per cent of the global food cans market, and is expected to expand 1.4X its current value by the end of the forecast period, the report said. “In Asia Pacific, the food cans market is expected to create an incremental opportunity of ~US$ 2.4 Bn and projected to expand at a CAGR of ~5 per cent over the forecast period.

“Furthermore, China leads the charts in the Asia Pacific region, in terms of both, production and consumption of canned food products. This can be attributed to the busy lifestyle of the millennial population who do not prefer investing time on elaborate recipes.

“The ASEAN countries, such as Vietnam and Malaysia are emerging as key regions for the food cans market. The Asia Pacific market is expected to grow rapidly for food cans due to booming industry with a large population that is ready to spend on processed and packaged foods.

“The Asia food cans market can, therefore, be regarded as an extremely competitive market, and is projected to offer the food cans market with remunerative possibilities.”

Aerosols and General Line

The aerosol cans market was valued at USD 10.24 billion in 2019 and is expected to reach USD 12.32 billion by 2025, at a CAGR of 3.13% over the forecast period 2020 – 2025, according to Mordor Intelligence and its report Aerosol Cans Market- Growth, Trends and Forecast (2020-2025).

This strong growth is attributed to the growth of domestic care products in the developing world. In addition to this, aerosol cans in the automotive and DIY sector is helping to foster this growth. And with the growing anti plastic sentiment among young consumers, the sustainability message is helping to drive the aerosol market.

Although too early to analyse, there is expectation that paint and general line cans may well see a renaissance, as a result of the pandemic. Robert Fell, head of MPMA (the Metal Packaging Manufacturers Association in the UK), outlined in the newly launched ‘Metal Pack Pod’ podcast for the industry, that: “As an association we’re expecting growth in paint and general line cans. Due to the pandemic, we’re seeing a boom in domestic DIY and renovation products as individuals increasingly spend more time at home.”

The Covid-19 pandemic has certainly shone a light on the benefits of metal packaging, and with restrictions likely for the next few months, the industry will certainly continue to prosper. The challenge comes post-pandemic; will can consumption fall in line with the numbers pre-pandemic, or will this growth be sustained?

Time will tell, but there has never been a better opportunity as industry professionals to take advantage of positive trading conditions. The challenges of keeping up with demand over the next 18 months will also prove to be challenging, but with plant expansion promised in 2021, the can making industry is mobilising to navigate this problem.

ENDS

Alex Fordham is managing director of Connective Press Group Ltd. He is the owner of The Metal Packager – the essential resource for metal packaging professionals.

The Metal Packager is aimed at metal packaging professionals globally. The resource offers news, features, podcasts, WhatsApp broadcasts, a directory, newsletter and social media coverage, in an easy-to-read, mobile-friendly format. Hopefully this is pushing the metal packaging industry into the 21^st century with a digitally focused resource.

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