Specialist
Former VP level executive at Owens-Illinois Inc
Agenda
- Glass packaging manufacturing trends
- Supply, demand and substrate substitution
- Cost pressures and pricing dynamics
- Competitive positioning of key players
- Outlook through 2020
Questions
1.
What are your high level thoughts on the state of the glass packaging industry in North America? What key trends and themes should investors pay attention to when evaluating the space and its future?
2.
What are your thoughts on future demand across all the different product categories, how much growth or decline would you expect?
3.
What kind of growth rates are you seeing for wine?
4.
The numbers I’m aware of within craft beer glass packaging are mid-80% in 2014 and high 50-60% in 2018. Where do you expect that to level off, how much further down does it go?
5.
What’s the revenue impact from the switch to wine and spirits from beer? What’s the declining glass packaging percentage done for the manufacturers?
6.
What about the supply rationalisation that’s happening in the industry? How much have you seen taken out in terms of capacity and what are your expectations for how that develops?
7.
What’s your expectation for manufacturing capacity being removed from the North American market over the next couple of years?
8.
If you’re matching up the current demand environment to the capacity rationalisations that we’ve seen, how do you feel about that supply-demand balance going forwards? Is the industry taking out enough capacity based on the declines in the overall glass packaging volume output?
9.
Could you expand on the retooling of various plants based on differences in demand by type etc? Do the manufacturers have to constantly restructure based on movements of customers etc? Is this going to be a dynamic that persists going forwards?
10.
Are there companies in the glass space who you see as better at viewing the market on the longer time scale?
11.
You mentioned a potential tailwind for beer if there was some kind of downturn in the broader economy. What might that look like from a glass manufacturer’s perspective, how does that change the equation?
12.
Given the decrease in penetration of glass within the beer market, how do we think about the net impact of the shift from wine and spirits, where glass obviously has a high market share, to beer, are other substrates taking preference?
13.
Do you see any specific breweries being at risk of having to shut down?
14.
As we see people move away from all of the categories, wine, beer, spirits and start something entirely different, what are the impacts for the glass manufacturers?
15.
Do you think there is a place for glass packaging in the cannabis market?
16.
What rough percentage of the glass packaging market do you think cannabis could take?
17.
To what extent will the cannabis market impact the total glass demand for alcoholic beverages?
18.
We’re seeing some pressure on single-use plastics. To what extent could substitution from plastics to glass be a tailwind for glass packaging?
19.
What have you seen in terms of glass packaging pricing trends over recent months? How do you expect that to evolve?
20.
What does a typical contract look like in the glass space? Are there any kind of pricing escalators, de- escalators that pass through raw material costs, energy costs, etc?
21.
Do you see a likely increase in customers switching suppliers because of pricing fatigue?
22.
Owens-Illinois recently announced a new magma furnace and they’re saying it’s quite a game changer in the industry. Do you have any opinions on how much of a game changer it might actually be?
23.
Regarding the shift from beer to spirits and wine, there are many headlines that millennials prefer spirits and wine over beer. What impact does that have on the volumes of glass? It seems that a bottle of wine could replace three bottles of beer, so my instinct says that’s a negative for volumes, but what’s your insight on that?
24.
Have you looked at the fire situation at Anchor Glass from last year, any thoughts on that facility coming back, or do you think that’s going to be down forever? Any thoughts on what its plans are?
25.
Could you somehow quantify how much capacity has been taken out of the market, whether that’s in actual volume numbers or if it was 100% two years ago it’s 80% of that now? However you can quantify it.
26.
What’s your outlook for the industry as a whole over the next year or two, what do you see as a best- and worst-case scenario?