Now having said that, that’s one area. So the — economically, the market is down. I think everybody in the steel aerosol can market is down. And I would expect that the one other company that you will talk to will probably tell you the same. There’s also a slight move for some products from steel aerosol to aluminum aerosol. Historically, that’s been more of, let’s say, women’s products and, let’s say, suntan lotions. Slowly, some of the other products are moving from steel to aluminum. But that’s a slow move. It’s more economic-related now than anything else.
Anthony Pettinari: Okay. That’s very helpful. I’ll turn it over.
Timothy Donahue: Thank you.
Operator: Thank you. Our next question is from Ghansham Panjabi from Baird. Your line is open. You may begin.
Ghansham Panjabi: So, I guess, going back to the North American Beverage for 3Q, up 12.6%. Was that in line with your internal plan or was it better? And if so, what drove that? Was it promotional spending, maybe a very hot summer, etc. And then what do you estimate the market itself in North America grew in the third quarter?
Timothy Donahue: So, Ghansham, I would say it was a touch better than what we anticipated. We were — as we sat here in July, nobody believed this when we told you we’re going to be up significantly in Q3. We kind of got a pretty good handle on it. We probably thought 11% to 11.5%. So maybe we’re 1 point or 1.5 points higher than we thought we would be. And that’s just more an increasing promotions by a number of the large carbonated soft drink companies as well as some of the better-known national and regional sparkling water brands. As for the market, we don’t get data anymore from CMI, but I got to believe it feels like at least for domestic producers, we were up a few percent and I guess, if you think about the total market, if you were to include lower imports this year compared to last year, imports are almost nil at this point.
Maybe the market was flattish to up 1%. But for domestic producers, we have to be up a few percent. That would be my guess. I’m purely guessing.
Ghansham Panjabi: Okay. That makes sense. And then you made some constructive comments on supply/demand, again, specific to North America. But there are new players. Your customers are dealing with persistency of inflation. The consumer is resetting purchasing patterns and being much more price conscious, etc. As we kind of think about contract renewals for the industry going forward, should we expect a paradigm where maybe volumes are very lumpy between the different players as contracts come up for renewal? I’m just trying to think this out as it relates to the next couple of years, assuming we have the current operating environment we do over the next two years.
Timothy Donahue: Well, I think we have the current operating environment. Based on capacity installed today, and it doesn’t appear that anybody is putting any more capacity after the Mesquite product — project and perhaps one of the lines still to go into the Midwest by one of the new entrants. It does not — I don’t know of any other capacity going into the market. So based on that installed capacity, and the lack of imports that we’re competing with now, let’s just say that we’re — we’ve got a domestic market now served by the entire domestic manufacturing footprint, and a market in which our customers are promoting cans. They all have sustainability goals and sustainability agendas they promise to meet. They cannot meet their sustainability goals without the can.
So based on that, that’s why I feel that supply/demand currently in pretty good shape and will only get better. Now I can’t talk for everybody, but for the most part, we don’t have any contracts coming due until the end of maybe ’26. So we’re a couple of years out. Now incrementally, if there’s growth and/or volumes outside of existing contracts, then perhaps there’s, as you want to say, a scramble for that growth. But I don’t think there’s any reason — any reason why, as we sit here today, looking out two years, 2.5 years, we should be overly concerned. But anything is possible, Ghansham.
