Novelis Inc. has signed a new long-term contract to supply Coca-Cola's authorized North American bottlers with aluminum can sheet for Coca-Cola's brands. This includes supply from Novelis' plant in Bay Minette, Alabama, which is currently under construction and expected to begin commissioning in 2025. Under the agreement, The Coca-Cola North American bottlers, through the CCBSS and Novelis agreement, have committed to purchasing a confidential volume of aluminum can sheet over a multi-year period.
"This new long-term contract builds on a decades-long relationship between Novelis and the Coca-Cola system, and further strengthens Novelis' position as the leading provider of aluminum for beverage cans," said Steve Fisher, President and CEO of Novelis. "This contract validates our investment in expanding rolling and recycling capacity in North America and solidifies a strong future for sustainable aluminum as the beverage packaging material of choice."
The contract includes an agreement for closed-loop recycling. Through closed-loop recycling programs, Novelis directly takes back the manufacturing scrap generated during the can making process, recycles it, and converts it into new can sheet, which is then made into new beverage cans. In addition to this continuous loop, Novelis recycles more than 80 billion used beverage cans per year into aluminum for beverage packaging. These efforts result in lower-carbon products, as recycling aluminum is approximately 95 percent less energy intensive than making primary aluminum.
Novelis expects demand for aluminum beverage can sheet to grow at a three percent compounded annual growth rate from 2022 to 2031. The demand growth is driven by consumer preference for more sustainable products and size variety, as well as more beverage types being packed in cans, including water, energy drinks, soda, beer, wine, hard seltzers, and ready-to-drink cocktails.
"The evolving role on behalf of The Coca-Cola Company and our bottlers is to build a resilient domestic supply chain, thus enabling sustainable long-term growth," says Dan Coe, chief procurement officer of The Coca-Cola Company.
The majority of the Bay Minette plant's capacity for beverage can is already contracted.
Novelis says that its new, low-carbon facility in Bay Minette will be the first fully integrated aluminum manufacturing and recycling plant built in the U.S. in nearly 40 years. The facility has an initial capacity of 600,000 tons of finished goods for the North American can and automotive markets.
