US beer decline impacts O-I glass sales

A decline in beer sales in the USA helped cause a drop in sales for O-I container glassmaker.

The US-based global glass container manufacturer reported Q3 2019 profits were down by $50 million compared to the same period last year.

Segment operating profit was $205 million, compared with $255 million in the third quarter of 2018

It said $32 million of this decline was attributable to currency and discrete items. But it reported that unfavourable demand trends for beer and non-alcoholic beverages in the USA had continued.

Andres Lopez, O-I CEO and President, said: “To be clear, changing market dynamics is the largest development affecting our business. This includes the accelerated decline in US beer demand that started in 2018 and has continued into 2019.

“More recently, we have seen a broader market slowdown that is most notable in the US, Mexico and China. With that said, we continue to see good growth in markets where we added new capacity, such as in Latin America.”

He said the company was developing new products to address the beer decline.

“We have very strong capabilities in new product development. So we're working on developing new product breakthrough innovations for beer as well as for hard seltzers so we can enter the hard seltzers category in the near future, and we can support volumes in beer in a better way in the future.”

The company reported strong growth in both Brazil and Colombia, where it has recently added capacity.

Ongoing projects include the fifth furnace at its JV with Constellation in Mexico and its brownfield expansion in Gironcourt, France, where both are due to begin production in the first half of 2020