Novelis signs agreement with Coca-Cola
Novelis has announced it has signed a new long-term contract with Coca-Cola Bottlers’ Sales & Services Company, which is the contracting agent for The Coca-Cola Company’s authorised North American bottlers (“CCBSS”).
Under the agreement, Novelis will supply Coca-Cola’s authorised North American bottlers with aluminium can sheet for The Coca-Cola Company’s family of iconic brands. This includes supply from Novelis’ plant in Bay Minette, Ala., which is currently under construction and expected to begin commissioning in 2025. Under the agreement, The Coca-Cola North American bottlers, through the CCBSS and Novelis agreement, have committed to purchasing a confidential volume of aluminium can sheet over a multi-year period.
“This new long-term contract builds on a decades-long relationship between Novelis and the Coca-Cola system, and further strengthens Novelis’ position as the leading provider of aluminium for beverage cans,” said Steve Fisher, president and CEO of Novelis. “This contract validates our investment in expanding rolling and recycling capacity in North America and solidifies a strong future for sustainable aluminium as the beverage packaging material of choice.”
The contract includes an agreement for closed-loop recycling, highlighting both companies’ commitments to sustainability. Through closed-loop recycling programs, Novelis directly takes back the manufacturing scrap generated during the can making process, recycles it and converts it into new can sheet, which is then made into new beverage cans. In addition to this continuous loop, Novelis recycles more than 80 billion used beverage cans per year into new aluminium for beverage packaging. These efforts result in lower-carbon products, as recycling aluminium is approximately 95% less energy intensive than making primary aluminium, resulting in 95% less carbon emissions.
Novelis expects demand for aluminium beverage can sheet to grow at a 3% compounded annual growth rate from 2022 to 2031. The demand growth is driven by consumer preference for more sustainable products and size variety, as well as more beverage types being packed in cans, including water, energy drinks, soda, beer, wine, hard seltzers and ready-to-drink cocktails.
Dan Coe, chief procurement officer of The Coca-Cola Company, stated that “the evolving role on behalf of The Coca-Cola Company and our Bottlers is to build a resilient domestic supply chain, thus enabling sustainable long-term growth. We recognise Novelis as a leader in sustainability, committed to supporting our 2030 World Without Waste Targets.”
Demonstrating the strength of the aluminium beverage packaging market, the majority of the Bay Minette plant’s capacity for beverage can is already contracted.
Novelis’ new, low-carbon facility in Bay Minette will be the first fully integrated aluminium manufacturing and recycling plant built in the US. in nearly 40 years and is expected to create up to 1,000 new jobs. Boasting an initial capacity of 600,000 tons of finished goods for the North American can and automotive markets, it will be powered by renewable energy, use recycled water and operate as a zero-waste facility. Additionally, Novelis is working toward a goal of achieving net carbon neutrality at Bay Minette.