Supply Chain Shakeup   //   January 2, 2024

Inside Ball’s plans to introduce aluminum cups to stadiums and arenas

Ball Corporation is aiming to expand its aluminum cups business from stadiums to food service and hospitality venues, signaling a rise in the corporate interest in alternatives to single-use plastic. But for now, the transition requires more widespread adoption to become economically viable.

Since 2019, Ball has produced aluminum cups that debuted in a stadium setting, expanding beyond its core business of packaging. Meant to be sturdier than plastic, the cups can be rinsed and re-used and recycled. Ball has rolled out the business to venues including its own Ball Arena in Denver, as well as Red Rocks Amphitheater and SoFi Stadium. Ball has also expanded the line to five different sizes from nine to 24 ounces, and made the cups available for sale on Amazon and in about 35,000 U.S. retail locations. 

Emily Fong Mitchell, president and general manager of Ball Aluminum Cups, said the next steps in the growth of the business will be reaching out to food service and hospitality venues, such as a ski resort in Colorado. The goal is to introduce an alternative to single-use plastic that can be used at scale.

The cups business is treated like a startup within the 140-year-old company, Fong Mitchell said, and has continued to grow year-over-year. About three to five venues adopt the cups each month, she said. “We see that in the number of new customers that we’re signing up, whether those a revenues or consumers in places like Amazon and e-commerce.”

Founded in 1880, Ball creates aluminum packing, like cans and aerosols, for consumer packaged goods. It claims it has a 37% market share on beverage packing in the U.S., 39% in Europe, Middle East and Africa, and 46% in South America. It also produces aluminum for aerospace technologies, and while once known for its branded glass mason jars, it exited the glass business in 1996.

Since 2000, Ball has increasingly turned its focus to sustainability and positions its aluminum business as a way to help encourage the use of more environmentally-friendly materials. In 2022, about 87% of Ball’s revenue, or $13.37 billion, came from aluminum packaging.

Ball’s cups business is one example of a major corporation making moves to replace single-use plastic in food and beverage. The Environmental Protection Agency reported just 8.7% of plastic was recycled in 2018, and companies are experimenting with alternatives to keep plastic out of waste streams. Canadian restaurant chain A&W recently rolled out a reusable cup program. Starbucks is also testing out a strategy to move away from disposable cups, which includes encouraging customers to bring thier own or putting out reusable ones that are collected. And on the product side, startups like Repurpose and major retailers like Walmart are coming up with ways to create compostable flatware.

But these efforts can be expensive to implement, and sometimes require a change in behavior that is slow to take.

For Ball Corporation, the cups business is part of the non reportables, meaning exact sales figures aren’t available. But on the company’s second-quarter earnings call, CEO Daniel Fisher has said he expects the business to grow “in the $10 million range.” He cited proposed regulatory bans on single use plastic and potential growth from stadium deals as opportunities for growth. In the third quarter, he laid out how the business will break even.

“You need the big inflection point to come out of food service,” Fisher said. “We’re bullish on the conversations, but a couple of those transactions and wins need to happen for us to really inflect toward break even. We’re doing better this year than last. We’ll do better next year. I need for one or two significant wins for us to get back to break even. But it’s not that far away. But until you execute that trade, it’s not in the near term.”

Increased demand

Fong Mitchell told Modern Retail that getting stadiums and venues to start selling the cups is often an inbound transaction. The business may be looking for a way to help reduce its carbon footprint for broader business reasons.

And while the cups come with a higher price tag for the venues, they can be mitigated by advertising opportunities to get sponsors on the cups. Some can also get their costs offsets based on any recycling credits they get from the waste hauler. Others might build it into the cost of the cup — which consumers may not notice in the already inflated prices for venues.

“You’re already paying $15 for a beer,” Fong Mitchell said. “When you get it, you can have it in a flimsy plastic cup, versus a branded aluminum cup that has a QR code that has an opportunity to engage with content. It really is a much more premium experience.” 

She also said that demand for these products is likely to rise as Gen Z begins to wield more spending power. Younger shoppers, she said, are more likely to say “‘I will choose the sustainable product as long as the product performance is still good, as long as it’s still convenient for me,’ and that’s what we’re looking to provide with our product.”

Sustainability economics

Crystal Dreisbach, CEO at Upstream, a nonprofit that advocates for shifting to reuse, said the idea of swapping out single-use items in venue settings is becoming a key way to make the broader switch to reusables because of how many people they serve. 

“Stadiums have the advantage of having high volume, which is how you make the economics work with reusable,” she said. 

Yet making items out of aluminum is only environmentally beneficial if those items wind up getting recycled, she said. In this case that requires the user to get the cup in the right receptacle, and having a system to collect and recycle.” Unless you’re absolutely ensuring a closed loop system,” recyclable materials can give a false perception that something is environmentally sound, Dreisbach said.

For Ball’s part, Fong Mitchell said that individual customers may rinse and reuse the aluminum cups, while the venues that use the cups can come up with different ways to encourage recycling. At Ball Arena, for example, site staff carried backpacks to help collect recyclable items from fans, who could also enter to win a gift card when using aluminum recycling machines.

Upstream’s Dreisbach said she urges for-profit enterprises claiming to come up with sustainable alternatives to show evidence that their systems have less of an impact than making a switch to something that can actually be reused.

“The economic model of selling something over and over and over again like disposables is a very different model than buying something one time then washing it again and again and again,” Dreisbach said. “Capitalism is based on ‘make, sell, make, sell’… that is very much aligned around disposable or single-use mode of operation.”

Fong Mitchell said that Ball will work with the stadiums and venues that use the recyclable cups to help determine where to place recycle bins, or what kind of signage helps encourage recycling. This helps ensure the cups get recycled — and so do arrangements for offset credits with the waste haulers. The cups themselves are also made with 90% of recycled content, and the factory in Georgia that makes the cups is powered by a dual gas and electric oven in a bid to cut down emissions. The company also said it is pushing toward closed-loop recycle with a goal to see a global recycling rate of 90% for cups, bottles and aluminum.

Fong Mitchell said that partnering with stadiums and event venues that are popular can help shift overall behaviors as visitors notice the cups and decide to purchase them for their own individual use. The most popular sales for the cups on Amazon are bulk packages, she said, with small businesses adopting them for their own use.

“The trend is there,” she said.