Ball Corporation (BALL) Earnings Call Transcript & Summary

Hello, and welcome to the 5th Annual Sustainable Futures Summit. I'm Jessica Alsford, Global Head of Sustainability Research at Morgan Stanley. And to begin, I hope that you and your family are safe and well at what is a difficult and challenging time for many. Please do note that this webcast is for our institutional and corporate client base and Morgan Stanley employees. This webcast is not for members of the press. If you are a member of the press, please do disconnect and reach out separately. Please also note that this webcast is not for retail and individual wealth management clients. For other important disclosures, please do see our Morgan Stanley research disclosure website. And if you have any questions, please do reach out to your Morgan Stanley sales representative. Over 360 investors have registered for today's conference, almost 3x the number of last year. Now notably part of the reason for this increase in attendees is the fact that it is now a virtual event that can be accessed globally. But it's also a reflection of the mainstreaming of ESG and sustainable investing. Indeed, a recent survey from Morgan Stanley's Institute for Sustainable Investing found that 80% of asset owners are actively integrating sustainable investing compared to 70% in 2017. And 57% of respondents said that they envisage a time when they will allocate solely to investment managers with a formal ESG approach. Now at the beginning of this year, I was frequently asked whether ESG was a bull market trend that would disappear as soon as markets were tested. Well, COVID-19 has provided that test. And we are now confident in saying that we fully expect sustainable investing to emerge stronger than before. Net flows to sustainability funds have been more resilient than the broader market, and key ESG indices have outperformed. Analysis of how companies are treating all stakeholders through the COVID-19 crisis has given a new prominence to the social aspect of ESG, whilst there is evidence of green regulation being an important part of the recovery, particularly in Europe. Now green regulation and climate change has been, by far, the most popular topic that we've covered over the last year. Indeed, social, political and regulatory trends in 2019 really turned climate change into a mainstream investor debate, impacting asset flows and asset prices. Naturally, we, therefore, have chosen to have a clear theme of climates and carbon through many of today's 10 sessions. And we shall be exploring this theme from the perspective of companies, including NextEra Energy, General Motors, Microsoft, Nikola Motor and Boston Properties. The sustainability is also broader than this. And so during today, we will also be hearing about Sustainable Apparel from Allbirds, the future packaging from Ball Corp and shared mobility from Uber. Finally, we're delighted to also hear from Steven Solomon from Global Public Health Consulting on COVID-19 and antimicrobial resistance. It should be a great day of content and a special thank you to Mark Savino and [ Janssen Yang ] for all of their work in putting together today's fantastic agenda. As I move on to our first session of the day on the circular economy, the future of packaging, and I am delighted to introduce John Hayes, Chairman, President and CEO of Ball Corp. John has been with Ball Corp since 1999 and has held a number of roles within the organization. Prior to that, John was an investment banker at Lehman Brothers, which is how he's originally introduced to the company. John is also one of the Board of Directors of Kohler Company, the Business Roundtable and on the Board of Trustees at Colgate University. Now over the next 30 minutes, we will be hearing about the importance of sustainable packaging for a safe economy. Since the 1960s, the amount of plastic produced globally has increased by over 20x and yet most plastic waste is not recycled, it usually ends up in landfill and all of our oceans. Now it's a complex problem to solve, particularly given the importance of packaging for reducing food waste and improving food safety. But one of the solutions is the aluminum can. You may not know but it's estimated that almost 75% of aluminum ever produced is still in use today due to the relatively low-cost and ease with which it can be recycled. Now Ball Corp is the world's largest global beverage can producer and also manufactures packaging for food and household products. As such, it has a key role to play in driving the safer economy, and we look forward to hearing how Ball Corp is thinking about the future packaging. There will be time at the end of this session for questions and answers. So please do submit those questions online as the session progresses. And I'll now hand over to Neel Kumar, Vice President at Morgan Stanley, who will be hosting the discussion. Thank you very much.

Great. Thank you, Jessica. And John, it's a real pleasure to have you with us today.

Yes. Thank you. It's my honor to be with you all.

So we have an audience that's obviously passionate about sustainability, and I know how important it is to you. So we'll spend the majority of time speaking about that. But I thought we could start off just touching on business fundamentals. So John, if you can just give us an overview of the business, your key strategic priorities and how sustainability fits into those?

Yes. It's -- so Ball has been around 140 years. We've been in nearly 50 different businesses. And most of those businesses, but not all, have been somewhere in the packaging realm. We've been in glass. We've been in plastic, and we've been in tinplate and we're in aluminum. Currently, about 85-or-so percent, a little bit less, 80% of our business is aluminum beverage cans. Another -- and that's a global business. Another 5% is aluminum aerosol containers for everything from hair spray to body sprays to even suntan lotions and other things like that. And then we also have an aerospace business, which happy to talk about, it's our oldest business. We do a lot of things for NASA and NOAA in weather and climate and other things like that. But my point in saying all that is that many people in today's environment are trying to figure out whether or not sustainability is a nice to have or a business imperative. And I think I can tell you, on behalf of Ball Corporation, our strategy is inextricably tied to sustainability. We're all in. We made the biggest acquisition in our history in 2016 with the acquisition of Rexam PLC with a simple goal. With -- that's part only the biggest part of our business, and we wanted to make the aluminum beverage can the most sustainable package in the beverage supply chain. And so if there's one thing you get away from this today is that recognize that everything at Ball Corporation that we're doing on the packaging side of the business is trying to position our aluminum products as the most sustainable package in the supply chain. From an economic point of view, from a social point of view, but most importantly, from an environmental point of view because that's where the world is going. And if we learn nothing else in terms of this COVID, is that the sensitivity of the world on how humans are interacting with the world and the importance of us to take that very seriously as we go forward. And so happy to talk much more about that, but that, at the end of the day, is what we're trying to do.

Great. That's a very good introduction. And maybe just to first start off with your beverage can business. There's been a real shift in trends overall. It's historically been more of a low single-digit growth industry. And now you expect growth to be in that 4% to 6% range over the next several years. We also saw the first quarter North American can industry volumes coming in at 8%, which was the highest we've seen quite some time. Can you just give us a sense of what's caused the shift in growth?

Yes. First and foremost, what's causing the shift in growth is the consumer and the consumer preferences. And many people think that a lot of this growth that we're seeing -- and by the way, all the numbers you threw out, we -- that's part of our long-term view as well. But it's not necessarily because of conversions today from existing PET products to beverage cans. In fact, most of it's coming from growth of new products. Here in the United States, nearly 2/3, 67% of all new beverage SKUs in North America last year in 2019 were in aluminum beverage cans. That's up from 1/3 not 3, 4 years ago. So that's where all the incremental growth is. I could give you some small pockets of existing products going from PET into aluminum beverage cans. But I think that really hasn't been the trend to-date. We do think as we go forward, we think about the water market, where it's such a huge market and it's such a bifurcated market, too. On one extreme, you can buy those very cheap, 24 packs of plastic bottles for $2.99 or even cheaper at times. And then you -- at the same time, you go and buy a 20-ounce bottle of water for $5. So there's everything in between. But we think there's huge conversion opportunity there. But I do think at the end of the day, it's being driven by the consumer who's woken up and realized that we're damaging our planet in a way that we haven't done -- thought about it before. Circularity is real important. So this old concept of take, make, waste doesn't work anymore. Yes, we can make cheap products to produce, but they are real expensive to recycle and the environmental costs are borne by us, by society. So we need to change that paradigm, and that's where the aluminum can comes in because 75% of all aluminum ever produced in the history of mankind is still in use today because of its infinite recyclability. Like Jessica mentioned, 9% of all plastic ever produced by mankind has ever been recycled once. And actually, most of that has actually been down cycle, so it ultimately ends up in landfill. That's not a sustainable proposition.

Right. And currently -- I mean how have your operations been doing with COVID 19? What steps have you taken to ensure safety of your workers? And can you just talk maybe a little bit about the latest demand trend you're seeing? I know, in particular, Brazil is a region that's been probably a little bit more affected given higher on-premise consumption. So if you can just maybe walk us through current demand trends and how you've been doing over there that would be helpful.

Yes. Thanks for asking. First, our folks -- we often talk about -- hats off to the first responders and without question our own people. All of our businesses were deemed essential businesses. So we've been running nonstop through this. And I'm very happy to report that for a company that has over 19,000 employees, we've had less than 20, 25 cases, none of which were -- we believe were contracted in the workplace. For those of you who have seen our beverage can manufacturing facilities, social distancing is part of the DNA. Our smallest facility is probably the size of a football pitch. And our biggest one is probably 4x that size, with the smallest one, the size of a football pitch, at any given time, we'll probably about 40 people working in there. So by definition, social distancing does occur. We've been, obviously, changing our protocols, and we've had a global task team working since I think it was the 5th or the 7th of March really to get going on this thing. So touchwood, other than a couple of areas where we are mandated by the government to shut down, India was one of them, we have been running nonstop. Now as it gets to the demand that you were just talking about, let me lay out some context, so you guys can understand this. When you think about the aluminum beverage can, every region is a bit different. In North America, 80% of all beverage cans consumed are consumed off-premise. They're consumed in the home. They're consumed at the beaches, et cetera. So you could only imagine in this environment is our can demand is higher than we can keep up with this, a short answer. We came in with a relative -- because of the growth very high aspirations in terms of CapEx in North America, high aspirations in terms of these new products that we're talking about and then COVID hit, so all the growth is on top of that. So every can made is a can sold right now. And we are probably under -- not probably -- I know we are underserving the market just because we can't make enough cans to fulfill all the demand right now. Now we're spending a bunch of money to put another 6 billion or 8 billion cans of capacity in the North American market. We haven't slowed that down at all, but that's kind of where we are right now. Let me go to the other extreme, which is Brazil -- South America, but Brazil, in particular. Most of the cans, about 60%, 65% of all cans purchased there are more in the on-the-go channels, the small, little grocery stores, what we would describe in North America as convenience stores. Those were shut down by the government of Brazil. And so we saw in the last half of March, 60-plus percent daily year-over-year can declines, not because the consumer didn't want it, but because the channels through which those cans are sold were completely shut down. Now that -- it's, what, approximately 1.5 months later than that we've seen much better trends as each week goes on and it begins to open up. But it is -- it just points to the volatility, not to the demand of the product, but the channels by which it's distributed. And so it is coming back. And we've -- last couple of weeks, we've seen some nice improvement. But that's the other extreme that's very different than North America. Europe is a bit of both. And what I mean by that, for the more what I'd describe as established markets where cans play a heavy component in the beer sector or the take-home is more important, like the U.K. Germany is a bit like that, believe it or not. The actual can has been performing quite well, particularly on the beer side, less so on the CSD side because other countries like Southern Europe, where tourism is such an important part, CSD has been hit pretty hard down there. Largely because the consumption of that as you are touring in Italy or you're on the Mediterranean, you go to a kiosk and buy a can of your favorite soda, that has been completely shut down. So we've seen some big declines in that area. It has been coming back. And I think in all 3 of the areas, we're seeing -- particularly in South America and Europe, we're seeing better improved trends than we saw at the end of the first quarter, but still down year-over-year.

Yes. It sounds like a lot of moving pieces, but good at least that it's coming in the right direction.

Yes.

So maybe we can transition a bit to sustainability now. And that's obviously a topic I know you're very passionate on. So I know you've been pretty instrumental, not only promoting the circularity of aluminum packaging, but also commercializing it at Ball. Can you just give us a sense of the initiatives you've pursued in order to do that? And how the company is structured around sustainability?

Yes. Well, in a few weeks here at the end of June, we're going to be putting out, I think, our 7th sustainability report, either 6 or 7. But we always talk within the walls of Ball about we've been sustainable for 140 years. We just didn't call it that. We talked about -- you want to talk about environmental sustainability, we called it energy reduction or VOC reduction. You talk about social sustainability. Well, Ball State University was actually bought by the Ball family to make sure that there was a commuter school available for the people, including the workers in Muncie, Indiana. That's about giving back to communities in which we live and operate. And then the last, the economic one, is we're an EVA company, which I think ties directly to, if you're not making economic returns over the long-term, you're not economically sustainable. I mentioned that because it's part of our DNA. And I think it's real important to understand that. I do think that, strategically, with the various things we've been doing is we've been -- for over a decade now we've had a Sustainability Steering Committee, I head it up, that focuses on what of those things that we can be doing. In the early days, it was about energy reduction. It was about water reduction. But as we march through that, even 5, 10 years ago, we realized that there's a far greater opportunity, and it's part of our purpose, if you will. And so we very much have been focused on, even from a portfolio perspective, making sure our portfolio is what we describe as we can look in the mirror and say, yes, we are a sustainable business. We were in the plastic bottle business. We got out of that in 2011 because you could see that there is a tsunami coming, that this was not a sustainable product, and we woke up to say, what are we doing here? We're talking out of both sides of our mouth. So that's 1 of the proof points that I could give. More recently, whether it's the ASI Certification for all of our plants in Europe, and we have plans to have all of our global plants done, to let the consumer and let the retailers and let our customer know that a can produced by Ball is certified as sustainable. And I think that's really important. You think about the Science Based Target initiative that the world has gone out, and we recently put out targets to achieve 1.5-degree Celsius, targets around how to do that, which ultimately leads to approximately 55% reduction in absolute CO2. Since that time, we've announced several alternative power agreements in North America. You're probably going to see some in Europe as we go forward as well. We've been working with our supply chain. So there's a whole host of things we've been doing. Because as I said, you should assume that every press release you really -- you read from Ball about what Ball is doing is ultimately tied to this sustainable initiative.

That's helpful. And I know, like earlier, you were mentioning that most of the growth so far in beverage cans has been from new introductions rather than outright substrate switching. But obviously, a big part of the demand story is switching from plastic and glass to aluminum. So I was wondering if you can just maybe touch on some of the properties that you think allows aluminum to be the preferred substrate. And can you just talk about what conversions can add in terms of demand growth? Which beverage categories you see the opportunity going forward?

Yes, happy to. That's -- really, we think the reason why is because in the sustainable world, people are looking for sustainable alternatives. And the critics out there will say, well, because of aluminum has a lot of energy use on the primary side, its LCA footprint has to be worse than PET. And the truth is that's not true at all. Because of the recycling -- in a theoretical world, where you have zero recycling, I would agree with you. There's more energy to produce virgin aluminum than there it is to produce virgin PET. But then when you put reality into it, we're 69% of all cans around the world, and we're only 50% here in the United States. 69% of all cans around the world are recycled today. Those are the facts. Those aren't theory. Those are the facts. When you put that into the equation and show what the amount of PET is, you will see that the cans are very competitive from an LCA footprint perspective. And equally important, for every 1% increase of recycling on aluminum or PET, the can shines even better relative to PET. So as we go forward, the can is the most sustainable from an environmental footprint perspective. And that's why we think consumers ultimately are going to be voting with their pocketbooks because, as I said before, in today's world, historically, we've been focused as a society on making very cheap products. And they are -- but cheap to manufacture but not inexpensive to recycle. The can is both. And that's the important thing here. So I think that's very important. I'm sorry, Neel, you had a second question which I've...

Yes. The second question was just more about what conversions to beverage cans in terms of the demand growth?

Yes. So we did an analysis about 15, 18 months ago, looked at all the regions in which we currently produce. And on average, the can represents about 23% of all beverage packaging in those regions in which we operate. So North America, South America, Europe, primarily, a little bit of Southeast Asia, a 1 percentage point shift of that. So for cans going from a 23% share to a 24% share, that's not a big leap of faith when you think about it. A 1 percentage point shift creates 19 billion can conversion opportunity for us. So for a company that produces approximately 105 billion cans, that's close to 15%, 20% growth right there without just a 1 percentage point shift. Now what we're seeing in some areas is actually an increase in that shift. Because of, as I said, new products in North America, and you think about the spiked seltzer market. Now that now commands 10% of the total beer marketplace, and it's almost exclusively cans. I could go into iced coffee. You can see the emerging trends in wine. You are going to see the emerging trends in water. Obviously, we've already seen it [ are clean ]. I strongly believe -- in fact, I know up in your offices. When you go to your cafeterias, you can buy still water in cans. I've seen it and have actually bought one of them in our cafeteria in New York City. So it's going to be coming. I think COVID has slowed that down a little bit just because from a retailer perspective they're trying to make sure that they have the essentials on the shelves. And so all new innovations has kind of slowed down a little bit. But I can tell you, based on the pipeline we see, it's not all far-fetched to see the can as a share of the total beverage market continue to move up as time goes on.

And you mentioned the -- earlier the superior -- quite right there the recycling for aluminum. The U.S. market, I know, actually has about a 50% recycling rate and the rest of the world is closer to 70%. What do you think needs to be done for the U.S. to be able to close this gap versus the rest of the world?

Well, it's a great question, and we're going to -- hopefully, we're going to hit it head on in our upcoming sustainability report. Because if you want to -- on the surface, we can talk about collection, and we can talk about the changing consumer habits about being on the go and the lack of appropriate receptacles to capture that when you're in the 7-Eleven. And that's fine, and that's important, but that's not a root cause. The reality is our recycling infrastructure. Most of the waste dumps, if you want to call it that, in the United States, are owned or controlled by municipalities. They don't have the capital to modernize or recapitalize those. And they also -- there are offtake agreements, meaning from where it ultimately goes to landfill are with companies, the big waste haulers. Their agreements typically have been in place for 30, 40, 50 years, and they were historically based when sustainability wasn't important. So the economics are tied to the amount of tons that they're moving. So until we address the issue of the point of contact, the place where the litter is collected, whether it's at the grocery store, the retail store, but then ultimately to the places where it's separated, unless we can talk about modernizing that and then talk about with the waste haulers about giving them the appropriate incentives to make sure that they're separating it, I think it's going to be a very tough challenge to operate. And I say that with the knowledge of where it is successful, and I think of Germany and I think of the Nordic regions. I even think of Brazil. One of those 2 issues is going on. Either the government, usually at the federal level, is making sure that the modern technology is in place for separation once it comes into a central depository. And then secondarily, from a collection point of view and from an economic point of view, I think about the whole cottage industry down in Brazil that has made to separate aluminum cans because there's economic incentives to do that for them. Until we address those 2 issues, I think it's going to be difficult to move it meaningfully.

And in terms of just how COVID-19 kind of impacts the overall sustainability narrative, we're often getting asked this question by investors. I was wondering what your view on this is. What's the latest you've been hearing from customers, retailers, NGOs?

What we're hearing is that there's a short-term and long-term issue here. I think in the short term, people are just trying to absorb and try and figure out where short-term demand is going and what that all means. And we haven't seen any kind of meaningful. As I said, it depends by region. I can tell you in North America, if you look at data, it would suggest that it's more meaningful because the can has been taking off relative to PET. But I think that's a bit unrealistic just because the can outweighs in the affluent channel relative to PET. I do know that on the soft drink side, people are promoting less to their PET. Having said that, in Europe, the opposite is true. You are seeing more PET being pushed in the short term. What we've been hearing from retailers and our customers, but more importantly, consumers around the aluminum cup, which I think it's important to get back to because we've been doing a lot of research about this during this COVID time. What we're clearly seeing is no change whatsoever in terms of consumers and retailers perceptions, the importance of this. In fact, even a little uptick about this whole COVID has woken us up yet again that we are destroying our planet, if we're not careful. And so what are we doing about it? I think it's far greater than the antiplastic rhetoric. I think it has a lot more to do with just society in general. But I think there's an uptick to it.

Yes. I mean so far, we've talked mainly about beverage cans, but just wanted to touch on some of your other businesses. So aerospace, how does that exactly fit into the company's strategy as well as messaging around sustainability?

Yes. Well, as I mentioned early on, our aerospace business is a very different business, and it's actually the oldest business in our portfolio because of our long heritage. But what people, I think, don't appreciate enough is we've been focused on sustainability in that for decades. We are -- through NASA and NOAA, we've been known as the weather satellite company. And I just think over the last decade or so, you think about -- even recently, we've been working with the Environmental Defense Fund on MethaneSAT, which is a sensor, has the ability both wide breadth and narrow with being able to look at methane emissions; I think about GEMS, which was Geostationary Environmental Monitoring Spectrometer that we launched, I think, within the past year; I think of our Ozone Mapping and Profiler Suite that we were launched a few years ago; all the Landsat data, satellites we've been doing, gosh, for 20 or 30 years; and then last but not least, the OLI, which is the Operational Land Imager. All of those things go to helping our government and helping NGOs measure how we as human beings are impacting our planet and the implications thereof from a science perspective and a weather perspective. And so our heritage is actually in this, and it's core to who we are.

And you referenced earlier the aluminum cup, which, as a plant, I believe, is going to be complete later this year in a new product you're rolling out. Can you just touch on this product a bit? And what kind of benefits does it offer over red solo cups? How big is that market opportunity?

Yes. We're pretty excited about it, Neel. It's -- so by background, this really is all about sustainability. And as we were putting our shoulder into a number of years ago on the aluminum beverage can, we looked at other areas in which we had a similar opportunity, and the cup business is a very big cup business. For example, here in the United States alone, the addressable market for what we're doing is probably about $15-plus billion, and it's another probably $15 billion, if not more, throughout the world. And when I say addressable market, I'm thinking about everything from sports stadiums, to college campuses, to music festivals, but then also into the retail space. So only kind of tell you what our strategy has been, how it's modified relative to COVID and where we're going on this. We launched it, gosh, I guess, a little over a year ago, a little under a year ago formally at the University of Colorado. Now by background, we have very limited production capability. We can make about 3 million cups per year. So that's not a lot when you think about we make 105 billion aluminum beverage cans a year. So we knew all along that we would need to stand up a manufacturing facility with new technology, but let's go step-by-step, and that's what you're referring to. We're building a new plant in Rome, Georgia. It's initially going to have about 0.5 billion cups, expandable to a couple billion cups as we go forward. And we're already talking about where is plant #2 and plant #3 going to be. So by the -- going into 2021, we will have production capability with the ability to match. And of that -- by the way, of that $15-or-so billion in the United States, that addressable market, about $6 billion of it is in food service, which is the sports venues and other, but it's also quick serve retail and other things like that. But $9 billion of it is in the retail side. And the reason why I say that is, from a marketing perspective, our plans all along were given that we have limited production capability, we were going to try and create awareness very early on. So that's why we focused on very high traffic, high visibility sports areas. That's why it was at the Super Bowl. That's why it was at the Waste Management PGA Golf Tournament down at Phoenix. That's why it was at some of the Power Five college football. That is why it's been at the NBA, the NHL, even the University of North Carolina Basketball. We had limited production capability, but we could use this as a peak privilege to really focus on those things, and that's exactly what we've been doing. The ultimate plan, though, was to go to retail and we had plans as we kind of went through 2020 that we would stand up a retail sales and marketing team with a goal towards, call it, second half of 2021. So the production capability of this new plant would be up at the beginning of '21. We'd be able to try it out. We continue to do many of these sports events and music festivals. But then coming late '21, we would have full capability supplying retail. Retail on one extreme is amazon.com. The other extreme is a small independent grocery stores and drugstores and then Walmart's in the middle of it, Costco's in there and Kroger and all the others is in between. So that's the whole suite of it. What has happened is as we all know sports venues have kind of shut down. We still have very good conversations with them, but what we used it as an opportunity to do was accelerate our retail presence. And we actually accelerated the hiring. And so you saw, I think it was last week or 2 weeks ago, we announced a distribution agreement with Acosta, which is one of the biggest distributors to grocery -- to independent grocery and others. We've been having discussions with the Amazons, with Walmarts, with the Krogers, with H-E-Bs, with the -- many other drugstores. I could go on and on. And so you should expect that we're moving that up by about 6 months or so. And part of it was driven by a lot of research we've been doing through this COVID. A couple of data points. We've been looking at price elasticity in the retail market of someone the willingness to pay. And we've been pleasantly surprised about people's flexibility to say, the cost a dime more than a red solo cup, with the elasticity or inelasticities very conducive to saying there's some pricing power here. But equally important, we also did a test. We didn't even advertise this. In fact, if you go to ball.com right now, and click on aluminum cups, you can buy 5 cups for $5 right now. We did it as a test trial to -- without promoting it whatsoever. And at one point in time, we had to shut down the site because the demand was so strong for that. So we've been doing a bunch of different work around that. So long story short, you should expect as we go into 2021, not only will we continue to work on the food service, the sports venues, et cetera, we're going to be accelerating the retail presence as well.

Great. That's a helpful review. And then maybe we can just transition to Q&A for -- we have a few minutes left and there's a couple of questions that came in. First one, do you see a threat to your business from reusable products? Comment is that maybe reusable could be more sustainable than aluminum can recycling. So any comment?

It depends. In fact, in our aluminum aerosol business, we've actually come out with a reusable container for shampoos and others. It's aluminum. Do I see reusable in the beverage space, which is, I think, really the question? No, I don't. Because we've been there, done that. And as a society, we've gotten out of it. I think when you think about the cost of the return system in terms of 2 way glass, for example, you don't see it anywhere other than in certain European countries where it's declining and then in South America, particularly in Brazil, where it's been declining real quickly. A lot of it has to do with the washing and the transportation that even though it's being reused, you're chewing up the environmental credentials by water usage as well as transportation, greenhouse gas emissions, other things like that. Then you layer on the sanitization, particularly in a COVID world, and we just don't think that's going to be coming back.

The next question I have here is, what role do you see Ball having in driving recycling rates higher aluminum just to further improve aluminum circular economy benefits?

Well, it's a great question. It's a great strategic question and one that we talk about a lot internally because right now, we do not directly play a role in recycling. We influence it, and we're involved with a variety of different associations to help promote recycling. But at the end of the day, we're not part of the collection system, and then we're not part of the remelt system. We have looked at that. Our aerospace business, we have a lot of capability and technology. It's not that far of a stretch to take [ any occurrence ] and reinvest in many of these municipalities. And we've looked at that, too. The problem is -- when I say municipalities, I mean these waste collection areas, the proverbial dumps. Problem is there's 33,000 of them around the United States. And so it's very difficult to get your arms turned. Yes, you can look from the big urban areas. But really where the opportunity is more in the rural areas where there's less done because they just don't have the recycling infrastructure. And so from a lobbying perspective, we've been talking with the federal government largely because, again, to go after all 50 states is too hard. We did a very good job, in my opinion, of promoting solar through use of incentives. Why can't we do something like that on the recycling side of the business and give people a reason to reinvest in areas where education and essential services over the last 20, 30 years have been more important than recycling, at least viewed by the municipalities. So that's where we're spending our time to try and focus on where we can add more leverage, where we can add more direct influence into the issue.

There's a few more questions that came in, but we're actually just out of time. So maybe we'll get back to these questions following this session. So I think we can probably end there just to be respectful of the next session. Thanks again very much for your time, John. Just a reminder, the next session will be with Boston Properties. It will start at 8:50 a.m. And to observe that webcast, you can just click on the link on the Sustainable Futures website. Thanks again, everybody.

Okay. Thank you.