Interview Synopsis

Anchor Glass – glass packaging demand and supply chain challenges

  • Credit
  • Materials
  • North America

The global aluminium shortage is unlikely to result in the return of glass bottle packaging in the beer industry, according to a former senior executive at Anchor Glass.

Global aluminium shortage unlikely to impact beer packaging trends

In an Interview with Third Bridge Forum, the specialist said the transition of beer packaging from glass to cans has already occurred, but ready-to-drink beverages continue to shift from bottles to cans “at a higher rate”. They told us packaging capacity continues to be “tight”, however the overall market dynamics continue to be strong for all substrates, which is good for “the entire packaging space”. 

The specialist said Anchor Glass continues to enjoy goodwill from customers who want it to compete with the only other two players in the market. But having suffered from a high turnover of executives and workers at some plants in recent years, the specialist said improving employee retention should be a priority. In the specialist’s opinion, Anchor Glass is disadvantaged by its inability to cover the whole of the US. We were told that while it has a “good position” in the southeast, it is “not strong” in the west.

The glass packaging industry is likely to be at lower risk of importation over the next 18-24 months, according to the specialist. They said in light of the COVID-19 pandemic, companies prefer to source glass packaging domestically, even if that means paying a small premium. However, we were told there are some types of glass packaging, such as those for olive oil and premium spirits, that US glassmakers cannot manufacture domestically.  

The Interview also looked at the cost structure to produce glass, with the specialist breaking down the costs by labour, raw materials, energy and deprecation. The rising cost of materials, logistics and labour is unlikely to compel Anchor Glass customers to buy their products early, the specialist said, and any cost increases are expected to be passed on to the customer – something they said Anchor Glass has been “incredibly consistent” with.

In the specialist’s opinion, this is “one of the beautiful things” about the glass industry, but could become the industry’s “Achilles heel” if it leads to glass manufacturers not managing their costs. 

To access all the human insights in Third Bridge Forum’s Anchor Glass – Glass Packaging Demand Trends & Supply Chain Challenges Interview, click here to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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