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Summary of our market study
As of 2020, the metal packaging industry is experiencing a vibrant growth phase, with packaging awards in the UK acknowledging innovative designs in aerosol cans, paint cans, and beverage containers. The industry has three dominant players in the UK - Ardagh, Ball, and Crown – which, despite their strong presence, face a market that is volatile and affected by external factors including Brexit and global trade tensions. The UK market itself, while relatively stable in value, has seen a shift in production volumes across various segments, with personal care products accounting for the largest usage of cans. Recycling remains a crucial selling point for the industry, with aluminum recycling rates seeing a significant boost during the COVID-19 pandemic as household recycling surged. Key challenges moving forward include navigating increased production costs due to political uncertainties and potentially shifting trade dynamics post-Brexit and in light of ongoing international trade negotiations.
Evolving Dynamics in the UK's Metal Packaging Market
The UK metal packaging market, a subset of the global industry, is currently experiencing significant shifts influenced by various factors, including consumer behavior, regulatory changes, and larger global economic trends. With an annual production of approximately 14.5 billion metal packages, the UK holds a notable position within the EU market, contributing about 15% of the total EU production. In the domestic sphere, the metal packaging landscape is witnessing a sharp focus on sustainability and recycling as major trends. The country has seen remarkable recycling rates with approximately 70-80% for steel and more than 70% for aluminium beverage cans. These figures are even more striking in light of the recent impact of COVID-19, which appears to have heightened public awareness and action on recycling, especially for aluminium packaging. The market structure is concentrated with a few major players, namely Ball, Crown, and Ardagh, which lead the industry in metal packaging production in the UK. The revenue for the sector, nevertheless, has faced volatility over the years. Specifically, industry revenue has seen a decrease of around 6%, primarily due to fluctuations in the prices of steel and aluminium alongside extraordinary events such as a global crisis in the steel and aluminium industry that occurred in 2016. Demand within the market varies across product categories, with personal care products consuming almost three-fourths of manufactured cans. Household products also command a significant share of the market demand.
Production volumes are estimated to be relatively balanced between tinplate (between 40-45%) and aluminium (between 55-60%) for cans, which underscores the pervasiveness and importance of both materials in the industry. Additionally, macroeconomic factors have played a role in shaping the market. Brexit, for instance, presents potential challenges and uncertainties that may affect the industry's financials through increased raw material prices, labor shortages, and potential shifts in trade dynamics. The global trade war also had implications for the sector, particularly with tariffs impacting the cost of metals and thereby affecting the end consumer prices, which could, in turn, adjust demand patterns. Despite these challenges, the market has several strengths to rely on. The intrinsic qualities of metal packaging, like durability, space efficiency, and preservation capabilities, combined with the high recyclability of metals, contribute positively to the industry's appeal and growth prospects. Moreover, there's an increasing demand for metal-based healthcare products, which adds another dimension to the market's dynamism. As the UK metal packaging.
Key Manufacturers Shaping the Metal Packaging Industry Landscape
The metal packaging market is characterized by the presence of several pivotal players that have established a strong foothold in this domain. While they vary in terms of market reach and specialization, each contributes uniquely to the industry's overall tapestry. Notable among them are global giants such as Crown Holdings, Ball Corporation, and Ardagh Group, each wielding considerable influence within the market. In addition to these international leviathans, the landscape is also graced by smaller local players such as MacBey Metal Packaging and Roberts Metal Packaging, whose operations, although comparatively modest, are critical in their niche markets.
- Crown Holdings stands out as a stalwart in the manufacturing of metal packaging, providing an array of solutions ranging from beverage cans to food containers and metal closures. The company's extensive experience and commitment to innovation have made it a go-to partner for brands looking for reliable and state-of-the-art metal packaging options.
- Ball Corporation mirrors this prowess, particularly known for their expertise in crafting beverage packaging. As one of the largest producers of metal beverage cans in the world, Ball's influence echoes through the corridors of the market, reflective of its venerable heritage and technological advancements in making packaging more sustainable and customer-friendly.
- Ardagh Group, another name synonymous with packaging excellence, extends its reach across various types of metal packaging. It’s not uncommon to find an Ardagh stamp on products adorning supermarket shelves, demonstrating their significant production capabilities and versatility in producing packaging for a broad array of products.
- The market is also characterized by the agility of smaller enterprises such as MacBey Metal Packaging, which, despite their scale, are incredibly responsive to market needs and capable of providing specialized metal packaging solutions. This firm's smaller size allows them to offer personalized services that larger companies may not be able to match in terms of flexibility and turnaround times.
- Roberts Metal Packaging is yet another example of a dynamic and innovative player in the industry. Renowned for their high-quality tinplate and aluminum packaging, they cater to a range of sectors, including cosmetics and healthcare, underlining the sector’s diversity in product applications.
Together, these companies form a robust framework for the metal packaging industry, with the larger players driving mass production and global distribution, while the smaller entities complement by filling niche gaps and offering bespoke solutions. Their joint efforts ensure that manufacturers of all sizes have access to a wide variety of metal packaging options, benefitting retailers and consumers alike with quality, sustainable, and versatile packaging choices.
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Summary and extracts
1 Synthèse du marché
1.1 Definition and scope of the study
Metal packagings refer to steel and aluminium packagings, such as cans or tins, which preserve foods, hygiene products, beverages, etc.
The metal packaging market is divided into several players: mineral and petrochemical producers (bauxite, soda, carbon), suppliers (steel, aluminium), packaging producers, end users (industry, trade, transport-storage). In this study we cover the latter three categories.
The global metal packaging industry is expanding in size and sales, amid the attractive features of metals in terms of durability, space efficiency, preservation, and recyclage. Nevertheless, metal packaging holds a fairly small share in overall packaging (12.2%), which implies that the material has great potential for expansion going forward. [all4pack] This development is most likely going to come from developing economies and Asia, where India for example is looking to increase usage of aluminium cans from 5% to some 25% in 2030.
Metal manufacturing revenue in the United Kingdom is relatively volatile. In value terms, the market has stayed more or less the same since 2012, with a dip in 2016 caused by a global crisis in the steel and aluminium industry. Beverage cans dominate production with around 62% of cans produced pertaining to the beverage category.
Recycling is a hot topic in the industry; both steel and aluminium, which makes up the majority of the market for metal packages, especially in cans, have very high recycling rates. In the UK, COVID-19 has proved to be monumental for recycling of aluminium cans in particular; households have embraced more stringent recylcing rates amid the fact that individuals are staying home more and thus consider recylcing aspects to a larger extent.
1.2 The global market is in full bloom
The metal packaging industry is in full bloom; between **** and ****, the market is expected to grow at a CAGR of *.*% to reach US$ *** billion by ****.
Global market size for metal packaging World, ****-****, in US$ billion Source: ****
Several factors are driving this demand. First, the intrinsic traits of metal packaging, including its preservative features, contribute to the convenience of this means of packaging. Indeed, metal packages permit an extended shelf life, preservation of taste, and nutrition intactness. Secondly, metals are highly recyclable. Steel and aliminuim have the highest recycling rates of all package materials, which correlates to overall demand in society for a more sustainable product development. MPMA states that **% of all steel ever produced is still in circulation today. Finally, demand for metal-based healthcare products, including trays, metal sterilizers and tablet wrappers are increasingly in demand.
Although the Western World is dominating current demand for metal packages, Asia in particular is recording the highest growth numbers, devoted to a rapid pace of urbanisation which puts pressure on communities to find solutions for products to be consumed in a sustainable manner and with limited negative externalities. In light of this, India has for example created a consortium named the Aluminum Beverage ...
1.3 A volatile domestic market
According to the Metal Packaging Manufacturers Association, **.* billion metal packages are produced each year in the UK. In the EU the equivalent figure is ** billion units. The UK thus represents **.*% of total production in the EU and UK.
Below is a breakdown of production per product segment. All figures are taken from MPMA.
Beverage Cans
Around *.* billion beverage cans are manufactured each year in the UK. This is equivalent to around **% of total production.
Canned Food
In December ****, the retail sales value of canned foods amounted to £*.* billion. In the same year, the sales volume was *.* billion units. Moreover, in a given year, **.*% of households in the UK purchase canned foods. In other words, the penetration rate of this category is almost complete. Canned food represents around **% of production of metal packages in the UK.
Aerosols
In this product category, some *.* billion aerosols are filled in the UK each year. This equals a market share of around **% of total production.
Metal packaging in the UK, by volumes produced per product The United Kingdom, ****, in % Source: ****
The market for metal packaging production in the UK is volatile. Between **** and **** the market shrunk by some *%, to reach $*.** billion in ****.
This volatility is due ...
2 Analyse de la demande
2.1 2020's packaging awards
This section looks at the UK Metal pack of the year in ****, and the nominated finalists. [***] This provides an overview of which metal packages in cans are currently the most appreciated, both from a suppliers point of view and from the client side. Indeed, design is vital to this industry as it is what creates a visual appeal and thus increases chances of sales. Moreover, it seems for personal hygiene products that the ability for a can to seal its' content is highly regarded as a feature. Finally, cans prevail in this year's competition with three out of seven nominees.
Camden Heroes – Ardagh Group
Motivation: "A re-design of previous cans which aims to raise money for healthcare workers"
Edward Bulmer Plastic Free Paint Can – P.Wilkinson Containers & William Say
Motivation: "Eye-catching design with folded tinplate handle"
Fishers Gin – Crown Packaging European Division
Motivation: "Striking design presenting an authentic coastal spirit"
King C Gillette Soft Beard Balm – Roberts Metal Packaging
Motivation: "Leak-proof, resealable and tactile with real shelf presence"
Naked Collective Mude – Ardagh Group
Source: ****
Nice Wines – Ardagh Group
Motivation: "New quarter bottle size cans, energetic design in three colour patterns"
Tullamore – Crown Packaging European Division
Motivation: "High quality finish, rich colours ...
2.2 Demand per product category: cans
In ****, the volume of cans manufactured in the UK consisted **% (***) of aluminium. [***]
The charts below break down what type of can was manufactured the most in **** based on production volume. This helps provide an idea of which categories are in highest demand, since production correlates directly to demand.
Distribution of can manufacturing per product category United Kingdom, ****, in % Source: ****
Personal care products is by far the largest category of users of cans, accounting for around three quarters. Household products also hold a significant portion, whilst the remaining categories' share is somewhat negligible.
Below is a further breakdown of the two largest segments (***) and the type of cans which have been used in each category respectively.
Personal care products
Distribution of can manufacturing Personal Care United Kingdom, ****, in % Source: ****
Households products
Distribution of can manufacturing Household Products United Kingdom, ****, in % Source: ****
3 Structure du marché
3.1 Market overview
Source: ****
Raw material suppliers: Steel is made from iron. It is produced either through the Blast Furnace, made from iron ore and coal (***) which is made from recovered steel. Aluminium is made through two processes: either through the Bayer process of refining the bauxite ore to obtain aluminum oxide, or the Hall-Heroult process of smelting the aluminum oxide to release pure aluminum Raw material processing+coating Coating is used to avoid corrosion of metals. Steel in particular is exposed to corrosion if the metal (***) is exposed to oxidation; to prevent this, materials such as paint, zinc, cadmium, aluminum, chrome, nickel, nickel-chromium, iron oxide, and silver is added to the steel. Aluminium is rust-resistant and thus involves no process of coating. Metal processing can involve many action points including recycling scrap metal, increasing the concentration of the desired metal, or even extracting the metal itself. This is for example the case for steel which is processed from iron (***). Generally, coating protects the surface of metal food cans, prevents food spoilage and enhances the performance of the packaging material. Coatings are also used at the industrial level on food vats and tanks, and they are also used on the non-food contact side of ...
3.2 Production
According to *stdirectory there are ** companies registered under the SIC code ***** - Manufacture of light metal packaging, where some company groups have several companies registered under this code. This applies to Ball and Crown for instance.
Moreover, the production price of light metal packages in the UK has increased since **** where the index value was ***. Thus far in ****, prices have increased by *.*%.
The increase in the price index is to a large extent a result of political forces, including Brexit and the Trade War which overall increases production costs. This helps explain the relatively large increase in **** and for the years following. Section *.* analyses these events in detail.
Producer price index (***) United Kingdom, ****-***** (***), in index value Source: ****
3.3 Manufacturing & distribution
According to canmakers there are three major companies which manufacture metal packages in the UK, presented below. Moreover, general can makers and their manufacturing plants are presented.
*no data on the UK in particular
Due to the limited data for metal packaging companies on revenue pertaining to the UK only, it is problematic to estimate market shares. However, it is plausible to point to the fact that the market is dominated by three large players (***), and that the market structure thus is concentrated.
3.4 The Metal Packaging Manufacturers Association (MPMA)
The Metal Packaging Manufacturers Association (***) is a UK association. According to the association's website, they "support and represent members’ interests on industry matters related to operational, regulatory and environmental issues."
Below is an overview of the association's revenue development.
MPMA industry revenue United Kingdom, ****-****, in '*** £ Source: ****
From this, we can see that the revenue has increased, albeit at moderate pace. The reason for this is not clarified, however it is plausible to assume that factors such as an increase in membership fees or a higher number of members contribute to the growth.
4 Analyse de l'offre
4.1 Product Overview
Below is an overview of the product supply based on descriptions from metalpackagingeurope:
Aerosols: full UV protection and preservation features, which help prevent the ingress of moisture & oxygen. Product stays airtight through a sealable lid, and it has high functionality and durability. Beverage Cans & Bottles: can be adopted for all drinks. Chill faster than other packages, and is lightweight and almost unbreakable. Closures & Crown Corks: ensures freshness, fits on almost all bottles (***), is recyclable, etc. Drums: used to store liquids and have great durability. Food Cans: enable the preservation of harvests, vitamins and nutrients are locked in until consumption, even if this is years from the canning date. Cans use no preservatives and still prolong the lifespan. Saves up to **% of energy throughout the supply chain. General Line: from **ml tinlets to ***ltr drums, these are generally impact-resistant, widely regarded as the best quality packaging method. General Line cans don’t puncture, burst or break, and withstand extreme temperatures and pressure. Speciality: other metal packaging for special products.
In the UK, the products manufactured and included in the SIC code *****: Manufacture of light metal packaging can be found here.
4.2 Cost and price analysis
Price index for exports United Kingdom, ****-*****, in index value Source: ****
In ****, the export price index was **.*, meaning export prices decreased by *% compared to the base year of ****. Since export prices have decreased we can assume, ceteris paribus, that foreign demand for British metal packages have decreased. This decrease in demand has caused prices to decrease. Events such as Brexit or global protectionism, and the uncertainty this bring, could be causing factors to this.
Another factor is the British Pound's continous depreciation since ****, amid external political and economic events. [***]
Distribution of expenditures The United Kingdom, ****, in % Source: ****
The chart above depicts the main sources of expenditure for the Metal Packaging Manufacturers Association in the UK. From this we can see that the number one cost was salaries (***).
It should be noted, however, that this does not represent the cost distribution for a metal packaging company, but rather for an association.
4.3 Recycling: the edge for the industry
According to MPMA, recycling rates in the UK are relatively high; **% of the steel is recycled, and **% of beverage cans (***). In Europe, the equivalent figures are **.*% and **.*% respectively, giving room to recycling of steel in the UK.
Indeed, the UK seems to treat its' aluminium better than steel. For example, packagingnews reports that a record **,*** tonnes of aluminium packaging were collected for recycling in Q* ****. In total for H* ****, **,*** tonnes were collected for recycling, which is an increase of some **% compared to the same period in **** (***).
UK consumers are aware of the recycling benefits of aluminum: a survey from Ball in October **** shows that half of adults (***) are aware that aluminium is infinitely recyclable. However, aluminium and cans still have a long way to go to beat plastic bottles, especially in terms of water: **% of the UK adults surveyed had at some point purchased water in a plastic bottle, whilst the figure was only *% for aluminium cans. [***]
Rick Hindley, executive director at Alupro, states that the UK has become more aware of recycling, and that COVID-** has actually benefitted the nation from this point of view: “The UK’s PRN data for Q* **** shows a hugely impressive year-on-year increase in the ...
4.4 External factors impacting the industry
Brexit
In January **** the UK invoked Article ** and formally began their withdrawal from the European Union. Economically, and for the metal packaging market, this decision will bear financial complications which could disrupt the industry in the UK. Overall, UNCTAD reports that the UK could lose some $** billion in trade only to the European Union.
Moreover, one expert claims that "The impact of decision to leave European Union will be seen in higher raw material prices, labor shortages, lower operating rates and increasing red tape and transportation cost". [***] In other words, all these costs would decrease revenue of the metal packaging industry as these costs would be transferred onto the end consumer which in turn look for cheaper alternatives. These cheaper alternatives come from foreign player who will squeeze local players through the ability to offer packaging at lower prices.
One associated risk is that due to higher production prices, large players such as Ball, Crown and Ardagh could look to move facilities from the UK to other parts of the world to maintain costs.
Trade war
In parallel to Donald Trump's inauguration, an international trade war commenced amid perceived injustices amongst the Americans in the global trade and tariff scene.
The ...
5 Règlementation
5.1 Current Regulation
Although the UK has officially left the European Union, the legislative frameworks which have applied until today fall under that category. Under this legal framework, we find Directive **/**/EC on Packaging and Packaging Waste as the core component. This directive was created in **** and has been in force since ****. Some of the points included in this scope and which are related to metal packaging in general are:
Recycling targets: By **** at least **% of aluminium and **% of ferrous metals must be recycled. By **** these figures should be **% and **% respectively. Form: weight, volume, and hazardous content in packaging must be minimized. On top of this, the packaging design must adhere to adequate recycling and energy recovery levels. Producer responsibility: manufacturers in the metal packaging industry must meet waste management criteria.
The Directive is subject to continuous amendments. Updates and changes can be followed here.
6 Positionnement des acteurs
6.1 Segmentation
- CROWN PACKAGING MANUFACTURING UK LIMITED
- BALL BEVERAGE PACKAGING AMEA LIMITED
- Ardagh Group
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the metal packaging market | UK
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