Dive Brief:
- Ball Corp. announced Friday that it’s forming a joint venture with Ayna.AI, an industrial technology advisory and implementation firm, to take over the packaging company’s aluminum cups business. Ball is the minority investor in the 49-51 joint venture, called Oasis Venture Holdings.
- All of Ball’s aluminum cups business assets will comprise Oasis, including its commercial, supply chain and manufacturing teams and the plant in Rome, Georgia, which will be Oasis’ headquarters.
- Ayna and Ball intend to work collaboratively to expand the customer base for the aluminum cups, which Ball introduced in 2019. The changes will not affect current orders for the product, Ball said in a news release.
Dive Insight:
Ball executives announced on the company’s most recent earnings call, on Feb. 4, that it would likely pursue alternative options for the aluminum cups business, such as a strategic partnership. They expected this to result in a deconsolidation of the business starting in the first quarter of 2025.
Executives confirmed that the segment had been underperforming and didn’t achieve the initially anticipated growth — previously reporting a $40 million drag on annual earnings. CFO Howard Yu said on the February call that after the transaction closed, Ball anticipated a $25 million year-over-year improvement in 2025.
“The team has been working diligently to start up this business and position it to meet the need for more sustainable packaging choices, and we're excited about the many opportunities ahead," said Jay Billings, senior vice president and president of growth ventures at Ball, in a statement.
When Ball debuted the aluminum cups in 2019, it reported developing the option “in response to growing consumer preference for more sustainable products.” The cups were designed for use at large event venues, such as sports stadiums, and for recycling or refill after use. The COVID-19 pandemic interrupted momentum when events were canceled en masse, prompting Ball to refocus the program to include an eye toward hospitality, fast-casual food service and international markets. As of December 2023, the aluminum cups segment was “still in startup mode,” according to the president of the cups business.
Ayna’s website says the company provides “end-to-end transformation” that helps companies “change the direction of your business to achieve extraordinary results.” The business, launched by former employees at firms including McKinsey & Co., also cites a case study for Ayna’s work with an unnamed packaging equipment company.
The new joint venture’s partners believe Ayna will be able to unlock new growth and innovation opportunities for the metal cups.
“We firmly believe in the long-term potential of the aluminum cup to redefine the market's approach to single-use products and recycling, all while delivering a premium experience for consumers,” said Nick Santhanam, chairman at Ayna, in a statement. “We see significant opportunities to strengthen connections with existing customers and suppliers, expand awareness and adoption of the Cup and enhance its value proposition across all key verticals."
Ball touts its “long track record of creating successful joint ventures for financial and category growth,” including for Ball Metalpack. The company sold that to Sonoco in 2022, driving the latter company’s recent push for a greater focus on metal packaging.
