SIC 3221
GLASS CONTAINERS



This category includes establishments primarily engaged in manufacturing glass containers for commercial packing and bottling, and for home canning. Products include ampoules; bottles, containers, jars, and jugs for packing, bottling, and canning; carboys; cosmetic jars; fruit jars; medicine bottles; packers' ware; vials; and water bottles.

NAICS Code(s)

327213 (Glass Container Manufacturing)

Industry Snapshot

In 2001, the industry shipped 244.3 million gross of glass containers, down from 246.5 million gross in 2000. Imports of glass containers in 2001 totaled 27.9 million gross, compared with 30.6 million gross in 2000; and glass container exports totaled 11 million gross, compared with 8.8 million gross in 2000. The industry's workforce in 2001 totaled about 15,600 workers, reflecting a steady decline in employment over the previous 10 years.

Production of glass containers in 2001 totaled 240.5 million gross, an decrease of 3.7 percent from the 247.7 million gross produced in 2000. More than three-quarters of the glass containers produced in 2001 were of the narrow-neck variety, with the remainder falling into the wide-mouth category. Nearly 80 percent of the glass containers produced and shipped are of the narrow-neck variety, with the remainder consisting of wide-mouth containers.

Despite aggressive promotions, the glass container market remained sluggish. Consequently, the glass container industry has become smaller but also much smarter. Promotion, however, continues to target those areas where glass retains a winning edge as a premium product. New markets include premixed alcoholic beverages, known as "malternatives."

Organization and Structure

The glass container industry manufactures two basic types of containers: narrow neck and wide mouth containers. The industry further classifies containers by their end use, creating categories of glass designated for food, beverages, beer, liquor, and wine; chemical, household, and industrial uses; toiletries and cosmetics; and other uses including medicinal and health supplies. Wide mouth and narrow neck bottles are used interchangeably, depending on the product, but tradition or utility occasionally dictates specific bottle types. For example, milk is normally packaged in wide mouth containers, both wide mouth and narrow neck bottles are used for cosmetics, while narrow neck bottles are more practical for perfumes.

Consumer preferences and marketing strategy often combine to determine whether a product is packaged in a wide mouth or narrow neck container. One company used feedback from consumer focus groups to determine the best container for mustard. Participants expressed preference for a wide-mouth jar that would allow the use of a large serving spoon or spatula. The company's selection of a wide mouth container originated from an entirely different perspective. A smaller jar, in the company's estimation, connoted saving the product for special occasions rather than using it as a special item for everyday meals. Thus, the selection of wide-mouth jars satisfied consumer preferences and complemented the company's marketing strategy.

Shape is the most important feature of a bottle. To be practical, a bottle must be able to stand up, have a filling mouth, and withstand a variety of mechanical handling devices such as washing machines, filling tubes, labelers, and conveyors. According to experts, spherical-shaped containers present the most efficient use of glass container weight. After the sphere, the most efficient use of glass is a cylinder with similar dimensions of diameter and height. The container industry generally favors glass shapes characterized by broad, rounded shoulders, edges, and corners. To ensure maximum strength, the industry avoids the use of square or rectangular shapes, flats or panels, or offsets. Glass containers are also designed to convey a brand image. Clear beveled-edge bottles offer high profile products an advantageous shelf presence and easy handling benefits for consumers.

Even more marketable are glass containers combining eye-catching designs with a functional after-life as decanters or collector items. A few decades ago, small, odd-sized and shaped bottles were replaced by standardized bottles, in part because manufacturers discovered that standardized bottles could be produced faster using the old machinery. While most odd-shaped bottles have disappeared, they are now prized and traded as antique collectibles. In the 1990s, Dr Pepper issued a commemorative bottle saluting the involvement of U.S. troops in Operation Desert Storm. In contrast, plastic or aluminum containers rarely offer any collectible value. For the industry, bottle collecting could increase industry share of the beverage market by 3 percent and account for 25 percent of all glass beverage bottles.

Manufacturers capitalize on designer appeal of glass containers by constantly adding innovative styles. Each year, the Glass Packaging Institute recognizes creative glass containers by granting awards in several categories, including food, beverage, package design, label, environmental awareness, and mature product repositioning. In 1989, Fireworks Popcorn captured first place as winner in the overall food category. The award-winning package highlighted the product's vivid popcorn colors by using a clear, reusable 15-ounce jar shaped like a home canning jar. In the beverage category, first place honor went to Ocean Spray's choice of a large, collector-type glass carafe packaging its premium fruit juice.

Changing the design of a glass container entails more than adding a new face. Most design changes create a ripple effect on the overall product manufacturing process, affecting cost and product positioning. Even the slightest modifications—such as availing a round food jar or adding a modest blown-in decorative effect—can increase the container's weight by 20 percent. Maintaining lighter weight without reducing container strength highlights one persistent industry concern. One solution to the weight problems is the use of the narrow neck press and blow technology capable of manufacturing more efficient containers at 15 to 20 percent lighter weights. Another possible solution to weight reduction of glass containers is the development of a process that uniformly maintains glass wall thickness and enhances the container strength through some type of coating. The results would be a 12-ounce capacity container made in the 3 to 4 ounce weight range. According to an industry spokesperson, once manufacturers improve control over the container production process, weight problems will be alleviated.

Many gloriously designed containers generate both consumer delights and production havoc. For example, Welch's redesign of a popular jelly jar featuring a new tear drop-shaped container proved popular with consumers but caused countless cost and handling problems. Because the tapered glass jar was smallest at the bottom, with jar-to-jar contact only at the shoulder, containers frequently toppled over on the conveyors. Case packing of the tear-drop jars necessitated manual rather than the usual mechanical handling, thereby adding three packers per shift. Because of the additional costs accompanying the new design, the company redesigned the container by making the container base the same diameter as the shoulders. The slightly heavier jar caused a modest increase in freight costs, but by eliminating the jar's tip-over tendency, case packing increased by 2,000 per shift, thereby eliminating the need for additional production shifts.

For many other products, the image qualities of glass containers combine with other features to convey a unique premium appeal. Glass packaged wine coolers, for example, were tremendously popular in the mid-1980s, with sales as high as three million bottles daily. Analysts attributed the boom in part to the popularity of the single-serving bottle, a concept that was virtually unknown a few years earlier. Successful demonstration of the concept with wine coolers led to single-serve juice beverages and later bottled water. Gatorade, for one, reported a 30 percent sales increase in one year following introduction of a 16-ounce, single-serve, wide mouth bottle, conveniently suitable for carrying "at the point of sweat." More than 100 companies later joined the promotion of the single-serve bottles' health advantages. The single-serve concept also motivated distilled spirits producers to carve their niche by introducing spirit coolers in single-serve glass bottles.

Background and Development

For centuries, glass objects were made by artisans using hand-blowing methods. Many products created by these highly trained craftsmen now adorn art museum collections. Mechanization came to the glass-making industry with the industrial revolution and subsequent introduction of pressing machines. This and other refinements promoted a range of new designs and uses of glass containers. Wide mouth Mason jars became popular in the United States in the early 1900s, while the popularity of narrow neck jars developed more slowly.

M. J. Owens and E. D. Libbey initiated a new process of bottle making by filling and dipping the first or blank mold into hot glass and evacuating the air from the mold. Several years of experimentation finally led to the development of an automated bottle machine. By 1920, 200 of these automatic machines accounted for approximately 45 percent of the total U.S. bottle production.

In 1975, the Environmental Protection Agency (EPA) issued standards and guidelines covering wastewater discharges from glass container manufacturing plants. The regulations targeted oil and grease pollution that originated from soluble oils used in glass shearing, machine lubrication, and condensation from compressed air systems. Oil and grease pollution stems from the biodegradable nature of emulsified oil that subjects cullet quench systems (broken or refuse glass added to new material to facilitate the glass-making procedure) to severe biological growth problems. According to Glass Magazine, biological growth within cullet quench systems degrades oil and grease removal efficiency, often resulting in discharge values exceeding regulatory standards. Additionally, the biologically fouled cullet quench system precipitates a potential health hazard in the form of Legionnaire's Disease, as well as contributes to unpleasant working conditions.

A Packaging magazine survey in 1986 proved that promotion of glass containers had been successful. For several years, advertisers within the glass manufacturing industry have focused on the positive aspects of glass container use. At one point, glass container manufacturers sponsored advertising campaigns touting their product as a naturally pure, recyclable taste protector. Particularly innovative was the industry's Nickel Solution Trust, formed in 1983 by a coalition of labor organizations and glass container manufacturers. Employees of glass container companies pledged a nickel of each hourly pay, and the employers contributed matching funds to pay for glass promotions. Since its inception, the trust has expended more than $21 million for recycling program development and management.

In 1998, production of glass containers amounted to 256.4 million gross, while shipments totaled only 253.7 million gross. The previous year, glass container output totaled 247.4 million gross, outpaced by shipments of 254.5 million gross. Shipments of narrow neck containers in 1998 totaled 200.9 million gross, while wide mouth container shipments numbered 52.8 million gross. This compared with 1997 shipments of 200.5 million gross of narrow neck containers and nearly 54.0 million gross of wide mouth containers. Production and shipment of narrow neck containers consistently outrank those of wide mouth containers. Wide mouth containers are most popular for food, including dairy products, and have held steady sales and production over the last few years. The lowest shipment and production levels are for narrow neck and wide mouth chemical, household, and industrial containers. At best, the glass container industry can be described as flat. Bottle shipments, according to analysts, will likely remain flat. Continued overcapacity and the threat of conversion to alternative packaging stands to keep price increases in the 3.0 to 3.5 percent range.

Several factors contribute to the flat conditions of the glass container industry. Since the 1980s, the glass container market has suffered a steady loss of market share to alternate plastic and can packaging. Analysts point to the beer industry as a major factor causing the decline of the glass container industry. More than 85 percent of the decline was due to brewers switching to aluminum cans, and the lingering residual of this change still poses an imminently significant threat, in the industry's opinion. Statistics may well support this threat. Although shipment and production of beer bottles remain high, at about 88 million, analysts feared a decline as higher price tags forced consumers to switch to lower-priced canned beer.

One drawback to recycling cited by the Glass Packaging Institute relates to forced deposit laws requiring a consumer to pay a deposit and then return the containers to the store for a refund. The industry perceives such legislation as devastating to the market share of environmentally friendly glass containers and argues that it sways consumers to use plastic. GPI believes the most effective way to reduce solid waste is not forced deposit laws, but comprehensive curbside recycling. The practice of bottle refilling as an alternative to recycling may experience a comeback.

The Glass Packaging Institute noted that the 1990s began with five major bottling companies switching from plastic to glass containers, because of consumer preference, environmental climate, and packaging costs. According to investment analysts, however, falling resin prices could be an omen signaling a return to plastic. In 1989, a price differential of 20 percent between plastic and glass caused plastic to lose its market share to glass, primarily in the area of 16-ounce containers. When the differential was closer to 5 percent or less, plastic regained some of its share. Until the glass container industry develops a more cost-competitive, lighter weight, or break-resistant package, analysts foresee fewer gains derived from the anticipated growth of the soft drink market.

Another challenge facing the glass container industry involves raw materials leftover from the manufacturing process. According to an industry spokesperson, only 85 to 90 percent of the melted raw materials are converted to a marketable product. The remaining 10 to 15 percent of raw material becomes cullet or discarded waste, mostly broken glass. Industry leaders are attempting to devise satisfactory uses for this cullet.

Hurt during the first nine months of 1999 by "severe economic conditions in emerging markets in South America and Eastern Europe," industry leader Owens-Illinois reported in October 1999 that increased domestic shipments of beer, juice, and tea containers had largely offset declines in the demand for certain food, liquor, drug, and chemical containers. Joseph H. Lemieux, the company's CEO, said that "despite current problems in some international markets, most of our businesses are continuing to perform well. We believe that our businesses have excellent potential for long-term earnings growth, including the operations in countries where we have experienced recent difficulties due to adverse economic conditions."

Current Conditions

Of the 244.3 million gross shipped in 2001, 51 percent of all glass containers were used for beer, the industry's largest market category. Food containers accounted for 23 percent of shipments; carbonated and noncarbonated beverages, 9 percent; wine, 5 percent; liquor, 4 percent; and ready-to-drink alcoholic beverages, 3 percent. All other uses, including chemical, cosmetic, household, health, industry, medicinal, and toiletry products, accounted for the remaining 5 percent.

The glass container industry continues to lose market share to plastic, although at a slowed pace from the previous decade. For example, plastic containers used for beverages jumped from 14.3 million units in 1990 to 46.6 million units in 2000. At the same time, glass containers used for beverages fell from 30.7 million units in 1990 to 28.9 million units in 2000. Recent setbacks for the glass container industry include Gerber's decision in 2001 to start packaging all its baby food in plastic containers, based on market research that over two-thirds of consumers would prefer baby food packaged in plastic, and Miller Brewing Company's decision in 2000 to begin offering its Miller Lite, Miller Genuine Draft, and Icehouse beers in plastic bottles. Although the trend toward beer bottled in plastic has not developed significant results, any inroads into glass' coveted beer market would be viewed as very serious.

Playing on glass' image as being more trendy and prestigious than plastic packaging, the glass container industry hopes to overcome its drawbacks, which include its heavy weight (translating into increased shipping costs) and breakability. As a mature industry, new markets are not readily available; however, the industry has seen significant growth in the category of ready-to-drink alcoholic beverages. Smirnoff Ice, which saw sales jump from 300,000 cases in 2000 to 25 million in 2001, has been followed by a barrage of new offerings of "malteratives."

Industry Leaders

The undisputed leader in the glass container industry is Owens-Illinois, which posted 2002 revenue of $5.6 billion. Other major players in the North American market include Anchor Glass Corp. Formerly a subsidiary of now-bankrupt Canada Consumers Packaging, Anchor itself filed bankruptcy in 2002 and emerged for business in 2003. It operates a dozen facilities in the eastern United States. Revenues in 2002 totaled $715.6 million.

Workforce

In 2001, the industry employed about 16,000 people, down nearly 50 percent from 1990. Production workers' average hourly earnings were $21.10 in 2001, up from $17.81 in 1998 and $14.38 in 1990.

Noting significant improvements in labor productivity per unit, an Owens-Illinois spokesperson commented that producing a quality product still requires an excessive amount of work. Labor constitutes 35 percent of the cost of glass, but only 9 percent and 13 percent for cans and plastic, respectively. Although use of sophisticated control systems in the future will require more operator interpretation rather than intervention, production workers must be better trained and more knowledgeable than most manufacturing employees.

Research and Technology

Flexibility may determine the glass container's response to its environmental challenges. Glass is 100 percent recyclable. A used glass container can be melted and repeatedly made into a new glass container. Furthermore, glass recycling creates no additional waste or byproducts. Yet glass recycling ranks lower than that of plastic. The Glass Packaging Institute (GPI), the glass container industry's trade group, questions the Environmental Protection Agency's (EPA) statistics quoting the recycling rate for glass at 10 to 12 percent, plastic at 20 percent, and aluminum cans at 55 percent. Still, glass retains a positive recyclability perception. In contrast, recyclability of plastic beverage containers is accepted by only 20.7 percent of consumers.

Recent testimony before a Congressional subcommittee by the Glass Packaging Institute cited three major problems for the glass industry's recycling program: Plants are located primarily on the East and West coasts and the Southeast, transporting recycled glass from community collection facilities to these plants proves expensive; recycling of increasing amounts of imported green containers exceeds the domestic demand for these containers; and loose quality control at local collection sites, mixing recyclable and nonrecyclable glass, damages the manufacturing process. The most viable recycling solution, according to some experts, comes from less packaging. In the last 10 years, 16-ounce glass bottles have been reduced by 30 percent, thus lowering the amounts of materials and waste.

To date, a few technologies have demonstrated capacity for breaking up oil and grease found in glass container plant wastewater. One technology consists of carbon absorption, a process in which wastewater passes through a bed of activated carbon that absorbs the oil and grease. This process is more applicable to small flows with relatively low oil and grease loadings. The process of chemical coagulation followed by dissolved air flotation (DAF) is another process where chemical emulsion breakers and other processes are added to wastewater to break emulsion. DAF has been successfully used and research studies continue to study various emulsion breaking chemistries.

Since 1975, compliance with national standards has enabled glass container manufacturers to make significant improvements in control of oil and grease in wastewater. In the 1990s, companies placed greater emphasis on research and development to upgrade wastewater treatment technologies to comply with stringent state and local effluent standards.

In the future, the recyclable features of glass products could play a major role in safe disposal of hazardous waste, according to the editor of Glass Industry. The Department of Energy opened a new $1.3-billion Defense Waste Processing Facility in South Carolina designed to test the feasibility of encasing radioactive materials in glass. This process, known as vitrification, entails encasing hazardous waste in "logs" of strong glass, wrapped in steel. Steel cylinders measuring 10 feet high and 2 feet around each hold 165 gallons of waste.

Parallelling this project was an experiment during the 1990s at the California-based Lawrence Livermore National Laboratory on radioactivity released from glass. A computer model was designed to predict the release of radioactivity, if any, from a nuclear waste repository incorporating glass. To ensure adequate leakage prevention of harmful radioactive material from glass, scientists performed a variety of laboratory experiments and computer simulations of potential environmental scenarios that might be affected by radioactive leaks.

Large and small glass container manufacturers have spent millions for high-tech equipment and computerized operations. Part of the $40 million Anchor Glass expended in the 1990s was for the installation of sophisticated quality control equipment on all the company's production lines. Wheaton Glass completed a $10 million investment in manufacturing operations of containers for the parenteral drug and the cosmetics industries. Over a period of three years, Kerr invested in excess of $22 million for improvements such as computerized furnace control systems, high-productivity forming machines, and quality control equipment.

Considerable industry attention now focuses on eliminating weak spots of containers by uniform redistribution of glass. The benefits would be strong, lightweight containers with less glass produced faster and less expensively than at present. Several companies have achieved outstanding results by improving traditional machinery such as the latest press-and-blow molding. Owens-Illinois' "ten-quad machine" claims to be the fastest forming machine for glass containers in the United States. It operates at speeds of more than 450 containers per minute.

Glass coatings remain a significant aspect of research and development. Through a program identified as the Advanced Glass Treatment Systems, various coatings for strength enhancement of glass containers are being studied. Manufacturers are also experimenting with sophisticated hot-and cold-end coatings to reduce breakage and scuffing. These coatings also increase container filling speeds. A New York-based company developed a coating procedure identified as the Brandt Color Coat process. The water-based acrylic coating expands colors and textures of glass beverage bottles. Glass can be tinted in a range of desired colors combined with transparent opaque, matte, or frost finishes. The process offers more cost-effectiveness and more scratch-resistance than conventional bottle-tinting methods, plus a resistance to ultraviolet light, normally harmful to beverages such as beer. It also allows bottle labels to be printed with UV-cured inks without fear of harm to the contents. Anchor Glass Container is the only U.S. manufacturer to offer this new product.

In August 1999, industry leader Owens-Illinois announced that it had developed a new bottle making process that substantially reduces the amount of glass consumed. The end result is a lighter bottle, more easily handled by the consumer, and a production process that is quicker and more cost effective. The company said its new Duraglas XLT bottles retain all the functionality of current bottles but add increased strength while lowering the consumption of energy and raw materials in the production process. In announcing the new technology, Joseph H. Lemieux, Owens-Illinois chairman and CEO, said that, "The process for producing Duraglas XLT bottles is a major advance in glass container manufacturing, which will enable our customers to offer consumers the premium image of glass on an even more efficient and competitive basis with other rigid packaging materials. By dramatically reducing the amount of raw material and energy required in the manufacturing process and increasing the rate of production, Duraglas XLT containers help make glass one of the most cost effective and environmentally friendly, 100 percent recyclable choices in packaging."

Further Reading

"Beer, 'Malternatives' Continue to Help Drive Glass Bottle Demand." Packaging Strategies, 31 January 2003, S14-16.

"Biting Response Undermines Container Recycling Talks in the U.S." Business and the Environment, March 2002, 13-14.

"Cosmetic & Toiletry Containers Demand." Packaging Digest, March 2002, 4.

"Glass Markets." Ceramic Industry, August 2001, 65.

"Owens-Illinois Builds a Better Glass Bottle." PR Newswire, 16 August 1999.

"Owens-Illinois Reports Third Quarter Results." PR News-wire, 21 October 1999.

"U.S. Beverage Container Market." Beverage Industry, January 2002, 42.

"U.S. CSD Container Consumption." Beverage World, 15 June 2002, 44.

"What's Going On in Glass?" Beverage Industry, June 2002,86.



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