Oliver Graham, CEO Metal Beverage Europe and Group Commercial Director Ardagh Group took the time earlier in the year to reach out to Matthew Rogerson and provide insight into innovation, company direction and future thoughts with a comprehenesive look at one of the world's leading metal packaging players.
What beverage markets are Ardagh in? (by geography or type)
Ardagh Group has a truly global presence. We operate 109 glass and metal manufacturing facilities in 22 countries, employing approximately 23,500 people and have global sales of approximately €7.7 bn. It is estimated that in an average household globally, you will find at least six products in packaging produced by Ardagh Group. Our Glass and Metal divisions cover all beverage markets, including carbonated soft drinks, energy drinks, beer, wine, spirits, juices, and milk/flavoured milk. As lifestyles change, single-serve packaging is becoming increasingly popular, and Ardagh group packaging solutions are perfect for consumers who require convenient products on the go, whether that be in metal or glass.
What materials are used by the company (rough materials mix)?
Glass and metal, which are both permanent materials. They form part of what is referred to as a ‘circular economy’ – where materials can be infinitely recycled in a closed loop without any loss of quality. As a result, metal and glass are regarded as ‘permanently available’. The materials are not lost as long as they are recycled into another metal or glass product. Ardagh initiatives that focus on recycling – both of our source materials and within our facilities themselves – showcase our commitment to energy efficiency. Effective environmental management systems are in place at all Ardagh sites.
Ardagh’s goal is to become the leading supplier of inherently sustainable packaging. For instance, a number of our glass facilities operate furnaces that use 90% recycled glass, which is regarded as a benchmark for glass production worldwide. Both glass and metal are permanent materials and are therefore infinitely recyclable without any loss of quality.
Benefits of glass:
Glass packaging protects its content and enhances a brand’s appeal. As a permanent material glass is 100% and infinitely recyclable, making it the perfect packaging choice for today’s products and tomorrow’s. Ardagh produces distinctive and innovative glass packaging in all shapes and sizes for the world's biggest brands and offers a choice of almost 20 different colours.
Being infinitely recyclable, a glass bottle or jar can be made into a new one over and over again, with no loss in quality or purity. Making new glass bottles and jars from recycled glass reduces the amount of energy needed in the production process and lowers emissions into the atmosphere.
Benefits of metal:
Metal packaging is universally recognised for its protective qualities, versatility and environmental credentials. Metal is a permanent material, meaning it can be infinitely recycled without any loss to quality. Metal has the best recycling rates of all packaging materials in Europe, contributing to a circular economy.
Metal offers infinite design opportunities like no other material and is used across the world in many market sectors. Constantly evolving production technologies are used to ensure exciting possibilities in metal packaging for the future.
You can find further benefits here:
- Quickly chilled
- Hermetic seal
What are the most recent innovations launched – how long were they in development, what trends they address and how they have been welcomed by the market…?
Innovation is a top priority for Ardagh Group. We work with customers to create a variety of shapes, sizes, colours and textures for both stock designs and specific products in the growth categories within the beverage sector.
Our Nitro Can was developed in response to the nitro coffee revolution and was designed to cater to consumer needs such as indulgence, premiumisation and convenience. The coffee market is a dynamic market, experiencing steady growth, thanks to the interest in new twists on classic coffee beverages. Product producers have been experimenting with different flavour profiles for iced coffee and alcohol-infused coffee mixes. For premium drinks such as these, cans can play a vital role by opening the door to younger target groups who typically celebrate the format for its modern ease, and convenience. Of particular note in this category however, is the fanfare being made over cold-brewed nitro-coffee being driven by interest in the United States. Poured via a traditional beer stout, this nitrogen-infused beverage delivers a creamy texture and tops off in a glass with a foamy head. Cafés had been keen to adopt nitro coffee into their product mix, and here at Ardagh Group, we were equally passionate about offering our customers a solution that allowed them to stay in step with this exciting trend. Therefore, we developed the Nitro Can for Cold Brew Coffee. While we had previously, and quite successfully, used fixed widgets for the beer market in larger formats (i.e. 500 ml), to transfer the widget into the smaller 250 ml Nitro Can for black, cold-brewed coffee turned out to be a challenge. From our point of view, the most profound learning was understanding how to deal with the coffee’s microbiology within the can. Through careful treatment, we were able to create an “in-can” environment that upheld the full-bodied taste of the product as well as allowed for safe storage outside the cold chain for an extended period of time. Furthermore, we invested significant time in working through each step of the filling and overall processing of the can in order to effectively replicate the on-tap cold-brew experience and to ensure we had the capacity to support can fillers in implementing the technology. The market has welcomed the Nitro can from Ardagh as it delivers product performance and consumer indulgence and convenience without any compromises on product safety. We have now launched in the UK and expect rapid growth in many markets worldwide.
Our most recent innovations are a new two-stage thermochromic solution: ‘Reveal Impact’, which features combined temperature-sensitive inks with a twist. The new solution for aluminium cans uses two different thermochromic inks, which both boast the same colour when cooled down. However, once the can gets warmer again, one colour disappears quicker than the other, revealing a hidden message to the consumer. The revealed message surprises the consumer and supports highly targeted marketing activities. The ‘Matte & Mirror Impact’ innovation, available from 2018, allows matte and shiny contrasts on aluminium cans commercially for the first time.
In recent years, we have been exploring the application of best practise technologies and techniques from other industries, as part of our focus on innovation.
Sculptured Embossing is one such ‘crossover innovation’ from the chocolate industry which has recently been applied to glass container design within Ardagh Group, following a phased development process over the last ten years. Unlike regular, two-dimensional glass embossing, the new process allows glass sculpting to be achieved over multiple levels, creating intricate, lifelike detail, depth and dimension with incredible accuracy, never seen before in glass design. It has recently been used to replicate different texture effects in glass including wooden planking and citrus peel, as well as to enhance the definition of scripted text and other branding icons. The innovative technology is allowing Ardagh group to develop more artistry within glass, and is also delivering quality benefits at the design stage. The 3D models of mould components for manufacture are fully relieved with no undercuts and all sharp edges removed, so Ardagh Group can give mould suppliers the exact model of the embossed design, ready for machining. Via this method, crizzle logo defects are eliminated. It has also had a positive impact on increasing clarity of the embossing throughout the mould life of the tools, so less work is needed in between runs to maintain the moulds, which means there’s no risk of compromise in the clarity of embossing.
A second example of a ‘crossover innovation’ is our powder coating process, which is unique within the glass industry and took six years to develop. It is something that we proactively developed for the benefit of our customers and their brands, and no other glass supplier currently offers it. We took a technique which had been developed within our metal division and applied it to glass packaging. Instead of the traditional method for coating bottles using wet paint, this process involves coating the bottle using a powder. In this process, the bottles are earthed and the powder is electrostatically charged such that the powder naturally attracts itself to the bottles. The use of a powder instead of a paint allows for a much wider range of decorative effects to be explored, including tactile finishes such as terracotta and hammerite, in addition to sparkle and snowflake effects. In the case of the snowflake effect, the resulting pattern is random, which means that the pattern on every bottle is different and, therefore, every bottle is unique! As well as being beneficial from an aesthetic branding point of view, this new decoration technique is also beneficial from a sustainability perspective since the powders used in the process are 100% organic and the process produces no VOCs. We believe that the application of this powder coating decoration technique provides an opportunity to add value and shelf stand out to our customers’ brands.
What are some of the key challenges faced as a beverage company trying to develop innovative packaging (can be for both sections)?
The challenges are similar to any other company seeking to commercialise something different, and these challenges can sometimes be heightened in such a high-volume business-to-business industry as ours. But when we work closely with a customer to understand what they are seeking to do with their brand and their business, we can innovate and create a package and process together, from conversion to filling, to distribution to retail display, that delivers on their objectives. It’s not about just launching a new product. It’s about a truly thought-out package and business solution that addresses a consumer need, and builds customer business. We also believe it is key to be proactive in developing new ideas and concepts in packaging to add value to our customers’ brands. This is the focus for our innovation teams, which work across all functions, regions and materials to explore synergies internally and new technologies externally.
What are the leading trends you are seeing in packaging for beverages in 2017?
Health and convenience, indulgence, and continued premiumisation, which also includes craft and consumer interaction. In some regions, we see the health trend influencing packaging formats and sizes.
In the beverage can business, soft drinks brands are favouring specialty can formats (sleek and slim), which have a higher consumer appeal and often with a smaller portion size. There is also a requirement for reflective inks, different finishes and a range of textures, which can feature on brand labels, as well as on coloured ends and laser-etched tabs. These options are being used primarily by newer, growing brands in growth categories such as energy drinks, craft beers and spirits and teas.
In glass, we are seeing a focus on differentiation, though the use of high definition embossing and the use of limited edition decoration techniques, as well as a desire to convey authenticity – creating experiences with our customers for their customers. In terms of sustainability, there is an increasing focus on recycling rates, percentage of recycled content and reduced weighting of primary packaging. These are all trends Ardagh Group remains at the forefront of.
What does the future hold, is there a particular growing geographic area, material for packaging or beverage sector that holds the most interest for you?
Single-serve coffee, wine and water (often flavoured) are offering long-needed alternatives to consumers. Consumers in Western Europe in particular are choosing metal cans more and more, and in smaller sizes to meet their convenience and portioning needs. In addition, we see increasing beverage “fusion” – the blurring of classical beverage categories, may it be low alcoholic beer with new flavours or soft drinks claiming new functional and health benefits. We are also seeing continued growth in craft beer as we add numerous new customers globally every year, and continue to see strong growth in energy drinks and teas in a number of different sizes. Premiumisation and luxury are a focus for the beverage sector across all categories from soft drinks through to spirits and, in addition, craft beverages continue to be a major driver of the beer and cider sectors. The food sector is seeing a combination of drivers, mainly centred around authenticity and premiumisation, with some striking examples launched recently by our customers in Europe such as the Duerr’s citrus jar and the Gluck premium preserve jar. The craft beverage industry continues to be an area of growth and focus for Ardagh Group. Through our online platform (www.buyourbottles.com) our recent launch of Ardagh Direct, and our ongoing focus on flexibility, we are able to continue to expand and improve our service to these markets, providing standard solutions quickly, as well as options for limited edition products.
How do you balance addressing the needs of the consumer and customer against providing the best fit for purpose packaging (who takes priority when working on packaging, is it the consumer, the customer or your own manufacturing and supply chain that needs to inform packaging development?)
It is the customer and brands that we focus on and support. We supply the brands which supply the consumers. There really is no “either/or” in this process as it is the brands that need to address consumer concern and demand in order to sustain and build their business. We support the brands in delivering the right packaging to help deliver this consumer satisfaction. Of course, we keep our finger on the pulse of consumer trends so that we bring to the table options for our customers that provides the choices they need in making sound strategic decisions. But our focus is clearly on direct engagement and collaboration with our customers, helping them achieve their objectives and improving their speed-to-market.
How important is end of life to you and how can the end users be better informed of your activities in the field?
End of life, or post-consumer use of our packaging, is incredibly important.
As a beverage can industry we invest in numerous municipal recycling programs, which have included our own recycle drives at many of our manufacturing plants. Overall, the industry has been able to demonstrate a number of environmental accomplishments such as a reduction in our carbon footprint by more than 45% in the last 20 years. Per capita reductions in material usage, water and natural gas are built into our objectives every year. Globally, our recycle rate for beverage cans is about 70%, with a recycled can returning to retail shelves in its original form in about 60 days. There are a number of websites to track our industry’s progress. In the US, our main source of industry news on accomplishments is here: www.cancentral.com.
In glass, one major priority is to make sure that the important recyclability properties of glass packaging are duly acknowledged in the future Circular Economy legislative package currently under review. The EU glass industry is already achieving a recycling rate of 74% and is committed to increasing this further. The end user is critical in this process, consumers need to be motivated and empowered to recycle their empty packaging at the end of its useful life to ensure that it remains in use for use by society over and over again. Recycling and the use of post-consumer glass in our manufacturing process is extremely important. In North America, Ardagh Group is a member of the Glass Recycling Coalition (GRC), which was formed in 2016 and brings together a diverse membership of companies and organizations throughout the supply chain (glass manufacturers, waste haulers, processors, capital markets, end markets and brands) to make glass recycling work. The GRC promotes best practices in glass recycling and provides solutions-oriented resources for local and state governments to build a strong foundation for the success of glass recycling in the future. Information about the organization, as well as its resources and tools for communities can be found at: www.glassrecyclings.org. Additionally, Ardagh Group understands the importance of educating today’s youth about the benefits of glass and recycling. Therefore, the company is pleased to offer a free-online education program (www.CaptainCullet.com) for elementary schools, teachers, parents and students that includes age-appropriate animated videos and activities that will help to pave a path of awareness for future generations of consumers.
What do you think the future holds for metal packaging or glass packaging- what innovation or improvement do you think will be seen next in the market?
For both metal and glass, it will remain all about attracting attention on retail shelves in a package the brand will be proud to offer, a package that ultimately addresses the consumer’s need for image, taste, quality and sustainability. For metal packaging, we’ll see more options being provided to customers, more shapes, sizes and functionality, including resealability. There will be increased use of eye-catching graphics across the entire surface of the can, including the end and the tab. And these options will be available to customers faster to meet the need of speed-to-market. We will continue to drive innovation across all functions of the business to add value and provide brand differentiation for our customers. Ardagh Group continues to build a network of external innovators, while collaborating globally across our business. We are focused on enhancing the performance of our packaging, and engaging with our customers to better understanding their challenges and deliver solutions.