After completing a recapitalization six months ago, lowering debt and bringing in new leadership, Ardagh Group is taking a hard look at demand challenges in glass and charting a refined path forward. The company’s glass business announced a new commercial and operational improvement strategy this month dubbed Clearly Ardagh.
The initiative is more focused on operational efficiencies — where some 90% of costs are concentrated — than on corporate changes, said Mark Porto, the recently installed executive chairman of Ardagh Group, and Brian Brandstatter, president and CEO of Ardagh Glass Packaging-North America, in an interview.
“How do you impact the day-to-day operations to make bottles more effectively?” Brandstatter said. “We win and lose with the people out on the factory floors, our commercial people out in the market, our supply chain people. So it's all about how we galvanize people towards a common goal.”
There were multiple changes in the broader glass market that led to the Clearly Ardagh reset. “The obvious one is a decline in volume” in glass – resulting from lower demand and higher input costs, Porto said. Glass production is highly energy-intensive relative to other substrates, said Porto, who has a background in industrial businesses but is newer to the world of packaging.
The high fixed-cost nature of glass production means volumes are king. “We do look at utilization levels in our production facilities, so that's number one. Number two is the volatility in the changes in input costs, which is principally energy,” Porto said.
Changing markets
Many of the challenges that Ardagh is tackling head on today trace back to the COVID-19 pandemic, though demand appeared to stabilize a bit in 2025, Brandstatter said.
In North America in particular, glass packaging was “a relatively stable market prior to COVID, and then COVID hit and the market changed dramatically,” Brandstatter said.
Customer segments have also shifted. “Mega-beers have been dropping on a continual basis, 5-8% on a year over year,” following a significant spike in demand during the COVID years as customers and consumers built inventories, he said.
That prompted Ardagh to build inventory, “thinking the growth was going to go on forever, and then all of a sudden things changed, the world opens back up, and people start saying, ‘Well, I've got too much inventory,’ and we see significant declines,” Brandstatter said. In North America, “we've been trying to reach a new normal, if you will, from a demand perspective.”
While strategic network evolution has been going on for about five years now, the company is still seeking a better balance going forward.
When Ardagh references network evolution as part of the Clearly Ardagh program, “what we're talking about is really carefully thinking about what facilities are online — not just the furnaces, but also the back-end production — and also how we allocate products to individual facilities, and where we produce product,” he said. “That is an operational problem that we are intensely focused on.”
In the U.S., Ardagh currently lists nine glass facilities. This is after multiple footprint changes the last few years. “We've seen softness in the wine industry, as an example, and unfortunately we had to shut our Seattle facility down with increased pressures from imports and those type of things,” Brandstatter said.
“So you're always balancing where demand goes, where you see demand going long term,” Brandstatter said. “We've also invested in our footprint to make us more flexible and capable to take advantage of market opportunities.”
“Smaller doesn't necessarily mean less profitable,” he noted. Ardagh reported year-over-year increases in profits in the first quarter of 2026.
Brandstatter did not have comment on specific imminently planned changes to the North American network. But he said lessons from the last five years inform how it evaluates new opportunities and where it could have competitive advantage. “I think we're much more sophisticated when we start talking about contractual opportunities and new business opportunities, and why we can be successful with those,” he said.
Improving contracts and forecasting
As part of the optimization strategy, competing on price and succeeding in the market requires close attention to basics. This includes quality defect rates, yields, unit costs in procuring raw materials, inventories, how it staffs and schedules, and more, Porto explained.
“We're an operations-intensive business, and we’re producing billions of units, and so we have to be intensely focused on how we operate to ensure that there are no sources of waste,” he said.
Brandstatter said Ardagh Glass has been “dabbling” in AI, including for quality inspection as well as improving forecast accuracy — something for which the glass industry is “notoriously poor,” he said.
Ardagh’s glass business is rooted in long-term supply agreements; that could be three years, 10 years, or something in between. “I would say the contracting process has been relatively archaic,” he said, but the company is seeking “a “more holistic” and mutually beneficial approach going forward.
“Obviously there's an emphasis on unit price, but there are a lot of other things that create exposure,” Porto said. “We've got a very comprehensive underwriting process now that we're really developing and spending a lot of time on that adds more rigor to the economic modeling that goes into our contract and discussions with customers.”
Brandstatter offered an example of where these opportunities can pay off. He noted work with spirits brands, “small-format stuff that maybe they were importing and we were able to provide it more locally,” he said.
“There are those pockets of opportunities,” he said. “It's just finding them and making sure that we can effectively deliver to the customer at a price that makes sense for them and a margin of return that makes sense for us.”
