The Gloine Chronicles:
Focus USA - Glass Packaging - Year 2021
News Column

January/February of 2021

The glass packaging industry in the United States of America continues to show both promise and difficulties as 2021 begins.
Richard McDonough reports that the COVID-19 coronavirus pandemic has substantially impacted segments
of the industry.  The trend, years in process, of beer packaging moving from glass bottles to aluminium cans
continued in 2020.  The potential for increased recycling of glass packaging – especially in the food
and beverage segments of the industry – remains to be fully implemented in the USA.

Wine bottles are seen in a production line at Ardagh Group.
(The photograph was provided courtesy of Frederick Julius Photography, November 14, 2017.)

Overall Statistics

Glass packaging is an important segment of the glass industry in the USA.  Businesses utilise glass containers to package a wide variety of items, from food and beverage products to cosmetics and pharmaceuticals.  Based on the most recent statistics, the workforce in this segment of the glass industry has steadily decreased in the past 15 years in the USA.  Those same statistics show that the value of shipments by glass container manufacturing firms has also decreased.

According to the United States Census Bureau, 13,213 people worked in glass container manufacturing in the country in 2018 (the most recent year for this report).  This statistic highlights a continued decrease in the number of workers in this segment of the glass industry.  In 2006, 14,193 individuals worked in glass container manufacturing;  in 2010, 13,834;  and in 2016, 13,636.  Payroll for people working in glass container manufacturing was (US) $897,642,000 in 2018.  This represented a slight increase from payroll in 2016 – (US) $895,757,000.

The value of shipments from glass container manufacturing firms totalled (US) $4,627,031,000 in 2018 (the most recent year for this report), according to the U S Census Bureau.  This statistic represents a decrease from the value of shipments in 2016 – (US) $5,074,286,000 – and the value of shipments in 2010 – (US) $4,937,651,000.

Glass Packaging Institute

In a recent statement, Mr. Scott DeFife, President of the Glass Packaging Institute (GPI), provided an overview of the glass packaging industry:  “Whilst alcoholic beverage consumption trends are changing, resulting in a slight decline for beer sales, other categories for glass continue to expand, highlighting a path for stronger growth in the food, organic, health and functional beverages, wine and spirits categories.  The societal and economic response to the COVID-19 crisis has accelerated in-store grocery purchasing and has given the industry an opportunity to remind consumers about the long-term stability of glass packaging for food and beverages, as well as medicine and pharmaceuticals.”  The GPI describes itself as “the trade association for North American glass container manufacturers and the entire supply chain.”

The GPI indicated that “Through the third quarter, overall glass container food and beverage shipments are down a little over two percent, but up in key categories like food jars (up ten percent YTD) and non-alcoholic beverages (up about two percent).”

“Although the glass packaging industry, like many others, has experienced challenges due to the COVID-19 pandemic, there have been bright spots during this time,” Mr. DeFife continued.  “A significant increase for in-store grocery purchases in 2020 has given the glass packaging industry a unique opportunity to remind the general public of the long-term sustainability of glass packaging for food and beverages.  The economic impact of the pandemic has exposed the need to redouble efforts to collect more post-consumer glass for recycling and reuse and helped policy-makers better understand the connection between recycling and domestic manufacturing output.  With more officials looking to build stronger, more resilient domestic supply chains, glass has a great opportunity to fill those needs.”

The GPI has focused much of its attention on sustainability issues and how to encourage more recycling of glass products in the USA.  The organisation cited 2017 recycling percentages from the U S Environmental Protection Agency (EPA):  39.1% for beer and soft drink glass bottles, 39.1% for wine and liquor glass bottles, and 15.1% of food and other glass jars;  overall 33.9% of all glass containers were recycled.  The organisation also cited statistics from the Container Recycling Institute:  States with container deposit legislation have an average glass container recycling rate of just over 63%, whilst non-deposit states only reach about 24%.

“GPI and our members are engaging in conversations to boost recycled content to meet brand customer sustainability goals and industry environmental objectives,” stated Mr. DeFife.  “These conversations have become even more important as the pandemic persists and demand for safe and sustainable packaging rises.  The GPI has made some direct grants to communities to bolster their glass recycling infrastructure, and with help from the Glass Recycling Coalition (GRC) whose mission is to educate and inform consumers about glass recycling and work together to help address problem areas.  The GRC has made intervention grants to communities, and helped spin up the Glass Recycling Foundation (GRF), which is taking over that role within the coordinated glass industry stakeholders.”

Ardagh Group

Ardagh Group, headquartered in Ireland, is a global company with metal and glass production facilities in 12 countries, including 13 glass manufacturing facilities in North America.  “Ardagh Group, Glass – North America is currently the largest domestic glass container supplier to the food, spirits and wine industries in the United States,” said Mr. John Shaddox, Chief Commercial Officer of Ardagh Group’s Glass – North America.  “For more than 125 years, Ardagh Group has been producing innovative glass bottles in the U S.”

Public reports issued by Ardagh Group indicated that the Glass – North America business unit had revenue of $1.246 billion for the nine months ending September 30, 2020 versus $1.287 billion during the same period in 2019.

Mr. Shaddox noted the COVID-19 coronavirus has affected the glass packaging industry in the U S:  “The packaged food industry has experienced increased demand, due to an overall increase in at-home consumption.   Other segments, primarily those within the alcoholic beverage market, have seen disrupted sales, due to restrictions that have impacted on-premise consumption opportunities.”

“The COVID-19 pandemic continues to evolve, and the assessment of the potential impact is still ongoing for many businesses,” Mr. Shaddox continued.  “Ardagh continues to prepare to react quickly to adjustments in demand from our customers.  Whilst the demand for packaged food could normalise in 2021, the consumption of alcoholic beverages could experience an upward trend through increased opportunities for on-premise consumption.”

Ardagh Group sees opportunity for growth in the USA in 2021 and beyond.

“According to Euromonitor, U S consumption of food and beverage products packaged in glass are expected to increase overall in 2021 as compared to 2020,” detailed Mr. Shaddox.  “Euromonitor is also projecting increases in overall U S consumption of products in glass for 2022, 2023 and 2024, when compared to the prior year, as well as for each of the respective markets – beer, non-alcoholic beverages, food, spirits, and wine.”

The ability to utilise cullet – recycled glass – to produce new glass products has been critical to the operations of the company. “Ardagh is a leader in the use of recycled glass content in Europe and aims to grow its use of cullet in North America,” explained Mr. Shaddox.  He noted that the company “is an active member of the Glass Packaging Institute (GPI) and the Glass Recycling Coalition…Glass – North America promotes sound energy, environmental and recycling policies.”

Arglass Yamamura

Arglass Yamamura also sees growth opportunities in the USA.  The firm is building a new manufacturing facility in Valdosta, Georgia.  Production began at the plant in December of 2020.  “We are certain our products, our flexibility and service will be appreciated and welcomed by our customers,” stated Mr. Luis Gonzalez, Vice President of Sales and Marketing at Arglass Yamamura.

Mr. Gonzalez indicated that among the products the firm will be producing at this facility are “glass containers for the spirits, wine, beverage, and food industries.”He explained that glass products will be “mostly in flint colour with the possibility of producing a wide array of colours as well.”

This is a rendering of the new facility being built by Arglass Yamamura in Valdosta, Georgia.
(The photograph was provided courtesy of Arglass Yamamura.)

Sales will focus initially on the USA, but Arglass Yamamura is also “eager for business in the Caribbean countries and others that may need our high quality bottles,” according to Mr. Gonzalez.

Much as with Ardagh Group and others in the glass industry, Arglass Yamamura sees sustainability as a key element of the glass industry.  “We hope to play a very important role in recycling of glass by trying to simplify the process and hopeful to be able to capture as much glass from Georgia and neighboring states for our facility,” said Mr. Gonzalez.  “Sustainability is a core value at Arglass Yamamura, and we will do as much as we can to improve and increase the recyclability of glass bottles in our immediate area of influence.”

A depalletiser for glass bottles is seen here at Hamburg Brewing Company, Hamburg, New York.
(Photograph provided courtesy of Ska Fabricating.)

Ska Fabricating

One indication that growth may be possible within the glass container industry comes from Ska Fabricating.  This business produces bottle and can depalletisers as well as pre- and post-fill equipment that allows customers to get their product packaged and distributed.  Ska Fabricating is based in Durango, Colorado.

“We build machines that are hand-crafted to move glass safely and efficiently down a packaging line,” stated Mr. Jim Mackay, CEO of Ska Fabricating.  “From jars to bottles to pharmaceutical containers, our depalletisers unload full pallets of glass vessels of all shapes and sizes onto packaging lines for cleaning, filling, capping, labeling – you name it.”

“When it comes to serving the brewing industry, our bread and butter, glass has always been a favorite choice,” Mr. Mackay continued.  “As we’ve grown and expanded to industries beyond beer, we’ve seen environmentally-conscious businesses choosing glass (or cans) over PET/plastic more frequently than ever.  We’ve taken a stand against the use of plastic and in favor of glass and aluminum by turning down any business that deals in PET/plastic containers.”

According to Mr. Mackay, “2019 seems like a lifetime ago.  We grew our business about 30% that year from 2018.  We have already surpassed our 2019 sales and revenue after 3 quarters [in 2020].  COVID-19 has driven consumers to buy packaged drinks that they can take home, and that has been very good for us.”  He sees potential for innovation in 2021:  “One of our biggest goals in the coming year is to create a bigger, better machine that can handle more glass/weight, so we aren’t actively attempting to turn away from glass by any means.  If anything, we’re leaning in.”

National Beer Wholesalers Association

One of the changes seen in the glass packaging industry for a number of years has been a transition from glass bottles to aluminium cans for beer packaging.  “At the end of 2019, about 30% of beer in the USA was sold in glass bottles and about 60% was sold in aluminium cans, and about 10% was draft beer,” stated Mr. Lester Jones, Chief Economist of the National Beer Wholesalers Association.  “During the past ten years, glass packaging has lost about one percentage point each year, whilst aluminium cans gained about one percentage point annually.  Draft sales have been relatively consistent during the years – until 2020.  The closure of bars and restaurants due to the COVID-19 coronavirus devastated the draft beer market.”

Mr. Jones related that changes in the beer market have helped fuel the changes in packaging.  As craft beers became more mainstream, he indicated that aluminium cans were more likely to be used in packaging for off-premise sales.  He also noted where beer is consumed generally impacts the type of packaging chosen by consumers.  “Packaging follows occasions,” Mr. Jones continued.  “Cans are more likely to be the packaging of choice on boats, whilst hiking, or sitting at a concert.

Sherpa Chai

Whilst the beer industry has seen a shift from glass to aluminium for packaging, some other types of businesses have shifted to glass containers from other types of packaging.

“We use a 32 oz Amber Boston Round glass bottle for our shelf-stable tea concentrate,” stated Mr. David McKean, CEO of Sherpa Chai, LLC.  “We supply a Chai tea shelf-stable concentrate product that is a family recipe and has been passed down through the generations. Our typical customer is 65% female and between the ages of 15 and 65.”  The firm is based in Lafayette, Colorado, and focuses on sales within the USA.

The company previously used plastic bottles.  “We have found that our customers prefer the glass look and feel,” remarked Mr. McKean. “Our customers also value the environmental benefit of a recyclable product.”

Three of the varieties of products sold by Sherpa Chai.  (The photograph was provided courtesy of Sherpa Chai.)

Mr. McKean indicated that sales have increased each year since the company was founded in 2014.  He detailed that Sherpa Chai did about (US) $400,000 in sales in 2018, and about (US) $775,000 in sales in 2019.

The COVID-19 coronavirus pandemic impacted Sherpa Chai.  According to Mr. McKean, there was “one set back:  [we] lost almost all retail sales due to COVID-19, but anticipate it to bounce back at the beginning of 2021.  Considering the pandemic, we are still doing very well despite the changes in retail with the loss of income.  We have been able to take this time to review our product offerings and concentrate on future endeavors.  We are still looking to process $1.3 to $1.5 million [in revenue] this year, and next year, we looking to due $2.5 million in sales.”

That level of projected revenue may be altered depending on the course of the pandemic in 2021.  “If COVID-19 is still with us next year, we are unlikely to see the coffee shop business return,” continued Mr. McKean.  Coffee shop business “was 40% of our pre-COVID-19 revenue.  This would likely make us readjust our goals.”

Dietary supplements sold by Live Wise Naturals are sold in glass bottles.
(The photograph was provided courtesy of Live Wise Naturals.)

Live Wise Naturals

Health care products are one of the larger segments of the glass packaging industry.  Live Wise Naturals, a company that sells dietary supplements, uses glass to package its products.  “We use glass bottles and droppers,” stated Mr. Greg Bulgarelli, President of Live Wise Naturals.  “We chose glass over plastic due to the fact that plastic interacts with some ingredients and can also leach into the products.”

Unlike many businesses, Live Wise Naturals has seen sales increase, according to Mr. Bulgarelli, year-over-year:  “Live Wise Naturals is on pace to finish Q4 [of 2020] with sales up 50%...COVID-19 has actually helped our sales.”

The business is based in Bradenton, Florida.  Sales are currently focused on the USA market, with the company indicating that it intends to expand more internationally in the years ahead.

The glass packaging industry shows promise in a number of segments even as some market segments, like the beer industry, are likely to continue to see a decrease in overall usage of glass bottles.  Investments continue to be made among large manufacturers that see opportunities for future growth in the USA and beyond.  The fact that glass is a product that can be recycled on a continuous basis will likely continue to place glass in a key position when businesses and consumers consider sustainability.

Do you have questions about the glass industry?

Governmental regulations? Company operations?

Your questions may be answered in future news columns.

Contact Richard McDonough at gloinechronicles@gmail.com.

© 2021 Richard McDonough