Ball: Two-billion beverage cans in India

WhatPackaging? (WP?): Why Aluminium packaging? What are its sustainable benefits?
Amit Lahoti (AL): Aluminium cans are one of the most sustainable packaging materials available today. This is because Aluminium cans are infinitely recyclable and promote a circular economy. Apart from being sustainable, cans are also very practical from transportation to application, as well as end-users.

For example, the quantity of beverage cans that are transported by road is much higher than other packaging formats. Again, loss due to breakage or spillage is close to zero in terms of Aluminium cans compared to other packaging formats. Cans are also more stackable and convenient for retailers who place a premium on shelf space.

WP?: Do the consumers think so?
AL: From a consumer standpoint, cans look cooler and are lighter in weight. They are also tamper-proof and are better at protecting the beverage from external elements like sunlight. They are also easier to chill and stay cool for a longer period of time.

WP?: And brands?
AL: From a brand perspective, cans offer 360-degree branding solutions. An Aluminium can offers beverage brands unique printing capabilities and we've facilitated a lot of innovation around that, which has helped marketing or brand managers portray their brands to consumers in unique ways as compared to other packaging formats.

WP?: How so?
AL: Metal, the Aluminium is infinitely recyclable without any loss of quality. So, 75% of Aluminium ever produced is still in circulation; and a 70% of beverage cans that have ever been produced, the Aluminium used for producing it, is still being used and those are great numbers.

WP?: What is the reason?
AL: The reason for recyclability and why such a high percentage of element beverage cans are recycled is because of the value in the metal. There’s value in it even for the waste collectors. So, in India, we believe that the recycling of beverage cans is as high as 91%. That’s the kind of unique sustainability benefits Aluminium beverages can offer. It is a good alternative to PET as well as other packaging substrates.

WP?: When you talk about collections of cans, it sounds good, but what about de-inking of the Aluminium can? What is the process and how are you doing that?
AL: The process for recycling Aluminium beverage cans is very straightforward. It's a simple melting process of the metal and the ink on the beverage cans separates by itself. This means, you don't need to go through a specific recycling process as such to separate out the ink or the small coatings that we would use to prevent beverage contamination.

WP?: When you talk about sustainability, that is also something that’s happening in terms of the safety of the package, for safe drinks. 
AL: The usage of ink is only outside, so it does not come into contact with the beverage. There is no risk of contamination. We only use food-grade ink certified by relevant bodies such as the FDA for printing on the exterior surface of the cans.

Amit Lahoti, managing director, Ball Beverage Packaging (India) 

WP?: Can you explain how important the Aluminium cans are, in terms of using inks and coatings?
AL: The part that comes in contact with the beverage is the coating. We use a range of epoxy as well as BPNI coatings on our beverage cans, and these are all certified food grade. Before the coating is used it goes through an extensive PCT-product compatibility test on various types of beverages. These coatings are not standard across all beverages. For instance, beer is different from a soft drink, but the biggest differences occur when we have a high pH drink like energy drinks. In these cases, we adopt a different kind of coating to give higher protection to the beverage when compared to carbonated soft drinks.

WP?: Please share an example ...
AL: In the last two years, we have started using Aluminium cans to package wine. We are already working with Fratelli wines who have commercially launched products in India. This has been made possible because of the innovation we’ve run around coating to protect the flavour profile of wines. Additionally, in India, we have also innovated coatings that make Aluminium cans a great option for packaging hard drinks in cans as well. We have expanded the range of products in the beverage categories.

WP?: Such as?
AL: We are now serving everything from traditional carbonated soft drinks to a range of beers and a range of other beverage categories in Aluminium cans.

WP?: Since you intend to explore the wine segment, can you share what exactly is the procedure / percentage of Aluminium to glass, because your most important competitor would be glass bottles?
AL: It's only been a couple of years since we began working with one of the largest wine producers in India, Fratelli Wines. However, based on the success we have experienced, we are now working with many wine producers in the country. While the current percentage of wine in cans is not very high, from a beverage cans perspective, it offers unique advantages.

WP?: What advantages do you offer over glass?
AL: When you open a bottle of wine, it's a big, large bottle of wine, and finishing it in one go becomes difficult. So, I guess it’s a combination of customer convenience and the manufacturers' confidence in putting wine in cans. 

WP?: How did you gain confidence?
AL: Prior to the commercial launch, we did a lot of work in terms of product compatibility tests and ensuring the coatings were right for the product to be held in beverage cans as compared to glass-bottles. There’s still a long way to go in terms of increasing and making a sizable percentage of wine in cans as compared to glass, but we are seeing good traction come through from the commercial launches we have accomplished till now.

WP?: When you talk about the ease of using Aluminium, how easy is it to design a cool-looking can?
AL: We have in-house graphics and design capabilities. We work with a lot of brands to help them with their design requirements. Larger customers, such as United Breweries, ABInBev, or Pepsi, have their own graphic capabilities. Whereas for some of the newer customers who do not have those capabilities, we have our own in-house graphic capabilities. And so, we help customers design graphics that get printed onto what we call a plate that goes on our decorator.

We also have that platemaking capability in-house, so none of these processes are outsourced. We offer our customers unique kinds of benefits in terms of offering good, quick, easy solutions as well as inexpensive solutions as compared to some of the outsourced solutions which may be available in this regard. Whether you want those graphics and plates or not, it's just a question of putting those plates on the decorator which we have in our process to get the printing and manufacturing online in an efficient manner.

WP?: How do you manage your minimum order quantity (MOQs)? Today people talk only about short runs, and there are numerous samples to do?
AL: From a MOQ perspective, it depends on our customers and their requirements. Beverage-can lines are designed to operate at a fast pace, in a very fast environment. So typically, lines would operate from 1,800 to 2,200 cans per minute. So, it's a fairly fast manufacturing process and any stoppage in that consumes some of the line time and associated costs, but that does not stop us from doing different labels or innovating for customers who are launching new products or want to do different kinds of labels.

WP?: Are there any challenges associated with doing a new launch campaign?
AL: The challenge will always be to optimise these runs because when you stop the line from one level to another, it consumes time, and hence the associated cost increases. So the challenge is always to optimise the runs. This is one area we are seeking to enhance. Of course, a newer brand would want to launch different SKUs to test the market, but how we work with smaller brands is to help them launch different kinds of SKUs and different labels and graphics without impacting the costs too much. But at some point, it's best to optimise the process.

WP? Tough?
AL: Yes. India has 29 different markets and even if you have five labels, that's going to be in excess of managing 105 SKUs. So that's something we work with our customers to streamline. But at the same time, the supply chain and the complexity surrounding MOQs, not just from a packaging printing perspective, but also from an estimation point-of-view start to get very complex very quickly. Therefore, we share our important lessons with newer brands on this front to help them make better decisions.

WP?: Aluminium certainly would be more expensive than, say, paper. So, are there any specific applications that the brands come for as alternatives for paper and PET?
AL: The paper cardboard or multi-level packaging, has got challenges around recyclability. This is unlike the kind of what we see is being advertised. The actual recycling rate of those packages is very low and that's because of the multilayer packaging which has got cardboard, plastic, and a very thin layer of Aluminium, all embedded in a small layer of packaging. To separate it out and effectively recycle it is difficult. So that's a major reason for many brands to approach us for a more sustainable and efficient solution.

WP? The government and EPR policy?
AL: The government is also placing a lot of importance on EPR, and collection norms. Actual recycling is gaining importance at a fast pace. Brands are realising that they can't wait till EPR norms are effectively enforced. They want to be ready with solutions and that's where we are seeing a very heavy discussion with various brands, not just spirits but across the value chain and different beverage categories on how Aluminium could be a solution.

WP?: It was all Aluminium many years ago, then plastic came along, and then things went downhill for Aluminium. What went wrong?
AL: The most important factor for PET gaining popularity is its cost-benefit. And what the manufacturers of the packaging substrates are looking at is just the cost of buying PET versus any other packaging substrate. And being a manufacturer of Aluminium beverage cans, I would say, we don't come close in comparison to the cost of just producing PET from virgin resin. So, we can't compete on that cost and that has been the biggest benefit that comes from PET.

WP? Your take on PET?
AL: PET is a great material if used effectively. However, its challenges are that when you look at the total cost of ownership, that's where PET loses out. Today there's a lot of pressure from consumers, NGOs, and governments from across the value chain saying there's no proposition for plastic packaging for recycling and end-of-life use. That's really where I'd say the Aluminium beverage cans domain really comes into play.

WP?: In what way?
AL: More than 70% of Aluminium beverage cans are recycled. Also, we believe that Aluminium beverage cans are better than other beverage packaging formats, especially in the sustainability space, based on our life cycle assessments and possibly scientific reports.

WP?: So, will the adoption of cans by millennials and sustainability impact the growth of Aluminium?
AL: Ball sponsored a Kantar study, which was conducted in a few Southeast Asian countries. We wanted to go out to real consumers and understand the adoption of Aluminium packaging. What was really clear to us is that the millennials have consistently looked at Aluminium, and when they understood the sustainability benefits of Aluminium beverage cans, there was a very clear preference and adoption of Aluminium beverage cans across the value chain. Then you get to the age group 35 to 45, and 45-55, who are conscious of value versus adoption. What we are increasingly seeing in this segment of people is awareness about pollution, be it air or water. This group is now looking at how they can get a better lifestyle.

WP?: So greater acceptance?
AL: What surfaced from the Kantar study was that the benefits of Aluminium cans versus other packaging substrates were more visible with people below the age of 45, there was an increased willingness to adopt Aluminium cans by the people above the age of 45. And as the cost of Aluminium versus plastic starts to become equal, and I'll come on to why it will start to become lower, there is a faster adoption from this age group as well.

WP?: You spoke about the total cost of ownership between Aluminium and plastic. How would the gap narrow down?
AL: So, we all know about extended producers' responsibility (EPR). That in simple words means that if you're a manufacturer of a package and it costs X to recycle – collect, recycle and put the end-of-life-use of that package, that charge is going to be charged to the manufacturers going forward. That's what norms are intended to do. If your cost of the package is let's call it Rs 10, then the total cost through EPR would become significant, say Rs 15-17. The other packages had an advantage over Aluminium because the cost of manufacturing an Aluminium can was high. But, once you start adding this EPR into the cost of other packages, that gap between Aluminium and others will narrow, which will lead to consumers adopting Aluminium packs on a massive mass scale, and this is where we see a shift in a trend going forward.

WP?: Is printing on Aluminium affordable, then say, printing on PET or paperback?
AL: For us, it's an integrated solution. From a financial perspective, it does not add a huge amount of cost for us. From a glass perspective – having a label, printing on the label, sticking the label to the glass, and then from a recycling perspective removing that label is a huge issue across the value chain because it has to be manually removed by soaking in water. This entire process consumes a lot of resources including freshwater. So I would say if you look at the entire value chain from production as well as recycling, I think Aluminium cans offer a much more competitive solution as compared to other beverage packaging options.

WP?: There are companies, which collaborate with brands, on waste collection initiatives. Any such Ball initiative with brands?
AL: We are right now in the process of signing a memorandum of understanding (MoU) with ABInbev, which is one of the biggest producers of beer in the world. In India, we are working with them on the collection of used beverage cans. A couple of years ago, we signed an MoU with ‘Recykal’, which is a waste management company to collect used beverage cans with the support of local waste collectors. This initiative has truly impacted the lives of local waste pickers by providing them with a fair value for the cans collected.

WP?: On your suppliers' side, what kind of responsibility do you fix on them?
AL: We work with our suppliers on a global scale to ensure that we source responsibly. We have various partnership programmes on increasing our recycled content. One of the programmes which are part of our production sustainability is the ASI certification, which is the "Aluminium Stewardship Initiative" certification, and that's a globally recognised certification.

So, if I give you a consumer product or electronic product point of view, the ISI mark is a trusted source where you know the product is compatible or up to a certain standard. In the Aluminium world, it's an ASI certification, where there are a lot of ill-effects associated with bauxite mining, child labour around bauxite mining, high-energy usage in the production of Aluminium.

So, what ASI certification does is make its case for ensuring that all those ill-effects associated with the production of Aluminium are avoided. I am proud to say we've recently secured ASI certifications for both our plants in India as well. Although the certifications are still on the way, both of our plants in India will be ASI certified by the end of this year, and a lot of our suppliers are ASI certified as well.

These are tough audits to pass. But we believe in not just ourselves but also our suppliers and are working in partnership with them to gain these certifications, which give us real scientific evidence when we talk about Aluminium beverage cans as the most sustainable solution.

WP?: Your production line-up in India, processes involved?
AL: It's a fairly high-speed manufacturing process, the lines are capable of running at 1,800 to 2,200 cans per minute. The machinery is imported from different parts of the world, and we use a fairly diverse workforce for helping us manufacture these beverage cans. So, from a total capacity point of view, we have an installed capacity in the range of one-and-a-half to two-billion beverage cans across the two beverage can manufacturing plants.

WP?: What inspection system and quality-checks do you deploy?
AL: We have a combination of Ball in-house developed inspection equipment. Alongside that, we use various cameras and work with various world-class suppliers who supply inspection cameras, which are installed not just at the end but across the lines to ensure that it’s a fairly high-speed manufacturing process. So, the precision of the beverage cans across the lines is very important to ensure the quality of the product when shipped out is of the highest quality.

WP?: Positive customer feedback?
AL: What we're really proud to share is across the region here and in particular India, the customer satisfaction ratios that we get from a world-renowned agency, which does the customer ratings for us is that we are at the top percentile for beverage cans from India when compared to other parts of the globe. We are proud of our quality as well as the kind of manufacturing parameters we follow in the four walls of our plants.

WP?: The brands are sensitive about the shades and variations that go on the packaging. Any challenges there?
AL: I think it's all an automated process, so we don't have any manual interventions here. The matching of different shades and the innovative graphics and printing capability are installed across our two plants. So from that perspective, we have strong process capability to match the demanding requirements of customers and can match their designs effortlessly.

WP?: When you talk about Aluminium, is there something like a premium run?
AL: No. It's all a standard run for us, so as such, the line runs at the same speed for any kind of printing, so we don't have those complications of a vanilla run. From that perspective, the capabilities of our plants are standard. We can offer customers various finishes like matte or ductile, with complex printing capability. So, we don't have any complications where a premium product will have to run slower. That's why we have installed high-value equipment to ensure that we are all running at the right capability.

WP?: Can you just run us through the AI packaging in India that you have done?
AL: We offer various solutions to our customers on the AI front. There is a lot of interaction which our customers can offer to their consumers. We have the ability to generate QR codes that can facilitate various kinds of interactions between brands and their consumers. So, we worked alongside our customers to offer these solutions with different kinds of capabilities to print on the can, generate those QR codes, and different interactions with a graphic capability point of view.

WP?: What is transpiring with typical Indian products like pickles, rasgullas, gulab jamuns, edible oils, etc?
AL: We are focused on the beverage space, so we don't look at food packaging.

WP?: Metal packaging in India is about Rs 10,000-crore. What is the present industry scenario according to you? For example, growth trends in Aluminium and tinplate?
AL: I can't really comment on the tinplate because we don't work in that area. From an Aluminium point of view, we believe we are still at a very nascent stage, and the growth has picked up in the last couple of years. Consumer trends are helping us support this growth and we've been able to grow at double digits over the last two years. 

WP?: You said, last two years – does that include the 20 months of the pandemic?
AL: Yes, so that is the trend we're seeing especially following the initial lockdown for a couple of months. But beyond that, I think we're seeing strong adoption from a hygiene perspective. People are preferring single-use recyclable packaging solutions which are safer than re-use materials like glass bottles. From that perspective, we're seeing a very positive consumer trend since the onset of the pandemic.

WP?: Would you have a ratio of data on beverage vs beverage can vs glass vs glass bottle consumption in India?
AL: It varies significantly between beverage categories, so if you look at beer, we have penetrated at a good level versus the carbonated soft drinks where PET is a prevalent format although there are various challenges as we discussed. Beverage cans are very small. So, the biggest segment for us remains beer, which is where we're penetrated well. We believe there is a lot of growth, which could come from there.

WP?: The upheaval in the international Aluminium market, particularly the price hike, has had its effects on the print industry, especially in the plate segment. Did it impact you?
AL: We are working with our customers. A lot of the metal cost is on a pass-through basis in our commercial contracts. So fluctuations in global prices impact the overall cost of the product. But supply chain disruptions and inflation associated with that are part of the world we live in.

WP?: Also, the hike in raw material prices. Earlier it used to be spaced out, now it's dynamic and volatile. Is it impacting Ball operation?
AL: Supply chain cost inflation is not just impacting Ball, it's impacting everybody –  whether you're in the packaging space or consumer product space. I won't say it's impacting us more than in the same way it is impacting other packaging or consumer product segments.

WP?: What are your plans for 2021-2022 for India?
AL: The plan is for growth. We have installed capacity, which was done when we launched our Sri City plant a few years ago. We installed that capacity ahead of the demand. So, our focus is to really optimise and scale production at our existing plants and really continue the strong growth trend we witnessed in 2021.

WP?: You are partnered with Arsenal Football club in the UK. Any plans for India? Franchise plans for India?
AL: Yes, we have a global partnership with Kroenke Sports & Entertainment, which gives us access to the various sports teams they own across the globe. Arsenal Football Club is one of them. Denver Nuggets, which is a great basketball team in the US, is another one of them. So, it's a partnership with Kroenke Sports & Entertainment. We continue to partner with various brands that can help us promote the benefits of Aluminium cans.