State of the Glass Container Industry Steve Rhea November 5, 2013 Glass is ENDLESSLY Recyclable
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2013 Headlines Another Year of Change The Ardagh Group announces the intent to purchase Saint-Gobain Containers. Economy continues to struggle U.S. and world-wide Unfilled glass container imports continue to increase Regulatory issues continue U.S. Glass Container Industry continues to improve safety, service, quality, the manufacturing process, flexibility and innovation.
Agenda How Do We Manage in Today s Environment? The U.S. Economy U.S. Packaging Market U.S. Glass Container Marketplace The Role of GPI 4
5 U.S. Economy
Dow Jones Industrial Index 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 6
Thousands of Starts U.S. Housing Starts 250 200 150 100 50 0 7
Thousands of Vehicles U.S. Vehicle Sales - Cars and Light Trucks 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 8
Index 1985=100 Conference Board Consumer Confidence Index 160 140 120 100 80 60 40 20 0 9
Index 1966=100 Reuters/University of Michigan Consumer Sentiment Index 120 100 80 60 40 20 0 10
U.S. Employment Totals and Unemployment Rate 000 Employees Percent Unemployed 160,000 16.0 140,000 14.0 120,000 12.0 100,000 10.0 80,000 8.0 60,000 6.0 40,000 4.0 20,000 2.0 0 0.0 Employed Individuals Unemployment Rate 11 Note: Employment and Rate for those 16 years and older
2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 Gross Domestic Product (GDP) (Value of Goods and Services Produced in an Economy) Percent Change 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0-1.0-2.0-3.0-4.0 2012-1.7% 2013-2.5%? 12 Source: U.S. Census Bureau
Agenda How Do We Manage in Today s Environment? The U.S. Economy U.S. Packaging Market U.S. Glass Container Marketplace The Role of GPI 13
U.S. Packaging Container Industry 2013 Overview - Domestic and Imported Food and Beverage Packaging Paper/BIB /Flexible 11% Paper/BIB /Flexible 35% Glass 10% Plastic 18% Metal 13% Glass 58% Plastic 25% Metal 30% Volumes by Weight 21.5 mil Mtons Volumes by Units 450 billion units Source: DOC, MINIMAX U.S. Based Manufacturers, EUROMONITOR 14
Agenda How Do We Manage in Today s Environment? The U.S. Economy U.S. Packaging Market U.S. Glass Container Marketplace The Role of GPI 15
U.S. Glass Container Industry 2013 Overview Gross Tons Source: Dept of Commerce, MINIMAX assumes 93% reporting 16
(000 Gross) U.S. Glass Container Industry Historical Volume 1984 2013E 400,000 350,000 300,000 Conversion of carbonated soft drinks to plastic World-wide economic downturn 250,000 200,000 Volume slightly decreasing in 2013 150,000 100,000 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: Dept of Commerce, MINIMAX assumes 93% reporting 17
U.S. Glass Container Industry Sales Volume Overview September 2013 Category Trend % Change (2013 v 2012) Year to Date % Change (2012 v 2011) % Change (2011 v 2010) % Change (2010 v 2009) % Change (2009 v 2008) Food -0.8% -3.7% -1.7% -1.0% -2.2% Beverage -5.5% 1.6% -2.2% -6.2% -10.0% Beer -3.5% 2.1% -1.8% -8.0% -2.3% Liquor -0.4%.9% -0.5% -0.6% -0.3% RTD Liquor -2.1% -9.3% -0.7% -10.2% -3.6% Wine -2.2% 1.0% 7.1% 7.0% -2.1% Other 23.2% 12.1% -15.1% 0.1% 7.6% Total -2.7%.5% -1.2% -5.4% -2.8% Source: Dept of Commerce, MINIMAX assumes 93% reporting 18
U.S. Glass Container Industry 2013 Overview Imported (Filled), 2,800,000 Imported (Unfilled), 750,000 U.S. Manufacture 7,500,000 Overall Marketplace of 300 million gross or 11.1 million metric tons Source: DOC, MINIMAX U.S. Based Manufacturers, EUROMONITOR 19
Imported (Filled) Glass Containers into the U.S. Food, Bev, Other 20% Spirits 13% Wine 16% Source: Beer Inst, Euromonitor Other Imported Beer 9% 2,800,000 Metric Tons Mexican Beer 28% Dutch Beer 10% Canadian Beer 4% 20
Agenda How Do We Manage in Today s Environment? The U.S. Economy U.S. Packaging Market U.S. Glass Container Marketplace The Role of GPI 21
22 The Role of the Glass Packaging Institute
Favorable Legislative and Regulatory Environment Clear Voice on Federal and State Legislation Workforce as Local Advocates National and State Glass Recycling Partnerships Recycled Content Rate Issues Messaging (Health, Purity, Environment) GPI Website Future Glass Industry Champions Government Affairs and Recycling Marketing and Communications GPI s Strategic Plan 23
We Can Design and Produce Great Products! And Recognize Our Customers! 24
Glass Packaging Institute 2011 Clear Choice Awards 25
Glass Packaging Institute 2012 Clear Choice Awards 26
Glass Packaging Institute 2013 Clear Choice Awards
Conclusion We are competing in a global marketplace with threats from alternative packaging, imported filled glass products and glass imported from Asia. We have a great story to sell : Style Purity and Safety Inert Material Recyclability Innovation Service and Flexibility There are many pending governmental and regulatory issues to resolve and we have the best people working on these. We all have and must continue to find opportunities to remain competitive. Our customers view glass as a great packaging material, but too expensive. 28
29 We Can Buy Our Products in Glass!!
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31 Questions
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