Global packaging giant Ball Corp has blamed a “deceleration in customer demand” for its decision to halt production at two beverage can facilities in the US.
The company, which reported its second-quarter results earlier this month, will shutter its sites in Phoenix, Arizona and in St Paul, Minnesota. At the same time, plans to build a new can manufacturing site in Las Vegas have been put on hold.
Ball said the closures will help to “address localised supply/demand imbalances” in the country.
On the subsequent conference call with analysts, CEO Daniel Fisher noted that pricing moves by canned beverage brand owners in the US have impacted demand for cans. “In this environment … cans continue to win in the fastest-growing beverage categories, and underlying demand for aluminium packaging continues to be resilient despite retail shelf price increases by our customers ranging as high as 20%,” Fisher said. “Early indications are that North American customers will continue to emphasise price over volume during the second half of 2022.”
When asked which beverage categories were displaying a marked deceleration in the context of cans, Fisher added: “Total alcohol was down 3%, mostly driven by domestic beer. I’m sure that’s not a surprise to you given our customers’ penchant for taking price versus volume.
“Import beer was up double digits (+13%); craft, down low single digits; hard seltzer, down nearly 20% … and RTD cocktails was up 60%, obviously, off of a lower base. So, net-net, basically flat for can penetration, and it’s very consistent with our customers’ earnings releases as well.”
According to Fisher, the two facilities have an annual production capacity of around 4bn units. Ball operates 19 aluminium beverage can plants in the US including Phoenix and St. Paul,
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