Crown Cork & Seal

1. What is the appropriate industry to analyze ?

Throughout the 1980’s, plastics was the growth leader in the container industry. Plastic’s light weight and convenient handling contributed to widespread consumer acceptance. The greatest challenge was the need to produce a material that simultaneously retained carbonation and prevented infiltration of oxygen. Since 1987, the growth of plastics slowed somewhat apparently. Plastics recycling was not a “closed loop” system.

Glass once had the cost advantage. Soft drink bottlers preferred the metal can to glass because of a variety of logistical and economic benefits: faster filling speeds, lighter weight, compactness for inventory, and transportation efficiency. The area in which glass continued to outperform metal was the beer category where consumers seemed to have a love affair with the “long neck” bottle that would work to its advantage.

2. How attractive has the metal container industry been over the years?

The metal container industry, representing 61% of all packaged products in the United States in 1989, produced metal cans, crowns, and closures to hold or seal an almost endless variety of consumer and industrial goods. Glass and plastic containers split the balance of the container market with shares of 21% and 18%, respectively. Metal cans served the beverage, food, and general packaging industries. Throughout the decade of the 1980’s, the number of metal cans shipped grew by an annual average of 3.7%.

3. How well did Crown do under John Connelly?

Connelly emphasized cost