The company discussed the topic during its Q2 2015 financial results recently where Tony Allott, president/CEO, Silgan Holdings said there is a broader interest among end users to eat more healthy products.
'There is a drive towards what is perceived as healthier foods'
Retailers are reacting to that and they are trying to put things on the shelf that are perceived as being healthier.
“Soup as an example is such a great health product. There is nothing about the can that is detrimental to that fact, and the can is able to deliver that food product at so much lower cost basis than any other package can,” he said.
“There is going to need to be a drive to explain to the consumers the value of soup, which younger consumers don't really understand to work in any kind of package type you can to win that consumer group back in.
“There will be a logical next step to that which is to bring it all back towards canned because that's the lowest cost solution, and that's the best infrastructure for our major customers, but that's going to take some time.
“The short term of that is definitely there is a drive towards what is perceived as healthier foods, but again our customers can right now come out with and do have organic products. There is nothing about their process or their packaging that is any less healthy than what those retailers are asking for on the shelves.”
Northeast Pennsylvania plant will be operational in Q3
Silgan Holdings supplies metal containers in North America and Europe as well as metal, composite and plastic closures for food and beverage products.
Its financial results revealed net sales for the second quarter of 2015 were $914.2m, a decline of $3.1m, as decreases in the closure and plastic container businesses, due partly to the impact of unfavorable foreign currency, were partially offset by increased sales in the metal container business.
Net income for the second quarter was $42.2m, or $0.70 per diluted share, compared to the second quarter of 2014 net income of $44m, or $0.69 per diluted share.
The company is looking toward the opening of its Northeast Pennsylvania plant which will be operational in Q3. A Missouri facility will also open towards the end of the year. The new facilities are, in large part dependent upon equipment moves of existing assets from other facilities so the firm is currently focused on servicing its customers and making sure they get the products they need.
“Soup has been in decline for a period of time. But, it has got an interesting challenge and an interesting opportunity, and we'll have to watch to see how our customers manage their way through that. But I do see the potential for upside in soup,” added Allott.
“It is a great healthy product that is being somewhat ignored on the shelf. And with the right champion on it and the right investment made to get that story out, personally I believe there is an opportunity there. That's a little outside of our control. So right now we're just assuming that will continue the historic path.”