Crowns and Closures

Industry Snapshot

The crowns and closures industrial classification is a portion of the larger stamped metals industry, which was becoming highly fragmented during the early twenty-first century. As bottlers sought lower production costs, more tamper-evident packaging, and better printability for product differentiation, many continued to move away from metal closures, preferring plastic ones instead.

The metal crown and closure manufacturing industry garnered sales of $67.7 million in 2010, according to Dun & Bradstreet. Only 45 U.S. establishments engaged specifically in metal crowns and closures manufacturing, compared to 54 in 2005. These establishments employed a total of 2,509 workers, which was a significant decrease from 3,590 in 2005 and 2,842 in 2008, and sales were also on the decline. West Virginia was the top earning state in 2010, at $36.4 million. Other states that contributed to the industry's revenues included Michigan, Connecticut, Illinois, and Texas, which together accounted for 32 percent of the total.

Organization and Structure

The U.S. Census Bureau divided the products of this industry into three sections. Metal commercial closures and metal home canning closures comprised about 84 percent of the total market, metal crowns for glass and metal containers represented 14 percent, and nonspecific crowns and closures represented the remainder. Aluminum, in the form of sheet, plate, and foil, was proportionately the industry's largest input. Tin plate, tin-free steel, terneplate, and black plate represented the second most-consumed materials. Carbon steel sheet and strips were also used.

In the 2000s, bottled and canned soft drink manufacturers used approximately 22 percent of the industry's output. Malt beverage makers used 11 percent; pickles, sauces, and salad dressings accounted for 11 percent; and canned fruits and vegetables used 8 percent. The industry's products were also used in the packaging of roasted coffee, wines, brandy, brandy spirits, toilet preparations, and confectionery products.

Background and Development

Shipments in the metal crowns and closures industry increased in the early and mid-1990s, moving from $720.2 million in 1990 to $770.9 million in 1995 after a peak in 1993 at $837.1 million. Much of the increase was attributed to a shortage in plastic closures, forcing some bottlers to turn to metal. Employment in this industry, however, fell steadily. In 1983 the industry reported 7,100 employees, 5,700 of whom were production workers. By 1995 this total was 4,300, with 3,500 production workers.

A new development in aluminum can closures surfaced in 1996, building on the existing concept of the "eco-lid." The eco-lid is a tab that allows the consumer to open a beverage can by pushing the lid inside the body of the container. The lid stays attached to the can, reducing solid waste. Some hygienic concerns continued to exist for the eco-lid, since the beverage unfailingly comes in contact with the exposed part of the package that gets pushed inside the can. An innovation called S.H.E.S (which stood for "Safe, Hygienic, Easy, Simple") addressed this concern with a fully recyclable dispenser inside the can. The dispenser is pulled out when the can is opened.

Industry sales fluctuated in response to conditions in the plastics market. Metal closure sales picked up when a high worldwide demand for polypropylene, a type of resin used to manufacture plastic closures, slowed the shift from metal to plastic closures. At the same time, some bottlers' market research showed that in certain cases, consumers actually preferred metal closures to plastic.

The value of industry shipments declined steadily for nearly two decades and fell from $953 million in 1997 to $896 million in 1999. In 2000 the value of shipments dropped to $887 million, but by 2002 totals had rebounded to $901 million, and by 2005 had reached $977 million. The crown, closure, and metal stamping manufacturing industries shipped products with a combined value of $12.5 a billion in 2005, an increase from $9.9 billion in 2002.

Of the 50 plants in operation in 2008, 23 were engaged in manufacturing crowns and closures with 46 percent of market share and 1,244 workers valued at $304.2 million. Stamped metal closures were manufactured at 18 plants. Collectively, they shared 36 percent of industry share, 1,209 workers, and $139.7 million in sales. There were roughly nine facilities that manufactured bottle caps and tops from stamped metal responsible for 18 percent of market share employing 389 workers who shipped $2.9 million in caps and tops.

U.S. demand for caps and closures was forecast to climb, although plastic closures continued to outperform metal closures. A study released by market research firm The Freedonia Group, Inc., suggested that "Plastic will further expand its share by supplanting metal closures as plastic containers increasingly replace glass containers and compatible metal closures in a variety of food and beverage applications." The news for the metal closures market was not all bad, however. Consumption of metal crown was on the rise in terms of consumers who preferred bottled beer over canned beer.

Current Conditions

According to a 2010 report by The Freedonia Group released by Marketwire, the market for metal crowns and closures declined through the first decade of the 2000s and was projected to continue to fall into the mid-2010s. For example, of all crowns and closures manufactured in the United States in 2004, about 14 percent were made of metal. In 2009 that figure had dropped to 11 percent, and by 2014, it was expected that only 9 percent of crowns and closures used in the United States would be metal. The plastic crowns and closures segment, however, was expected to experience annual growth of about 4.5 percent through 2014. That segment's market share had risen from 77 percent in 2004 to 79 percent in 2009 and was expected to claim 81 percent of the market by 2014. Crowns and closures made from materials other than plastic or metal made up between 9 and 10 percent of the market annually. Beverages remained the largest market for caps and closures, with about 50 percent of caps and closures being used on beverage products. The total market would be worth $9.5 billion by 2014.

The Freedonia Group indicated that the decline in the metal cap and closures industry was "a result of further inroads by plastic containers and closures and a sluggish outlook for production of beer, the dominant application for metal crowns."

Industry Leaders

Philadelphia-based Crown Holdings, with 20,400 employees, reported 2010 sales of $7.9 billion, a portion of which was related to its crown and closure divisions. Similarly, Broomfield, Colorado-based Ball Corp., with 14,000 employees, reported that part of the 2010 sales of $7.6 billion were related to products in this industry. Jarden Corp. of Rye, New York, had 24,000 employees and 2010 sales of $6 billion from its diverse product offerings. AptarGroup Inc., of Crystal Lake, Illinois, reported $2 billion in 2010 sales, which was divided among its closure and packaging segments, and employed 8,600 people.

Workforce

According to Dun & Bradstreet, crowns and closures manufacturers employed 2,509 people in 2010. Of these, approximately 48 percent were employed by plants that manufactured stamped metal closures; 40 percent worked for manufacturers of crowns and closures; and 12 percent were employed by makers of stamped metal bottle caps and tops.

Employment was expected to continue to decline through the 2010s for both metalworking and plastics-working machine operators. Metalworkers were expected to be affected more than those employed in plastics because plastic products were used increasingly in place of metal in consumer and manufacturing products. Another reason for the drop in employment was the widespread use of computer-controlled production equipment.