Image: In 2015, Ball Corp started making Coca-Cola’s contour-shaped aluminum bottle in the US; source: Ball Corp.
Structure of the Containers & Packaging Industry
Firms in the containers and packaging industry are highly competitive and operate capital intensive businesses characterized by facilities that run continuously to remain profitable. Firms are exposed to the costs of aluminum, steel and other materials, though many can pass through price changes thanks to contractual provisions. Still, cost containment is critical, as increases in productivity, combined with capacity changes, can create significant pricing pressures. Metal, plastic, glass and flexible materials are essentially substitutes, and differentiation can be difficult to achieve. We’re generally neutral on the group.
We’ve dropped coverage of stocks in the Containers & Packaging industry.