Summary of our market study
The global metal packaging market has shown signs of expansion, driven by the attractiveness of metals such as steel and aluminum for their durability, efficiency in space, preservation capabilities, and high recyclability. By 2022, the industry is projected to reach a market size of $153 billion, growing at a CAGR of 3.3%. Despite its promise, metal packaging comprises a relatively small portion of the overall packaging market. The US has been the largest market, holding about 13% share, and despite facing price hikes due to tariffs on steel and aluminum imposed by President Trump, the market has since stabilized.
M&A activity in the US dipped in 2020 due to COVID-19 yet saw the highest deal flows globally, with 75 deals amounting to around $2.13 billion. However, there seems to be a discrepancy in public knowledge about metal recycling compared to other materials like cardboard. Major global metal packaging manufacturers like Crown Holdings and Ball are significant players with revenues of $11.67 billion and $11.64 billion, respectively, helping to consolidate the industry. Despite recent volatility, M&A activity in metal packaging was off to a strong start at the beginning of 2020. The trade war's impact on US pricing has eased, but mixed effects were observed on domestic producers. With the ongoing increase in metal packaging consumption, the market suggested upside potential for metal as an environmentally favorable alternative to other packaging materials.
Emergent Trends in the U.S. Metal Packaging Market
The metal packaging market in the United States encompasses a range of players such as mineral and petrochemical producers, suppliers, and end users across various industries. Despite its small share in the overall packaging market, amounting to around 12%, this sector has demonstrated potential for significant expansion, especially driven by its durability, space efficiency, and high recyclability. As of recent valuations, companies like Ball and Crown dominate market presence both domestically and internationally, suggesting robust industry prospects. The trade war initiated by President Trump originally caused an uptick in steel and aluminum prices but effects seemed transient, with current price levels resuming to their norm. This has been corroborated by reported company layoffs due to initial raw material cost hikes but was later offset by market entries of international firms exempt from tariffs. Notably, the U.S. still witnesses the highest flow of M&A deals in this sector globally, with 75 deals rounding up to about US$2.13 billion. With respect to metal packaging growth, the market is forecasted to bloom, with expected growth at a CAGR of 3.3%, aiming to hit the US$153 billion mark by 2022.
Driving factors include the preservation capabilities of metal packaging, its sustainable profile evidenced by high recycling rates, and rising demand in healthcare products. Asia, specifically India, is pinpointed as a major growth contributor, aiming to amplify its use of aluminum cans substantially, from roughly 5% to around 25% by 2030. Moreover, in Europe, where 98 billion units are produced annually, per capita consumption sits at about four units per week, with Germany being a leading importer of metal packaging in the first half of 2020. The recyclability of metals like aluminum and steel remains a strong suit for the industry. In the U.S., with nearly 50% of aluminum cans being recycled and around 80% of all produced steel still in use, recycling trends, however, have seen a slight decline.
Paradoxically, a survey revealed a knowledge gap, with only 8% of adults aware of metals being among the most recyclable packaging materials. Market segmentation paints a picture of a few dominating entities. Specifically, Crown Holdings and Ball's robust market presence in metal can manufacturing indicates a concentrated market structure, with their combined market shares reaching over 30%. The other metal container manufacturing sector, while less concentrated, still shows a reliance.
Key Market Players Dominating the Metal Packaging Landscape
The metal packaging industry might represent a more modest share in the overall packaging market, but its significance is reinforced by the presence of some heavyweight players who have established themselves as global leaders in this sector. Notable among these are companies like Ball Corporation, Crown Holdings Inc., Ardagh Group, Mauser USA LLC, and Industrial Container Services (ICS). These key players have a broad geographic footprint and cater to an extensive range of end-use industries, including food and beverages, healthcare, and consumer goods.
- Ball Corporation is one of the titans in the metal packaging industry, known for its extensive range of beverage cans, which swiftly cool their contents and boast unparalleled durability and lightweight properties. The company operates globally, serving customers not just in North America but also in broad international markets.
- Crown Holdings Inc. is another prominent name in the metal packaging sector. Crown's speciality lies in an array of products from food cans that effectively preserve nutritional value and taste to aerosol containers that protect the integrity of hygiene and health products. Their steel and aluminum packaging solutions are widely sought after for their preservation capabilities and sustainability.
- Ardagh Group has made a mark in the industry with its diversified packaging solutions. The group is well-regarded for its flexible and creative packaging services that meet the dynamic needs of the modern consumer - ranging from robust glass packaging to versatile metal cans and bottles.
- Mauser USA LLC has carved out a significant niche in the manufacture of industrial containers, focusing on a variety of metal containers vital for industrial uses. Mauser's contribution to the industry is particularly noted for their sturdy drums used to store and transport liquids safely.
- Industrial Container Services (ICS) stands as a strong competitor in the market specializing in producing and refurbishing industrial containers. Their commitment to quality and service has made them an important player in the supply chains of various industries. These market leaders not only play pivotal roles in driving innovation and ensuring product safety and longevity but also contribute significantly to the environmental aspect of packaging through constant efforts in promoting the recyclability of metal materials. Their operation scales, technological advancements, and strategic market positioning allow them to command significant influence and set industry trends within the metal packaging sector.
As the industry sees growth driven by sustainability trends and the benefits that metal packaging offers, these players continue to adapt, expand, and refine their strategies to maintain their stronghold within the market. With their impressive track records and proven resilience, they represent the foundational pillars of the metal packaging industry.
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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.
North America is the world's largest metal packaging market. In particular, the United States, which makes up the largest share of North America's turnover, holds a significant share (around 13% in 2018). The nation came under pressure when President Donal Trump in 2018 imposed tariffs on steel and aluminium, which increased the price worldwide, and impacted local players. However, the price increase seemed to have been temporary and price levels are back to normal.
The domestic market is one with great prospect provided by high company valuations of firms such as Ball and Crown. The two players are market leaders on the global stage, and supply nations and consumers worldwide. Moreover, M&S industry in the packaging industry has declined in 2020 amid COVID-19, but the US still boasts the highest deal flows in the world. In 2019 there were 75 deals (worth around US$2.13 billion).
1.2 The global market is in full bloom
The metal packaging industry is in full bloom; between **** and ****, the market is expected to grow at a CAGR of *.*% to reach US$ *** 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 Market analysis: the United States
North America, where the US makes up the most significant share, was the world's largest metal packaging market in ****. [***]
To estimate a market size, the turnover of two NAICS codes can be aggregated, namely Metal Can Manufacturing (***). From this, we add $US**,***,***,*** and $US*,***,***,*** which amounts to $US**,***,***,***. In ****, this represented around **.*% of the total global market.
Source: ****
1.4 International Trade
This section analyses the trade of metal packaging products and related activities for the United States with global partners. In particular, three NAICS codes related to metal packaging are included in the scope, and are listed below: ****** - Metal Can Manufacturing ****** - Other Metal Container Manufacturing ****** - Packaging Machinery Manufacturing The two first codes pertain more to the metal packaging industry, and will thus be analysed more thouroughly throughout this study.
Trade balances (***) United States, ****, in $US million Source: ****
From the graph above, we can see that the packaging machinery manufacturing market is where trade values are the largest; in ****, imports amounted to $ *.** billion and $ *.** billion for exports. This results in a coverage rate (***) packaging.
Regarding metal can manufacturing, the coverage rate was *.** and for other metal container manufacturing it was *.**. In other words, these two categories are relatively less dependant on imports than packaging machinery manufacturing, however imports still prevail.
The following charts analyse the US main trade partners for Metal Can Manufacturing and Other Metal Container Manufacturing; as previously stated, focus is on these two categories as the third category is broader than metal packages only.
Origin of imports (***) United States, ****, in % Source: ****
In ****, more than half of metal ...
2 Analyse de la demande
2.1 Metal packaging's overall share is relatively low
In ****, the US packaging market was dominated by corrugated packages (***).
Metal packaging made up a mere **% of all packaging, meaning there is huge upside potential to reap market share from alternative packaging materials. For instance, metals' intrinsic environmetal features should be marketed and presented as a better alternative.
US packaging market, by type United States, ****, in % Source: ****
2.2 Investors' faith in metal packaging companies is strong
Packaging sector index breakdown United States, Q* ****, by number of companies in the index Source: ****
Out of ** companies in the index, metal and glass companies only make up three, where two are related to metal (***).
However, of all ** companies in the index, Ball has the second highest EV/EBITDA (***) has a higher valuation. As of Q* **** Ball had the highest Enterprise Value in the index. Crown had the fifth highest value. Thus, although the number of firms are low, valuations of the two American metal packaging companies are high.
3 Structure du marché
3.1 The supply chain of metal packaging
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 analysis
In the US, **.*% of the companies under NAICS *** (***) are private establishments. [***]
Between **** and **** the producer price index has increased continously. In this period, prices increased by some **% as can be seen below. It is important to note that this applies not only for metal packaging but metal manufacturing overall. Meanwhile, steel and aluminium. which are the foundation to metal packaging, are key to the development in price movements.
Producer price index United States, ****-***** (***), in average yearly index value Source: ****
The number of employees in the metal product manufacturing industry increased by **.*% between **** and ****. ****'s number is an average of the year which has passed thus far (***). The rise in number of employees has occured parallel to a general industry expansion.
Number of employees in the the Fabricated Metal Product Manufacturing (***) United States, ****-*****, in '*** employees Source: ****
Of the most common employment forms within this industry, the following distribution exists:
Most common types of employments (***) United States, ****, in % Source: ****
3.3 Distribution
This section analyses three NAICS codes related to metal packaging, listed below:
****** - Metal Can Manufacturing [***] ****** - Other Metal Container Manufacturing [***] ****** - Packaging Machinery Manufacturing [***]
Metal Can Manufacturing
In this sector there are *** companies and **,*** employees (***). Latest market size amounts to $**.** billion.
According to NAICS the top companies in this sector are the following:
*North AND central America. True market size is thus smaller for North America only.
Revenue which pertains to metal cans/containers:
Crown: **% food & metal cans and closures: *.****.**=$*.** B. This results in an approximate market size in the US of **.*% (***)
Silgan: **.*% metal containers: *.*****.**=$*.** B This results in an approximate market size in the US of **.*% (***)
From this estimation, we can see that Crown and Silgan holds approximately **.*% of the market; adding to Ball to that equation results in a market structure which is concentrated.
Other metal container manufacturing
In this sector there are *** companies and **,*** employees (***). Latest market size amounts to $*.** billion.
According to NAICS the top companies are included below:
Packaging Machinery Manufacturing
In this sector there are *** companies and **,*** employees (***). Latest market size amounts to $*.** billion.
According to NAICS the top companies are: Bprex Healthcare Packaging, Pro Mach, Krones, Douglas Machine, Ra Jones & Co, ...
3.4 M&A activity
M&A volume US metal packaging industry United States, Q* ****-Q* ****, in number of deals and deal value (***) Source: ****
M&A activity in the metal packaging industry in the United States is relatively volatile on a quarter-on-quarter basis, and **** has thus proven to be a strong start to the year, with the number of deals being higher than for any quarter in ****.
In value terms, Q* **** amassed the greatest value, with $*.** billion. The top three deals included the merger of Charter NEX Films and Next Generation Films, Sonoco Products acquisition of Corenso Holdings America and Valmet’s acquisition of J&L Fiber Services.
From a global perspective Q* **** was particulrily strong; during this period of time, the US accounted for **.*% of deals in the packaging industry (***). [***]
M&A volume US metals industry United States, Q* ****-Q* ****, in number of deals and deal value (***) Source: ****
Finally, according to PwC, the deal value of the overall metal industry has been in steady decline, with only four deals in Q* ****, and six deals in total for H*.
All deals have occured in Asia, and China in particular, which accounts for over **% on the steel production worldwide. [***]
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.
4.2 Price Analysis
Import and export prices (***) United States & World, ****-**** (***), average yearly index value Source: ****
The graph above shows the export and import prices of Fabricated Metal Product Manufacturing (***).
Between **** and **** both exports and imports have increased, with export prices increasing more relatively to imports. This spike in ****-**** can be devoted to the US-China trade war where tariffs were raised (***). Ever since, the domestic price levels have not recovered, although globally prices have normalized.
Since ****, export prices have increased by **.**% and imports by **.**%. This is a result of synthetic (***) forces.
4.3 Impact of the Trade War on the US
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 European Union was affected by this strategy as well, where steel in particular was idenitified as an economic pain point, and thus targeted. In March ** ****, the US introduced tariff measures on steel (***) against international steel importers. These measures include decided by the Trump administration aimed to relocate some of the industrial activities concerned to the United States and fight against the country's growing external deficits.
As a result of this implementation, the spot HRC (***) price in the United States in Q* **** increased sharply, as can be seen below. After a release of Trump's report that recommended tariffs in the range of ** to **% prices spiked to $***/t at the beginning of March ****. The increase slowed as tariffs of some **% were implemented during March ****, closing the month at a high of $***/t. In July **** HRC prices hit a ** year high of $*,***/t, amid market uncertainty.
Nevertheless, after this, H* **** demonstrated a decline in international prices due to market seasonality. Parallel to this, the capacity utilization rate in the United States increased, implying an increase in supply, which put ...
4.4 Recycling
In the US ***,*** aluminum cans are recycled each minute — leading to an overall recycling rate of nearly ** percent, the highest recycling rate for any beverage container. Additionally, due to the infinite recyclability of aluminum, ** percent of all aluminum produced is still in circulation. [***]
Steel is also highly recyclable, with around **% of all steel ever produced still being in circulation. [***]
In this section we look at recycling for the two metals in the United States.
Recycling of steel containers and packaging, and aluminium containers and packaging United States, ****-****, in '*** tons Source: ****
From the graph above we can see that aggregate recycling levels have increased in the US, however since **** the trend is that of decline. In ****, *.** million tons of steel and ***,*** tonnes of aluminium was recycled.
Meanwhile, USGS reports that between **** and **** consumption of aluminium (***) in the US increased by *.**%, which confirms that, relatively, recycling has decreased as consumtion has continued to increased. The same report states that steel consumption between **** and **** increased by *%.
Knowledge of the most recyclable food packaging materials according to adults in the US United States, July ****, in % Source: ****
As the chart above shows, in a survey from **** it was revealed that only *% of respondents in ...
5 Règlementation
5.1 Current Regulation
In the US, the FDA are responsible for issuing and communicating regulatory requirements within the framework of packaging. Several codes, norms, and laws can be included in this scope, amongst them:
Packaging and Labelling: the main points of consideration here are material examination and usage criteria, expiration dating, packaging and labelling operations etc. This applies for companies which produce packages in-house and also retail the end-product. In **** the most common issue was defective containers, accounting for **% of recall events. Regulation of waste disposal: this scope involves the understanding of how metals are produced and later re-used
Moreover, the impact on food of materials (***) used in packaging is also covered by the US laws prohibit the intentional and incidental additional presence of metals such as lead, mercury, cadmium, and the hexavalent chromium commonly found in many dyes, inks, pigments, stabilizers and adhesives typically used in packaging. [***]
6 Positionnement des acteurs
6.1 Segmentation
- CROWN PACKAGING MANUFACTURING UK LIMITED
- BALL BEVERAGE PACKAGING AMEA LIMITED
- Ardagh Group
- Mauser USA
- Industrial Container
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