We're ready? All right. Good morning, everybody. For those of you who don't know me, I'm Dan Fisher. I'm the President and CEO of Ball Corporation. I'm very, very happy and excited to have all the folks here joining us in the room. Last time we did this in 2020, there was eight of us sitting around a crummy little conference room table, and there was not as much energy, certainly as we felt last night with the questions and the engagement. Hopefully, that continues today. For those of you that were with us yesterday but, not able to attend, we had a wonderful, session with our aerospace colleagues. Spent about an hour talking about all things astrophysics and how we're going to save the world with our climate technology and defend, all of us here on this planet.
The team did a wonderful job, and the questions were really spirited and it was a really special time. Hopefully you'll find just as much excitement today when we talk about aluminum. It won't be near as sexy, I promise, but we'll talk about how we're gonna make a bunch of money and return a lot of value to our shareholders. I joined Ball Corporation about a dozen years ago, 2010. This is a place that I've fallen in love with. For those of you that I've met and had the time to experience some of my teammates and colleagues here over the last 24 hours, I think you can understand why that is.
It's a group of really passionate people that believes in a 142-year-old company, the foundations that have been set before us. One of the things that I think I enjoy most about this company is everyone feels a sense of obligation to leave behind a company better than the one they inherited. Hopefully, by the end of the day, you'll feel the same level of excitement that we're on that track, we're on that path, and we're gonna do great things together. Those of you who are our investors are gonna benefit from that. Before we move into the fun part of the session, let me just remind everyone today's presentation will contain forward-looking statements.
Actual outcomes may vary from those expressed or implied, and please refer to this slide or our SEC filings for key factors, risks, or uncertainties that could impact actual outcomes. Joining me today from around the world are a handful of presenters that will follow me on stage today. Scott Morrison, who most of you know, EVP and CFO. Ron Lewis, our SVP and Chief Operating Officer of Global Beverage Packaging, and Ramon Arratia, our Chief Sustainability Officer. I did have someone who's been following our story for quite some time last night say, "I really don't know any of you people. I think Scott's the only person I know." I didn't comment on the gentleman's age, but there's probably a reason for that. We've got an incredibly talented team made up of Jay Billings, who's our President of Ball Aerosol Packaging.
Dave Kaufman, who many of you saw last night, who's the President of Ball Aerospace. Emily Fong Mitchell, who's joined us recently from Colgate, is the President and General Manager of our Aluminum Cups business. Stacey Valy Panayiotou is our new CHRO. Been with us for about six months. She came from Graphic Packaging and prior to that, Coca-Cola. Carey Causey, who many of you know, is our President of EMEA, so she'll probably get a number of questions. As many of you know, we exited Russia yesterday, so she's been dealing with all sort of fun in that part of the world and doing a great job. Jeff Knobel is our Senior Vice President, Global Beverage Finance and Treasurer. Kathleen Pitre, our President of Beverage Packaging, North and Central America, has been in that job for a little over a year, doing a great job there.
Fauze Villatoro is our new President of Beverage Packaging South America. He took over at the end of the second quarter. Really happy to have all of those team members that are gonna be available to you at the end of the session for question and answer. I believe what you will learn from today's presentations is that Ball has the team, the culture, and the drive to preserve, protect our planet and the commitment to our stakeholders to do better and be better and deliver on the long-term diluted earnings per share growth goal of 10%-15%. Scott will be telling you how we're gonna step into that as early as next year. The agenda will be me, followed by Ron talking about our Beverage business.
We're gonna hear from Ramon on the circularity and the reason to believe in aluminum. Scott will follow with financial goals and aspects of the business that we feel we'll be delivering on for the foreseeable future. As a reminder, because we do have folks on the webcast, there will be some resources referred to here in the room and by some of the panelists. You can get those resources. They're available on the webcast platform under the Resources tab. It wouldn't be an investor day and it wouldn't be an analyst meeting if we didn't start with what is embedded in the 142-year history of this company.
Our Drive for 10 vision, coupled with our EVA mindset, are the bedrocks with which all of us operate, our 24,000 employees. This is something that 12 years ago when I joined Ball, and John Hayes was taking over as CEO, one of my first management meetings, I was part of the team that helped to create and document and memorialize these words. It really is about a mindset around perfection with a greater sense of urgency around our future success. One element, I won't drone on this slide, but one element, and we have thousands and thousands of new employees. I personally spend a lot of time with our new employees in the who we...
In we know who we are section. The things that are part and parcel to us, and I think you'll see these things bleed in. Many times we get questions about aerospace and packaging. I don't get it. What you heard last night from Dave and his team time and time again, is how we operate and behave with integrity. We act as owners. We solve the problem. We don't sell products. That has to do with innovation. Innovation can stem in every single aspect, every function, every part of our business. It's how we serve our customers and help them win. We think that that's a differentiator, a significant differentiator.
When we talk to folks that are new to Ball and new to their job and new to their function, I always say, "If you ever have any doubts about what you're doing and whether you're working on the right things, please refer back to this document. If it's not in service of those aspects or you're not being asked to behave with integrity or serve your customer or behave like an owner, then it's probably not the right thing to do. You can take a timeout, and you can question what the heck you're doing and why you're doing it, because I will reinforce and have your back every single time if you're behaving in these tenets." The outcroppings of Drive for 10 really came from these gentlemen, 142 years ago, these brothers. It's a family.
Believe it or not, even with 24,000 folks here, it's still a family. We use that term, we don't use it flippantly. I care a great deal about the folks I get to come to work with. I feel like they care about me. It's a special place, and I think that's why we all give a little bit more than probably we would have at other places that we've worked in the past. It really does matter what we're leaving behind for the next generation and what we're creating here today and how we're serving our customers and how we go about serving our customers. This was started with a $200 loan by five brothers, and I think we've done pretty well with that investment through the years, and we'll continue to do that.
2022 marks the 30th anniversary of EVA. You heard it last night from our aerospace colleagues. This drives our capital allocation methodology. We make money, we generate EBIT, we generate cash flow. We have an opportunity to invest in dividends, share buybacks or invest in organic growth. We take that prism and we use EVA to make those decisions. Everyone is an owner. Everyone has a voice in this company. Everyone gets to make a case. At the end of the day, the numbers tell you what direction you need to go, and then it's upon us to execute against that. Scott will go into more detail about EVA cash flow generation and what we expect moving forward.
One of the things I was asked a number of times by a number of folks in this room is, what's different about Ball and under your stewardship? We try to memorialize this in a strategic document, and it came through a really excellent leadership conference. For those of you who saw last night, the galaxies we're now seeing and viewing with the incredible science that we've deployed in the atmosphere. I'd say our strategy, and it's embedded in Drive for 10, and it's embedded in our EVA mindset, but preserving our planet and delivering value by creating circular aluminum packaging solutions and exquisite environmental space science and defense technologies. Sustainability is our strategy, and it comes through in every one of our businesses.
That has such a powerful ability to attract the younger talent in the world. This in and of itself has enabled us in the tightest labor market that I can remember. It allows folks to want to join Ball, and it keeps folks at Ball. As long as we continue to treat them as our equals, as our peers, and allow them to have a voice. This is something that was memorialized, as I said, at our leadership conference. When we closed the meeting after two or three days, it was incredible time. We had 500 folks, and as many of you have seen post-COVID, you get folks together, the energy and the enthusiasm of folks you haven't seen in a couple of years. We had our friend Jason Momoa there, who was high-fiving everybody.
We had an incredible tearful moment to see the actual delivery and deployment of the Webb telescope. At the end of all this, we're closing out the meeting, so it's like I finally figured out what we're doing here. We're going to find life on another planet, and we're gonna do our best to protect the life that's on this planet. Yeah, a little melodramatic, I get it, a little big and a little audacious, but it resonates with folks at Ball. I mean, we're a family. We believe in this. We're inspired by this. We come to work every day to create a brighter future and make a little bit of money along the way.
One of the things that we are most proud of, and it's not in Drive for 10, but it's absolutely part of our nomenclature, is we believe that we need to win with the winners. We take a lot of time and a lot of effort when we're talking about whether it's in the Aerospace business or in our Aerosol business, who do we want to win with? Who's innovative? Who wants to partner with us? We spend an inordinate amount of time on that, and our partners are winning in the marketplace. Our portfolio is one of the things that I'm most proud of and we are most proud of here. In the beverage side, we have blurred lines. Beer companies are now beverage companies. Non-alcohol companies are now alcohol companies.
The folks that are most innovative, most acquisitive, have the broadest reach, have the most nimble and agile systems, they wanna partner with us 'cause that's what we offer. We do a lot of work, and we measure this in terms of our effectiveness and our engagement with Net Promoter Score, which many of you know about. The last time we were together at the end of 2019, we were sub seven on that Net Promoter Score, and as recently as last year, we were north of eight and gaining on the 90th percentile, the very coveted rarefied air of the upper 10% in the world in terms of Net Promoter Score. That's something that we strive for.
We're not gonna do it at all costs, but we're very, very mindful that if we're loved and we love our customers, that will benefit us for years and years to come. In terms of our global footprint, I won't go through each one of our facilities, but for those of you who have followed us for a while, way back in 2010, we made an acquisition of the MCC vertically integrated assets in North America, and we leaned into specialty can sizes, and we leaned into a broader footprint and a more agile footprint. That was a catalyst for the thinking in and around the Rexam acquisition. Where you see us participating in both North and Central America, in EMEA, and South America, we have the broadest footprint with the most SKUs available.
For our partners that value innovation and new product development and launching those and doing that in a strategic way, this footprint is really our moat in a way that continues to differentiate us. Looking at our D&I journey, something we're very, very proud of. Back in 2015 and since, we've had a number of recognitions publicly, and it has been tethered now into our global people ambition, and that global people ambition outlines a vision for what we want for the people of Ball. Starting with where all the magic happens in our plants.
One of the things that we know we need to address moving forward, and there are some rigid KPIs in and around this, we have a population of aerospace engineers where we have 30% female, which is far and away head and shoulders above what the industry standard is in that area. 30%, when 58% of college graduates are female, is not a good spot to be. We are not gonna be able to grow, we're not gonna be able to keep pace unless we can cultivate and attract gender talent into this business. The same thing is happening in our labor pool, in our manufacturing base in North America. We are going to initiate and try to become even more disruptive. We need to change the traditional historical hourly cadence of 12-hour shifts.
We need to train and develop people earlier on in their careers. We need to make this a place that's preferred by females to work because that's the talent pool of the future. That if we can attract that pool, we're gonna further differentiate ourselves, and we're gonna be able to grow in ways that our competitors can't. You'll see a lot more focus on that. We're gonna be investing in Ball Academy with our partners down in Glendale, Arizona. We're gonna set up a pseudo university where they could work in a filling area, they could work in a distribution center, they could work in our plants. I think some of that activity and some of that momentum and some of that investment is gonna benefit us for years to come.
This is not something that we're just gonna be focused on, and there's recency bias here. We've gotta get this right. We have to get this right. One of the things that we've experienced post the Rexam acquisition that many of you were here with us on is like we need to be a leader. We need to be the industry leader. We are not just operators. We're leading by example, both externally and internally, and we're investing in a path forward to enable a circular economy and resilient and engaged workforce. This resonates again with the younger population. Give people something other than themselves to work on and a purpose, and they will delight you, they will be excited, you will get the best out of them. These are a lot of some of our more recent announcements that we've made.
We're part of the UN Global Compact, the First Movers Coalition that we've engaged with a number of our metal suppliers here as recently as this summer. We have an ASI stewardship now with all of our manufacturing facilities around the world, and we constantly check in with our internal audience and population every year with a customer survey. Employee survey, excuse me.
If you're here in and around Colorado, one of the things that a lot of us, and every place that we are around the world that really differentiates this company from other ones that I've worked at is we are so quick to point out who we work for, the company we work for, what we do, and we're out in our communities, and we're servicing our communities, and providing to those that are less fortunate than us. We feel a real obligation. Everybody feels lucky to be part of Ball. We feel like we have an obligation to give back to our communities and make them stronger, for the support they give us.
The story I'm most proud of over the last couple years is in Manaus in the Amazon region of South America, when we were at the height of COVID, ourselves and one of our customers actually put up a temporary hospital, and our employees were there to help, and we supplied all the necessary PP&E to that facility. I think we're actually helping to save lives. We were making cans at the same time and making ends, but that obligation and that commitment is something that we certainly foster and we steward and we're big believers in. This slide continues to grow. There's more products on here than last time we got together. That's intentional.
We really believe that this will continue to be the case. Aluminum's a wonderful vehicle. It's very malleable. When we talk about transitioning, a lot of our growth is gonna be predicated moving forward on the fact that we have this incredible package, incredible sustainability and circularity story. At the same time, if you're gonna transition in and out of other substrates and profit pools, which we've talked about for a decade now, you need to be. These are all disruptive spaces. Yes, there may be a reclosable or resealable end on a PET bottle, but it doesn't have to be, right? If it does, we have an answer for that. I think you have to be willing. This tethers nicely into what you heard Dave Kaufman talk about last night.
We're not selling products here. We have lines that are set up to make all of these products, but if a customer wants something different, and that's a disruptor or that's a white space that we can capture, we will do that. We will innovate with our partners. We will help them. If they're winning in the market, we're winning. That's the philosophy that we have, and we have continued to demonstrate, and we will continue to demonstrate. If the last couple years have taught us anything, supply chains need to be resilient fundamentally. A couple years ago, we talked a lot about the need for, at least in North America, that we need domestic supply. A lot of the investments in rolling mill and aluminum capacity have been going into China over the last 20 years.
Subsequent to the last 12 months, you've heard three significant announcements in the market. I won't go through all of them, but these are multi-billion-dollar announcements. For those of you who are wanting to know reasons to believe, reasons to believe in aluminum, this is not subsidized. This is not subsidized by the government. This is not chips manufacturing and tethered to a government bill. These are publicly traded companies that are investing in this to earn money. They believe in this story, and they're willing to put significant sums of money into this story. We certainly appreciate that and appreciate them for everything they've done, our supply base over the last handful of years, and will continue to do. As you get into 2027, 2028, 2029, these facilities will start to come online.
Given everything that's going on in the world, that will certainly provide us with an incredibly resilient supply chain for the future in the domestic U.S., and there will be more to come in Europe and more to come in South America in years to come. I get a lot of questions on water. Just to put some context centered around this. Globally, last year, there was approximately 590 billion plastic water bottles sold annually. Two years prior in 2020, and I believe we referenced 430 billion. This is actually the fastest growing category. It's water. Some of it has to do with there's not really good drinking water in a lot of parts of the world. This package, every one of these, you can find right now in Whole Foods.
I can take a picture of it, I can tell you it's going to come, but it's already here. That's what's exciting to me. It's still a sliver. We're investing in a number of other opportunities. I think the package on my far left of this slide, the blue Mananalu bottle, this is a reuse vehicle. Others are single use. Some are resealable, some are single use. When we talk about disruptive space, it can be any and all of these things, and every one of them is incremental and white space to Ball Corporation. We're excited to participate wherever we can in this incredibly large marketplace. It's good for the economy and everything, whether it's reuse, resealable or single use, it's aluminum. The end of life on aluminum has got the best circularity story.
Anytime we get going down the path of reuse versus single use, it doesn't matter to me. We have a huge single-use business, but the fact of the matter iths there's tons of opportunity in other areas where it's all white space to us, and aluminum is the best end-of-life story for all of it. I won't talk a great deal about our Aerospace business, but the size and scale of the accumulation of backlog over the last handful of years. For those of you that don't know, it's our oldest business. This was founded in 1956. We've reinvented ourselves time and time again. We have more opportunities in the commercial marketplace than we did two or three years ago. There's an opportunity to unlock value here in a way that didn't exist a couple years ago.
Many of you heard about that last night as you were taking a tour of the AMC and seeing those products firsthand for yourself. We're very excited about this business. It still feels like it's in the right spot to be part of Ball Corporation. The time in which it's not, and it can unlock more value outside of Ball, we owe that to our shareholders and to our employees, to recognize that and acknowledge that. Right now, we don't feel that that's the time. I won't spend a lot of time on this slide, but the next time you're on a Hawaiian Airlines flight, you will find aluminum resealable water. Our Cups business, the next slide, is we've rolled out five sizes now. We're continuing to be big believers in that market.
Talk about a business that hasn't caught a lot of breaks. COVID, coupled with the food service industry, which is the biggest opportunity for that. I think Emily will get some questions here on that, but the circularity story still holds true. It's doing wonderful on retail shelves. You'll get it at the Super Bowl. You'll get it at Formula One. You'll get it on airlines soon. Our prospects are quite good. We're talking to a number of significant customers about large volumetric launches. Once a domino falls, the rest will fall. We'll continue to be excited about that business.
I won't go into a great deal here, we've already covered, but when we look at our Aerosol business, aspects of that business that are much brighter than they were a couple years ago, and we've talked about these with a number of you. Our personal care space in Europe, reuse is a very, very big opportunity set. Our Boomerang partnership, Mananalu partnership, and Proud Source, you'll see our packages with all of those products. Very excited, and I think this personal care space, if any of you have been in a retail outlet, there's a heck of a lot more plastic in those spaces than there is on the beverage aisle, so it's a fertile ground for us.
Last couple slides, just for checking in and referring back to what we said back in 2020, I think it's important to hold ourselves accountable. This was a slide we shared then and a slide that I'll update you on now. We believe in the long-term 4%-6% global aluminum beverage CAGR. We still believe in that. It might look slightly different region by region, Ron will tell you, but we've accomplished that over the last couple years. In fact, we're a little ahead of that. We've deployed growth capital in line with our expectations. We've got 25 billion units of installed capacity. We have absolutely exceeded the growth in our backlog in our Aerospace business in more than a double-digit capacity. Despite this year, we'll be back on track next year.
In the years previous to that, we have delivered on our Ball equation of EVA, and I think what you'll hear from Scott is obviously we've got impediments on FX and some of the inflationary pass-through language that'll come back to us. If we didn't have those, we would've delivered it this year as well. You'll hear more from both Scott and Ron on those two areas. Lastly, every time I've gotten up and spoken in front of an audience, over the last 12 years or I've heard from leaders that have been in this position, every single year our prospects have been brighter than the prospects previously. That hasn't changed. Our culture hasn't changed. The quality of our people haven't changed. Our EVA mindset hasn't changed. Our circularity story hasn't changed.
The opportunity set is actually greater. We do need to execute a little bit better, but our contracts are gonna recover some of the challenges we've had this year, and our future is incredibly bright, and I think you'll hear and feel that even more when you hear from some of my colleagues. Let's go ahead and start that right now with Mr. Ron Lewis, who is our Senior Vice President, Chief Operating Officer of Global Beverage. Ron.
Thanks, Dan.
You bet, buddy.
All right. I forgot my drink. I gotta grab that. I need something to drink. Thank you. If anybody heard the music before we started, it was a little elevator and loungey, so hopefully, if you want, get a little caffeine and enjoy yourself with me. Hi, everyone. My name's Ron Lewis. I lead our Global Beverage Packaging business. I'm really excited to be here with you. I joined Ball three years ago. I joined from the fast-moving consumer goods space. I'd worked in the Coke system for about 20 years, and before that, I worked for Mars. That's my background. It's not nearly as cool as helicopter pilot, as Paula Burns spoke to you all last night. Dan, this is my coolest job, so but it's not nearly as cool as helicopter pilot either.
I joined Ball because of the people that I knew. As a customer of Ball for 20 years, I found them to be, of course, high integrity, but humble and committed to supporting the business that I was helping to lead. I really, really believe in the aluminum sustainability journey and story and Ball's leadership in that. So that's why I'm here. I really look forward to sharing a few things with you today about how we're trying to build a future by coming together to build a sustainable future, in fact, one beverage can at a time. I really look forward to the Q&A panel. We have a great group of leaders I'm super excited to be up here with.
Look forward to you getting to ask them a few questions. Before I get into my prepared remarks, so I just wanna say a few thank yous. First, a thank you to all of our colleagues. I hope that some of them have a chance to listen to this, if not now, maybe later. They're our frontline heroes. They're our people that make cans and bottles and ends each and every day. They're our owner-operators. They are an owner in this company, just like every single one of the people you talk to are. They are where value is created for our customers and our shareholders. Also, a big thank you to our customers and our supply partners who have supported us throughout this year.
This is our vision, coming together to build a sustainable future one beverage at a time. What I like about this is it speaks to our customers. We're supporting them. We need to support them as they grow. Certainly our supply partners, Dan mentioned the investments that they've made. This is. It's critical for us to be able to support the entire ecosystem. Everybody has to make investments. Of course, consumers. Every time somebody reaches for a packaged beverage, when they reach for an aluminum packaged beverage, they're making a choice about what their future is like for themselves and hopefully the future generation. Maybe shifting from our vision to where we are today.
Today, our Global Beverage Can business is still, as Dan mentioned, in a long-term multi-year growth pattern based on the sustainability tailwinds that we see. The physical attributes of aluminum are unchanged, and they will remain unchanged. Year-to-date, we're growing 2.5% volume year-on-year. That's certainly slowed from the prior two years during COVID disruption, but we're still growing off a much higher base. We've had some regional differences that we're happy to answer for you as we do the Q&A panel, various reasons, economic impacts or geopolitical, you name it. But we're managing through those. The fact of the matter is the can is winning.
When we look at IRI data, when you look at Nielsen data, when you look at scan data, the can is winning on a substrate basis versus other packaging substrates in every one of our geographies. While aluminum, and you know this, aluminum is a pass-through in the way we operate. The other costs of our business pass through on PPI mechanisms, and we have faced more significant headwinds from an inflationary cost pressure this year, than we expected, quite frankly, when we made our plan. Scott will talk more about that as well as what we expect for 2023. We're certainly, as you know, optimizing our own supply and demand balance. We will do that and continue to do that with an eye towards delivering EBITDA dollars.
That is our primary metric for our business. We will continue to do that going forward. We'll do that by controlling what we can control, whether it be input costs, throughput costs, or overhead costs. We have a plan for each one of those. We're happy to talk to you about the variable nature of that or the fixed nature of that. As Dan mentioned, we are enabling a much more resilient, agile, localized, domesticated supply chain. The years and the decades that I also lived through of far-flung supply chains, I think are over. Domesticating supply chains, bringing them much closer to where consumption happens is what we're trying to achieve, and that's what Dan mentioned when he talked about, for example, the aluminum rolling mills that are being built in North America.
Next slide, please. Dan also mentioned our Drive for 10: who we are, what's important, and where we're going. I just wanted to start a little bit with what's important to us. Firstly, what's important to us is that we take care of each and every one of our colleagues each and every day. Everyone goes home from their work as safe as when they arrived. That's important. People are cared for and looked after. After that, our top priority is our customers. That's not unique. We are maniacally and relentlessly focused on delivering for our customers. Dan mentioned it. We're very proud of our Net Promoter Score. We have a Net Promoter Score this year that we are in the advocate status. We're over an eight, and we've been on a journey to improve that over time.
We're really proud of that. We wanna be our customer's most indispensable business partner, investing with them. We wanna be the easiest can maker, the easiest packaging supplier, the easiest supply partner of theirs to do business with. And quite frankly, we want to love our customers. That's our mantra. That's what we want to do. We wanna love them by giving them what they believe they need, not what we have to sell them. After that, we know that we're in a competitive marketplace, and we like competition. We're happy to compete. We think we can win. And that means we have to be operationally excellent throughout our business. Ramon will talk to you in a moment about how we're continuing to drive our point of view around sustainability and commercializing sustainability.
I'm really excited about that because, again, I think every can sold is one good can sold for the planet. We're very focused on innovation and new business development opportunities. We can talk more about that in the Q&A, but you'll see that part of our growth thesis is also new beverage packages, or new categories are choosing the can over any other packaging substrate. Finally, I think it's really important, given our recent performance, that we do what we say we're going to do. We will do that by controlling what we can control, and you should expect that of us. Next slide, please. How do we see the industry? Dan mentioned that a lot has changed.
What hasn't changed is that we believe in the long-term growth trajectory of this business. The drivers also haven't changed. It is the sustainability tailwinds that I mentioned. It is the categories that are already in CSDs shifting out of other packaging substrates into the can. Of course, I'll share with you in more detail where new categories are moving into the can from the very get-go. As we look across the world over the next five years, we see about 125 billion new units coming into the market, and importantly, where we operate, more than half of that growth will come. We feel like we are positioned to win in those markets because of our relationships with our customers, and we're gonna continue to serve our customers, enabling them to win.
That's the formula we've had for years, and we're not going to change that. Next slide, please. That was about the market. Why does Ball have a right to win? We have a right to win for a couple of reasons. One, we are close to our customers. That's something that is who we are. We have more than 50 plants that are close to our customers. And the second thing we have is the broadest array of cans in sizes, in shapes, in innovative offerings for the can market. That's another reason we have a right to win. In fact, more than 50% of what we've sold in terms of cans last year was in what we call specialty cans.
That's something we keep track of and measure, but those are a couple of our rights to win. Can we go to the next slide, please? Speaking of winning and winning with the winners, we have moved a significant amount of our volume into our global key account customers or our global beverage customers. Dan mentioned we have long, well-established relationships with these customers that are winning, and they are winning in the marketplace. We enable them with our footprint, with our capacity, with our capability, with our investments, and with our innovation. We always talk about the long-term nature of the contracts we have with our suppliers.
All of the investments we make, whether it be a line or a new plant, are done with one of these customers on this slide as an anchor tenant for that capacity being added. They make a long-term commitment to that asset. Now, they need to grow in order for us to achieve what we want, but they make a commitment to us in terms of what we're doing with that investment. Next slide, please. We're also focused on optimizing our productivity and manufacturing capabilities and credentials. Every single one of our beverage packaging plants is certified to the ASI standard. That's also from a chain of custody and a production standpoint. Our suppliers and our customers are also certified to this sustainability standard. These two images, just to share with you what they are.
Number one on the right-hand side of this slide is the groundbreaking of our plant that we're building in the Midlands in the U.K. This plant is again supported by our global key account customers who are growing filling in that country, and we're supporting them by adding capacity. On the left-hand side of this slide, this is a picture of Dan referenced our Glendale, Arizona facility. It is a fully integrated can-making plant with a can-filling operation and a distribution center for that customer to serve their consumers throughout North America. It's an investment we made for the long term with this customer. Next slide, please. I mentioned the can is winning. It is winning in every category. It's winning in non-alcoholic and alcoholic beverages.
Our history tells us that the can will win in any economic environment. As things worsen from an economic standpoint, we know historically the can has won, and we believe it will continue to win. I'll share more detail with you around categories and geographies as in the coming slides, and we're happy to take questions on that by geography or region as you like. Next slide, please. Again, what are Ball's rights to win? Why do we have the right to win in the marketplace? Well, again, first, we have the most extensive plant network where we operate today. We're close to our customers, and that matters. We ship empty cans around. They're very economically priced packages. They shouldn't move too far.
Things like shipping them from overseas doesn't make sense. We're the closest to our customer. Number two, we have the most extensive array of sizes, shapes of packages available in aluminum. Number three, we have made investments in innovating to provide those features that customers want. As the market leader, we are absolutely driving the sustainability agenda for the aluminum beverage package. Lastly, I think it's really important that you know that our relationships with our supply partners is stronger than anybody else's, I believe. The investments that Dan spoke of in rolling mills in North America are driven by our commitment. We say we have anchor tenants in when we build a new line or plant, we are an anchor tenant in those facilities.
We are the reason why those facilities are being built, and we're proud of that. We know that that comes with a long-term commitment and partnership, and that's what Ball's ecosystem is really all about. Next slide, please. Let's take a turn into each of our major geographies and regions, starting with North America, where we see volume growth in the 2%-4% range. There's been a lot of craziness in imports. I'll talk about that in a moment. From a demand perspective, we see volume growth and demand in the 2%-4% range over the next five-year horizon. We will continue to, in every geography, optimize our supply-demand, our operations to deliver EVA dollars.
We mentioned and noted that we were going to close a few facilities in North America because we had an imbalance in our supply and demand, following some assets that we had built. That action we were going to continue to take. We are going to manage our supply and demand to be in balance for our customers and for us with an eye towards delivering EVA dollars in the long run. The other big thing that I think is driving this growth in North America, and you'll see it in the slides, is a continued shift within the categories that already have cans from other substrates into cans. That's probably the biggest change and the biggest opportunity for growth that we see, along with obviously, new categories.
Could you go to the next slide, please? Diving a little deeper into this import comment, and I know a lot of you had questions to our IR team around this. Imports of cans from rest of world. Take North America as one contiguous continent, Canada, Mexico, U.S. combined. Rest of world in 2021 peaked at about 9 billion units, and it's already down to about 2 billion units as everyone has domesticated that can making capacity. This will get down to in 2023 back to a normal level, back to pre-COVID levels, where we'll have maybe hundreds of millions of cans coming in from outside of North America.
That's where a significant amount of the investment has happened in North America, is to, again, domesticate those empty cans that shouldn't be really coming from across oceans. Next slide, please. What's happened over the last couple of years in North America? The North American market has grown from 2019 pre-COVID to more than 140 billion units. More than 25 billion units of demand has been introduced in North America over the last three years. It's a high single digit CAGR growth rate. It's been huge. A couple of interesting things about this I think to know. One, for sure, carbonated soft drinks and domestic beer is where the overwhelming majority of the cans are being used.
The big opportunity, again, is a continued shift in those categories out of other substrates and into aluminum. The second thing that's interesting, I think, is you see the FMB, ready- to- drink, hard seltzer, and the energy drinks gaining a point or two on a much bigger pie. That's about new categories, and then the growth of the can in new categories. If you could go to the next slide, please. Speaking of new categories, why are cans outpunching their weight in new categories? Well, number one, there's no legacy assets to fill other substrates for a new upstart or a new category.
You can see that we've moved from, you know, somewhat or a bit less than 70% of the new products being introduced in cans to more than 83% this year. There is a continued push towards cans as the package of choice in new products and new categories. I think you'll continue to see that, and that's why cans continue to outpunch their weight in these new categories. Next slide, please. The numbers don't lie. This is North America, 2017 to date. We've seen a 6% shift in non-alcohol from other substrates into cans as a percentage of the overall market. We've seen a 7% shift in alcohol, and there's still this delta, this gap between what is in alcohol and what's in non-alcohol.
Next, after the break, when we come back, Ramon will talk to you about how we see that gap narrowing because of some of the consumer sentiment and activities from a recycling standpoint to drive can usage into the market. This is a very march that we believe continues relatively unabated into the future. If you could go to the next slide, please. It's happening in every single category. Either the can is holding its share at an extremely high level, look at energy drinks, for example, or FMBs, or it's continuing to grow. Every single subcategory in North America, the can is winning. Next slide, please. Now turning to Europe, Middle East and Africa. A couple of things that are interesting here.
Number one, we foresee a growth rate in the 4%-6% range. Similarly, we will optimize our investments to deliver EVA dollar growth just like we will in every geography. Some interesting statistics. Over time, what's happened in Europe. Over the last 20 years, total packaged beverages have grown about 25%. The can has grown more than 50%. The can is growing at a rate double what the overall packaged beverage industry is growing at. There's been some hiccups in Europe in the past, for sure. The economic crisis in 2008 and 2009, the can grew. The can grew small, low single digits growth, but no other packaging substrate did during that economic crisis.
We know from a historical perspective, the can is basically 2x the overall industry, and in tough economic times, the can grows. We see a lot of policy change in the European Union, again, that Ramon will talk about, but a lot of policy change, whether it be the Single-Use Plastics Directive or new coatings requirements that we believe favor the can in the long run, along with the physical attributes of this product, that make it so valuable from a recycling perspective. From a personal standpoint, if you go to the next slide, please.
I joined Ball, as I said, three years ago, but 12 of the last 20 years I've spent living in Europe, and it is definitely the land of opportunity when it comes to the aluminum beverage package because it's the lowest penetration rate of all of our major geographies. Now, it's not lowest penetration rate for every category. Energy drinks are sold in this package everywhere in the world. But look at the can penetration rates in carbonated soft drinks and in beer. They are materially different than they are in North America, and we have a huge opportunity to move that needle.
That's why I say Europe is a land of opportunity, and we're excited to pursue that, and that's why we're making a number of the investments we are in Europe to support our customers to do just that. Next slide, please. Turning to South America, where we see a 4%-7% volume growth over the long term in the next five years. Again, this is about a package mix shift. We could talk about the can in Brazil, for example, in the beer market, is at about 50% of the total packaged beverage consumption of beer. That's, again, a slow, steady improvement over time, where we see the can gain share against refillable glass, for example.
Now, during COVID, things went a little crazy, and we saw a can share grow to 70%, and it's come back to this slow, steady improvement of the can taking share from refillable glass. I think the biggest opportunity here you see on this slide, we have single-digit penetration of the can in the carbonated soft drink market. There is a big opportunity for us in South America. Next slide, please. The other thing about South America is it's a very resilient market. I talked about the long-term trends in Europe, its resiliency. In South America, yes, there are country upheavals. Yes, there are economic wild cards that we get thrown. Over the long term, over the last 15 years, the CAGR has been 8%.
We believe that it will be 4%-7%. I think that we've got maybe even a little upside there. All of these growth rates are based on what our customers are doing. In South America, we're growing into Peru. That's our next market, where we're building a can plant. We announced that. We're doing that because our customers are installing can filling operations in Peru because they want to add the can to their package as a part of their mix. Today, you won't find a can in Peru. In three years' time, you're gonna see a significant portion of the share of beer and a soft drink sold in Peru in a can. It's the same in Europe.
I didn't reference it in the previous slides, but what I think you should think about is how much can filling capacity is going into the market. In Europe, we have 130 can filling lines that have either gone in from 2020 to date or that we know and have good line of sight to because our customers tell us and their supplier of their can filling operations tell us over the next two years. 130 can filling lines, 2,000 cans a minute, 400 million cans a year. That's a big number. They're probably not all 2,000 can a minute lines. It certainly supports the 30 billion cans of growth that we foresee in Europe, and the filling lines that are going in in South America certainly support. Next slide, please.
The 10 billion cans of growth that we see in South America. It's incredibly balanced. Yes, Brazil is the biggest market in South America, but outside of Brazil, we see significant growth in Chile, in Argentina, and now in Peru. We're really excited about these opportunities. I wanted to score one other point. Today, the South America market, where do all those cans go, those 42 billion cans? It's about 80% in beer. South America, for cans, it's a beer market. Soft drinks, as a percentage of the total cans sold, is 15%, let's say. Energy drinks, it's about 4%. I can tell you, our customers that sell energy drinks in South America, it is the fastest-growing market. It is booming. Because it's such a low base.
There's a huge opportunity for energy drinks in South America. Next slide, please. To recap, why the can? Why is the can winning? Well, it is the most recycled package in the world, and it's the most recyclable package in the world. The infinite recyclability of this and the cost of creating aluminum versus the cost of recycling aluminum, the delta is so wide that this package is always gonna be worth something. There's a high residual value to it. Maybe one other thing that we don't ever talk about much, but I can tell you, having worked in this industry for a long time, the can is the most robust package to ship, transport, merchandise, put on shelf, sell, keep the product safe, protected, than any other package substrate. It's a winning package.
It's the most efficient on a truck. It's the most efficient on the shelf. It protects the product the longest. That's why the can will continue to win. It can protect sensitive products better than any other package. That's something we don't talk about a lot, but it really is one of the reasons why the can wins. Next slide, please. I started by talking about our vision, which is to come together to build a sustainable future one beverage at a time. I wanna reiterate our thesis that we believe the long-term growth rates for the can is in the 4%-6% range, and for us as Ball.
We believe that because of the sustainability tailwinds that we continue to see, consumer sentiment, governmental action, as well as our customers' actions to bring new can filling to life. It's backed up by our investment as well as our suppliers' investments. I look forward to talking to you more about this as we come into the Q&A session. We're gonna take a break now, I think, about a 10-minute break, and after that, we'll have Ramon come talk to us about our sustainability thought leadership and action. Thank you very much and see you after the break. For those of you online, please hang in there for us, and we'll be back momentarily.
Thanks, Ron, for the introduction and your great presentation. We're going to focus on how sustainability remains a fundamental pillar for our long-term growth. We have lots of information in the slides. There is a lot of geekiness out there, but we're not gonna go through all that. We have references so that you can geek out on those references or on our website, where we have much more information, including our goals and our 2030 vision. First of all, I'd like to highlight our long track record on data disclosure and performance. Today, we're going to focus on a more fundamental subject, how and why aluminum is a better hedged material for a circular future that is coming. The current packaging pollution crisis is accelerating this paradigm shift from waste management to value preservation.
A few years ago, anything that was not a landfill, it was a great story. You remember this euphemism, energy recovery, for basically burning materials. Nowadays, the bar is becoming higher and higher, and we're seeing that the only legit form of recycling is closed-loop recycling, where materials are recycled into those same materials without loss of value, properties, or actual material. In today's world, recycling a mobile phone is not very clever. Recycling a mobile phone into cement is not very clever. Today, in the packaging world, we're seeing a lot of downcycling. As we move towards this left part, we're seeing more advantages where aluminum can play, whether it is on the closed-loop recycling, whether it is on reuse, and refill.
It's all due, as Ron and Dan were mentioning, to the physical properties of aluminum, which by the way, have not changed despite of Ukraine, despite of inflation, despite of lack of promotions. Those remain and remain for the long term. Aluminum is a wonderful material. It melts at 660 degrees. Compare that to the 1,400 degrees, the 1,500 degrees that you need to melt steel or glass. It requires much more energy. Recycling is just remelting. That is very simple, and the losses are very, very low. Another very often overlooked fact is that in a circular world, reverse logistics costs do matter. When you have a compaction rate of 12:1, you're gonna have incredible advantages and in reducing those costs.
As societies reach 90% recycling, those materials with those compaction rates. Look at the picture and imagine other packaging, imagine other materials, they will have advantages. By the way, aluminum does not break. Ron already said that it's equally recyclable despite color, size, or format. It's a homogeneous material. You don't need to separate different bits. It's all made for recycling, and the pull tab is integrated, stays with the can. Those advantages have traditionally already reflected to some extent in the value of the different recyclates, the different end of use. It's not just the value of the materials in the first place. Look, for example, the difference of value in clear PET and color PET, which is the same material. This is just the beginning.
As we see policies, we're gonna see those differences going because what really matters is the cumulative losses of each step in the recycling chain. What is collection losses? What are the sorting losses? What are the recycling process yields? How does it come back to the same product with minimum material losses, minimal property losses? No one, no material can aspire at that 2030 vision of 90% recycling rate and 85% recycled content for the whole portfolio. We, when we say globally, we're looking at Europe, we're looking at South America, and we're looking at North America, which are the markets of our interests. If you look in the detail, once aluminum is collected, the losses are really minimal. This is a study that was done for the International Aluminium Association by Eunomia recently.
We're seeing that until here, there are very little losses. Even that leakage relates, 13% relates to how our aluminum cans, in many cases, especially in markets such as in Europe, they are so valuable that they're used in the construction or automotive. What we see i s that once you close that collection gap, then those cans will remain can to can because it has to do with purity, and it has to do with keeping alloy to alloy. We're seeing in the market, those sort of remelting capacity will be growing as collection increases in Europe. As Ron and Dan we're saying in the U.S. already that remelting capacity has been announced, the hole is on collection. The hole is bigger for other materials. I'm not gonna repeat myself too much on this slide.
This study is from the International Aluminium Institute, and you can get it in the website. Now, because of the packaging pollution crisis, because the upcoming UN Plastic Pollution Treaty, which is the plastic the Paris Agreement for plastics, we're gonna see an acceleration of recycling policies globally. Number one, extended producer responsibilities, EPR. That means that the industry needs to pay for the recycling costs. The way this legislation is being designed is that more difficult to recycle packaging, more costly to recycle packaging would pay more fees. Second thing we're seeing is deposit return systems, which are sort of a modernized bottle bills. In Europe, already by 2029, probably we're gonna have all Europe covered with this legislation.
We're seeing early signs of interest on deposit return systems in the U.S. We're gonna see also other legislations such as minimum recycled content requirements, where aluminum is already there and is not affected by this legislation, or taxes on the use of virgin materials, where again, our high recycled content hedge us from those policies. Green d ot fees or EPR fees. Now this is 1990 Europe. The European Commission decided that industry should pay for collection and recycling costs. Every packaged product would have to pay a fee when it's put on the market in order to fund the MRFs, the waste management, the haulers, as you say, in the U.S. Those fees have been evolving during the last 20 years, because before it was like an equal fee per material.
Now those fees are being more sophisticated, taking into account what are the real cost of recycling for every single material. You can see all those differentials. Just to say that. When this was introduced in 1990, the industry said, "Okay, we're paying. We're gonna put a green dot, a recycling symbol, green dot on every packaging." It was a big scandal because then consumers were led to believe that every packaging was recycled. I always joke that there were two big scandals in 1990, green dot fees and Milli Vanilli. For all of you who are old enough to remember. EPR fees are not the only part of this increasing cost of policy compliance. You're gonna have DRS producer fees.
You're gonna have recycled content premiums, and the differentials between different materials are pretty much different. You're gonna have virgin taxes. You're gonna have recycled content minimum requirements. One of the exercises that we're doing is looking at the total cost of ownership. We don't only look at the cost of our packaging out of our gates. We look at the cost added by retail, by distribution, by all end of life. What we're seeing is that with all these new added policy costs, we're gonna have a much better hedged future with aluminum. I'm not gonna go into the next slide.
I'm just gonna also reference that we have a plan to reach 90% collection rate, and we are gonna publish this recycling roadmap with a lot of transparency country by country, region by region. I'd like to just pause a little bit on what our customers' circularity goals are, and how our recycling, our circularity vision is really a good partner for them to rely in order to achieve those goals. I'm gonna go quickly on this slide. Dan mentioned that we're looking at the full portfolio on the circularity spectrum. Of course, we look at closed loop recycling, but we're looking also at venues, how venues are redesigning the packaging that they put in place because they capture the value. They don't see waste, they see value.
We're looking at hybrid-filled refillable on the go. If you are like me, that you want to do the right thing, but when you go to an airport, you forget the reusable bottle, and then you can buy that bottle in the airport and then reuse it for 10 x or any times while you are on the go. We're also looking at the other opportunities that they were mentioned. On the GHG, on the carbon goals for our customers, we also see a lot of opportunity to support. I mean, these are pretty hardcore, difficult goals, but our goals are aligned. I'm not gonna go into that one. And neither this one. I'm gonna go straight into the plan.
We're having what we call the decarbonization pathway, and we're looking at the levers. This is a global one. We do region by region, and sometimes we do even customer by customer. The opportunities for decarbonization are mostly on recycling, increasing recycling rate, increasing recycled content. But there are really good opportunities on renewable electricity, light weighting, also, optimizing packaging with slick formats. Also, these are conservative estimates of what the primary aluminum industry can do. We think that there is a little bit, perhaps more room, there. We're gonna jump the next one and go directly to the math of aluminum. When it comes to Scope 3 for us or for our customers, you're looking at an average of this carbon footprint, because this is skewed to a lot of China production.
You're already looking at Europe, with 56. You're looking at green aluminum, 4 kg of CO2. Recycled content is 0.5 kg , so 8 x better than green aluminum. This is why this industry has a huge potential for decarbonization at no extra cost with the right policies. We're also doing our aluminum, primary aluminum, job. We're joining the First Movers Coalition, and we're leading, giving strong signals for the decarbonization of the aluminum sector to scale some of the technologies like inert anodes, mechanical vapor recompression. This week, the Mission Possible Partnership with the World Economic Forum published the full decarbonization plan for the primary aluminum industry. We've been working with them. I think it's a very good reference.
I just have my last slide very quickly on aerospace. As you saw yesterday, all from our colleagues on the potential to solve some of the greatest challenges that we face. I'd like to talk that we have hardware opportunities, and we have data intelligence opportunities. On the hardware side, the same instruments that are used for other purposes, they can be used for tracking methane. We're seeing private companies, NGOs funding. We're building a MethaneSAT for Environmental Defense Fund, an NGO. We're looking at high accuracy. You all want to know the emissions of your portfolio, and you don't want to rely on the data of companies.
We're seeing opportunities to start tracking at 100 meters, 2 00 meters accuracy to give that asset level attribution to start understanding a Scope 3 emissions in portfolios. We're also seeing the physical infrastructure risk when you look at when you combine with weather information, et cetera. With this information is really key for people like insurers and also the carbon markets, which has a gap of credibility. We're seeing also opportunities there in terms of nature-based solutions and how satellites can enable a much more transparent carbon market. I'm gonna stop here, and I'm gonna leave you with Scott, who is gonna talk about the financials and some of the particulars you're looking forward.
This is what hair looks like before 40-year high inflation and the worst stock market in 60 years. This is what it looks like afterwards. The world is kind of a mess, but we're not. We need to focus on the things that we can control, like our costs, our cash, our capital, our footprint. Our financial strategy is the same. Dan showed this earlier. We do have cash generative businesses. We need to allocate that capital in the right way and get back. We're gonna get back to growing EBIT and growing EVA dollars. I'll show you a chart in a little bit about EVA dollars and why we still believe all of this works.
I know if we do this and we control the things that we can control, that as we move into 2023, we're gonna unlock a heck of a lot of value and get back to earning the 10%-15%, you know, back in that range that has been our long-term goal. We know when we do this well, it works. Over the last 22 years that I've been here, staying disciplined to this works. Even with everything that's going on in the world, if we just focus on these things, we're gonna be just fine. Why don't we go to the next slide, there? This is a great business model.
This slide is our return since 1998, and the blue bar are the EVA dollars that we've generated and the gray bar's the cost of capital, and the yellow line is our 9% after-tax target. You can see in almost any kind of cycle since the early 2000s, we've been able to generate well in excess of our cost of capital and above our 9%. That's through you know, the internet crisis, you know, various crises that have occurred. We're in the same place today. We've taken a bit of hit this year, I'll show on another slide in terms of our cost of capital going up. If we again, if we just focus on these things, this business model works, and nothing has fundamentally changed in our business model.
The actions that we have announced and are taking on our fixed costs and our G&A, I'm confident we'll see the value and the growth in that blue bar as we look into 2023. Go to the next one. I wanna clear up some confusion because I think when we had our second quarter call, and we announced the closure of a couple of facilities that I think people misinterpreted why we were doing that. If you look back at our history, this is in 2018 when we were seeing growth in the market. You know, we have, you know, 23 plants in the United States. You're always gonna have the lowest cost plant, the highest cost plant.
When you have opportunities to consolidate and take out higher fixed cost plants because of supply-demand changes, you can take out a lot of fixed costs. You put that volume through more efficient plants. When we did this in 2018, we took out $50 million of fixed costs. We gained great efficiencies in our newer Goodyear facility and grew volume 4% and specialty cans 9%. All these facts still hold true today. What was happening was we were, you know, we spent a lot of capital to try to catch up with the growth that was looking like double-digit growth.
Well, when we see that the growth is gonna be more moderate, we're able to do these things and leverage our footprint in a better optimized way, take out a lot of fixed costs and make more money. That's exactly what the announcement in the end of the second quarter was about. We've done this before. I mean, in my 22 years, we've done this a number of different times, and it's really no different today. We know if we continuously monitor our system and make sure that supply-demand is tight and have an optimized footprint, we'll make a lot of money. Let's go to the next slide.
This is our 30th anniversary of EVA, and it's obviously disappointing to see the dip, but 75% of that dip has to do with the increase in the cost of capital. Our weighted average cost of capital went from 5.5% to 7%. So the vast majority of this has to do with that. I will also tell you that I was talking to somebody during the break. There has been a correlation in my 22 years here, where when we spend capital in the short run, it may not always lead to the biggest jumps in your EVA. Over a period of time, over a few year period of time, it does translate into that.
If you've been to a can plant, you realize these are big, complicated assets. Lots of people, lots of process. If you're building something new, you're gonna have a lot of people that never made cans before, and those things take time to mature. You can see we've had dips in the past in our EVA dollars, but there's always an inflection point. That inflection point usually is when you dial back the capital and you really focus on running those plants in the most efficient way, and so you see a nice inflection to the next leg up. I am confident that's where we're at today.
The things that we're doing to make sure that that inflection happens are a lot of things that we can control in terms of our costs, in terms of how much capital we deploy and the speed at which we deploy it. That's what we're focused on. Let's go to the next. You know, in our 2020 Investor Day, we laid out the thesis that global beverage cans were growing at 2 x the historical norm, and our aerospace backlog was positioned to grow 4 x. To enable that growth, we said we were gonna deploy $5 billion of growth capital over five years from 2020 to 2025. Well, the growth came faster in 2020 and 2021, so to keep up with that, we accelerated the capital spend.
Now, growth returns to more manageable levels, and I will tell you, when you're trying to catch up to 10% growth, that is not a recipe to make the most amount of money. Your costs are gonna be higher, you're inefficient. You know, it's kinda like a Goldilocks scenario. You don't want too much growth, you don't want no growth. I think what we're getting to is a more modest rate of growth. You know, Ron got up and talked about 4%-6% over a longer period of time. That's an amount of growth that is more manageable, that you can optimize your footprint, you can do the right things, and you're not so stressed and strained that it's really inefficiency.
We're gonna dial back the capital, we said on the second quarter call. You know, we see this kinda the current macroeconomic environment where this year, next year, I think it's going to be choppy. That long-term growth, for all the reasons Ramon talked about and Ron talked about, that sustainability tailwind, the can is gonna win, and it's gonna win over the long term. We're able to dial back our capital to more manageable levels and frankly, be able to flow a lot more money back to the shareholders. For those who've been around Ball a long time, we've done this over my 22 years here. Next year, we're looking at spending probably $500 million less in capital in 2023 than we did in 2022.
In 2024, it will likely go down a little further if our growth projections don't change, if they stay in that 4%-6% long-term growth range. We need to be focused on cash. One of our goals, our long-term goals, was doubling our operating cash flow by the end of the year 2025. Obviously, that's gonna be a bit more challenging given the sale of Russia and, you know, and where we sit today, but I think it might be a year delay. It's not like that's not gonna happen. That's still our goal. We're still gonna drive to that.
There's a lot of things you can do to drive near-term cash flow, but we've gotta be smart about how we wanna use our balance sheet to make sure that we're making the right long-term choices. You don't wanna make short-term choices that, you know, can juice your cash flow in one year, and then the next year, you're kinda giving it back. You wanna make sure you're smart about it. With the world as volatile it is and with commodities as volatile it is and interest rates rising, this is an extreme focus for us. Managing that, managing it effectively, and again, that's been our history for a long period of time.
We know focusing on cash and costs in the near term is the absolute best thing we could do to make sure we get back to that cash flow generation and historical cash conversion rates in our business. As our capital comes down, we're gonna be able to flow a lot more back to shareholders. I think Ron and Dan may have both mentioned this slide. This is the 2020 Investor Day goals. We are generally on track. Now, we didn't expect, like I think most people didn't expect, the massive amounts of inflation, currency changes, the euro, Russia.
Despite all those challenges, we've got the right kind of business model, we've got the right kind of contracts. As we look to next year, as we look into, you know, delivering on in 2023, getting back on that 10%-15% long-term growth, and when we go to the next slide, I think we're positioned to do that. You know, some people have asked, without Russia, are you gonna be able to do that? And the answer is yes. We have through the things that we've already initiated. Russia generated about $125 million of EBIT. That goes away, and we won't have that for the rest of this year, so obviously that impacts the rest of this year.
As we look to next year, we've announced the closure of three facilities that will save us about $75 million in fixed costs going into next year. We have had every department at corporate and our Global Beverage business go through their cost structure, and we will take out in excess of that in terms of our variable costs, people costs. That's already started. That will happen between now and kind of the end of the year. When we get into next year, we'll have a significant cost savings tailwind as we look to next year. We've got contractual passthroughs on, you know, non-metal passthroughs, PPI escalators, and pricing that will be north of $200 million. We're starting to see PPI inputs moderate or decline. You're seeing, you know, the problems in the port.
You know, California, eight months ago, had 100 ships off the coast. Now it's down to eight, and those are getting processed in 24 hours. You're seeing a lot of the imbalance in supply-demand of goods, you know, that COVID created. You know, during COVID, everybody was buying, you know, new golf clubs, a new couch, a new refrigerator. Those aren't ongoing purchases. Those are things that happen and then tail off. We're starting to see the tail-off of that. I think that will help us from an inflationary standpoint. You're still seeing CPI. Not everything's, you know, funneling through to CPI because food and rent are very high. In terms of our inputs, we're starting to see, you know, lower warehousing, lower transportation. Europe's a little different, where transportation is still expensive.
Energy is gonna get more expensive. In general, we're starting to see some of those cost headwinds that we've had the last couple of years, where we've been choking down a lot of net inflation, will either moderate or potentially even reverse. We're gonna like that a lot. We still think volume grows, but probably at the low end of our range next year globally. Like I said, it's gonna be choppy. We've entered into new contracts that we're gonna like. Our business is in a really good spot. There's been a lot of challenges in the last couple of years. I get it. I think we are focused on, you know, these buckets to get us to return back to that long-term goal in that 10%-15% range.
I'm confident that we can do that. With that, I'm gonna have Dan come up, and we'll close this out and then move to Q&A.
We'll do this together. I'll have Scott stay up here. We'll tag-team this. Hopefully, again, I just wanna reiterate my sincere appreciation for all of you taking the time to come out and see us. It's very energizing to see all of you and to hear our story. It's a story that we are really proud of. We've got a team and a culture that we really believe in, and as Scott said, a business model that we really believe in. Scott already talked to you. What we need to do is we need to focus on our costs, our cash, and our capital allocation. I think I've heard from a lot of you, I want you all to be Ball. It's like, we hear you loud and clear. We want to be Ball as well.
I think Scott's point about the dramatic uptick in growth in our end markets and how to serve that and how to take care of our customers put us a little bit on our back foot here over the last couple years in an incredibly tight labor market in North America, in an incredibly disruptive supply chain, with ports not working, with labor markets really tight, with LTL carriers that you couldn't depend on. I think the team's done a remarkable job. It's been a gut punch, to say the least, in terms of dealing with Russia this year. Our EMEA team, I was joking with Carey. It's like, this is the greatest development period in your career.
There will be no questions about Carey's ability to do more in this corporation moving forward, having dealt with what we've dealt with in Europe. The good news about getting out of Europe.
Out of Russia.
Out of Russia, sorry. You're like Europe. Yeah, that just tells you how many questions I've got on Europe. I anticipate more of those. Out of Russia at an incredible valuation. What's going on there now is really disturbing, and I'm not entirely sure that transaction happens today the way it did yesterday. We had an army of folks working on that over the last couple months at very late nights and very early mornings. We came out of that, I think in a very Ball way, and we dealt with our employee base and our customers in a very Ball way. I'm very appreciative of the team for that. Scott's talked to you about recouping inflation and addressing SG&A.
Some of you may not know this, but we let a significant number of folks go here over the last week. It's heavy on a lot of the folks that are gonna be up here in the Q&A panel. You're hearing a lot of energy and a lot of excitement, but there are also folks that have been impacted, and that is something that has been difficult for us to digest candidly here the last 48 hours, because it's happened very recently.
I just wanna add to that. You know, we are not waiting for. We're gonna get PPI escalators next year. So that's not what we're banking on. That's why we're looking hard at our costs, taking out fixed costs, taking out the G&A costs. Because regardless of what happens next year with inflation, we wanna be able to put ourselves in a position where we're still gonna make way more money. I just wanna make sure people understand that.
A couple of things we've really hit on. We're big believers in the circularity story, the regulations that are coming online. The juxtaposition of Europe is really fascinating. As Ron said, it's a land of opportunity. The greatest opportunity set for the medium and long term, and the most disruptive short-term economy that we're dealing with right now. Balancing that and threading that needle and using EVA as our guiding principle is gonna help us get to the right outcome, not only for our employees, but our investors. We're gonna be innovating. Moving substrates into aluminum is gonna require disruption. It's gonna require innovation. That's something that everyone knows that we do really, really well. There will be from a customer base a fear of missing out if you're not with Ball.
If you're not with Ball, if you're not first mover, we will benefit from that. We won't take advantage of it, but we will benefit from that. Scott also mentioned in 2023, we are telling ourselves the truth. We know that Europe will be a challenge. It will be choppy for the balance of the year. These contracts will come back in 2023. We will see significant uptick in PPI. The number that Scott gave you is net. We know that there's gonna be significant merit increases going into Europe, and the works councils will have to deal with all that. You can gather that the gross PPI number that we're contractually obligated to get from our customers is significantly more than $200 million.
We have tried to address in some semblance of contingency and conservatism in that number. With those numbers, we can get to the low end of our 10%-15% next year. Candidly, we're gonna be very prudent relative to what we do with our cash in terms of buybacks. You can trust in the quarterly dividend, but the buybacks, we need to keep dry powder at least for the first six months to see what's gonna happen in various parts of the world in a pretty disruptive marketplace. With that, I wanna thank you all again. Thank you for the participants online. I don't know, Scott, if I missed anything there. Got a great team. You're gonna hear from them firsthand on what's going on in each of the markets in each of our businesses.
We'll take a brief break, another 10-minute break. If everybody can hang in there on the webcast, and we'll get back, and we'll get things set up, and we'll start firing questions. Thank you.
Really quickly before I hand it over to Ron, I had a few questions. Is the 10%-15% with Russia, is it without Russia? It's as reported. We'll be able to fill the Russia earnings hole and deliver 10%-15% on top of it. I don't know where we're gonna shake out in terms of what the actual earnings are, but to Scott's point, $120 million for the year, so you back off about three months worth of earnings on that. We've said $10 million-$11 million a month. It'll be on that baseline, and we'll certainly for the next earnings call, give a little bit more detail and a little bit more color.
Yeah. I would also say, you know, the world's slowing down, so we wanna make sure our inventories are tight at the end of the year. You know, you can always run and put stuff in on your balance sheet, but that's not gonna pay for it long term. We wanna get everything tight by the end of the year so that we're moving into next year in a much better position.
Great. Thanks, Dan and Scott. Again, Ron Lewis. I'm really excited to have our group of leaders here to answer all the questions that you have. We'll try to make sure that we get as close to the business as possible for them to answer if it's a regional question or if it's about aerospace, if it's about aerosol, if it's about cups. I'll do my best to moderate it. I know that both Dan and Scott will add their comments, so we'll look forward to them adding to the Q&A panel as well. Let's just start first by asking each of the members of the panel to introduce themselves briefly and say what they do. We'll start with you, Ramon.
Hi. Ramon Arratia, Chief Sustainability Officer.
Hi. Carey, Okay.
Just go.
Just start? Great.
Go to the mic.
Talk to the mic.
Into the mic now. Hello?
Yeah, it's working.
Okay, great. Thanks. Sorry. I'm Carey Causey. I'm the President of our EMEA business, so Europe, Middle East, Africa, and Asia.
My background is very much started as a trained engineer, worked in mining and minerals for a number of years in a manufacturing capacity, and then worked paperboard and packaging on the business side of things. I've been with Ball almost eight years now, and I've worked in all three of our major regions in a leadership function.
Thanks, Carey. Jay Billings. I Head up our Global Aerosol business. I've been at Ball for nearly 16 years now. I've been in this role for about 18 months, and prior to that, I led our Commercial business in North and Central America.
I'm Fauze Villatoro. I'm currently the regional president for Beverage Packaging in South America. I first joined Ball in 2002 as an engineering trainee. I left the business. I came back in 2007. Two weeks ago, I completed 15 years within Ball. 10 of that in the manufacturing side of the business, then IBP, then commercial for South America, and now president for the region.
My name is Jeff Knobel. I've been with Ball for 25 years. The last 22 of those have been working for Scott. Recently, I just took a new role reporting to Ron Lewis as head of finance for our Global Beverage business.
Okay, does this work? Okay, good. I'm Kathleen Pitre. I'm the President of our North and Central America business unit. I have been with Ball for almost 20 years. I had the opportunity and honor to work in our Aerospace business for 11 years and then worked for John Hayes during his tenure as CEO for about five years on exciting things like the Rexam acquisition and developing our sustainability strategy, and then moved into Chief Commercial Officer, and then into my role, as Dan mentioned earlier, just about a year ago. Really excited to be here with you today and talk about our business.
Hi, I'm Emily Fong Mitchell. I'm the new face up here, so I've been with Ball for four and a half months, almost five, but who's counting? I currently lead the Ball Aluminum Cup business, and prior to that, I have about two decades in CPG, most recently at Colgate-Palmolive.
I'm Dave Kaufman. I'm the President of our aerospace division. You heard from me last night. I've been at Ball for 22 years, and I've been in this role about 1.5 year . Before then, I ran our National Defense Space business.
Also on the screen, but not on the stage is Stacey Valy Panayiotou, who heads up our HR function. If you have questions around our practices with respect to hiring, training, retaining the best workforce we can, we'll obviously ask Stacey Valy Panayiotou to opine on that. Ana Miranda are in the room to take your questions. We'll start with those. I see Phil has a question to start, so we'll do that. Brandon's monitoring the online, so we'll also go online when we clear things up in the room a bit. Phil, I think you're gonna give us a start.
Phil Ng from Jefferies. I guess there's certainly a lot of questions around Europe, right? Just given the macro backdrop. I think Scott mentioned next year, actually softer guide than I would have expected for 2023, 4% type growth, lower end of that 4%-6% range for global. How should we think about growth in Europe? It's held up better than I would have expected, just given all the inflation. And coupled with that, how are you managing inflation, supply chain risk? And I think the $200 million PPI number that Scott gave was more PPI related. What about the non-PPI stuff? How should we think about that price recovery, cost recovery dynamic in Europe next year? Thanks.
Okay. Thanks, Phil. Why don't we ask Carey to comment on that, but if there's other things that Scott wanna add afterwards.
I'll just say one thing. It's like, this presentation today, I get there's a lot going on. This was 2027 growth rates. Okay? We know that there's a lot of disruption in the back half of the year and heading into next year. We don't know where it's gonna land. We're probably gonna land on the low end and even lower than that. I mean, we're all silver optimists. We have been able to grow, as Scott referenced or Ron referenced, in 2008, 2009. We grew in Europe. The can grew. I don't expect us to grow in the 5%-7% or the 4%-6% range as we sit here today with all the uncertainty. I will tell you, we are gonna make a hell of a lot more money next year because of the price recovery that you indicated.
I don't think anybody should be leaving here thinking that we've given you 2023 growth trajectory or prospects. That's not at all what we talked about today. We said, and I'm telling you right now, it will be on the low end, and it could be below that. All right?
Thanks, Dan. Carey, what, some specifics around Europe 2023?
Sure. You asked a lot of questions in there, so I'll share with you what I've shared with many of you over the last day or so. I almost have to separate demand and supply and talk about each of them separately. Ultimately, they'll impact each other, but it's just easier to absorb the information this way. If you think about it from a demand perspective, we still feel confident in the long-term growth trajectory of our business. The reason we feel confident is A, there's pretty low can penetration in Europe. Twenty percent for CSD, which is significantly lower than what you would see in, you know, the fully, you know, mature can market of North America.
Beer is at 40% penetration, and energy at 80% can penetration is seeing category growth that's in that 7%-8% range. All of the fundamental category dynamics are working for us. Not only do we see that in the numbers? Our customers are investing in putting their capital in can filling lines, which gives us some confidence in what we're doing. We talked about 130 can filling lines across our region. That's great. We spend a lot of time talking with our customers about that. On the demand side, all good there, and certainly, Ramon, you know, shared a lot about what's going on from a regulatory and, you know, legislative standpoint and some of the headwinds we have from the sustainability side of things.
If we flip over to the supply side, it has been really hard. I mean, you know, as Dan says, no one could stand up here and say that, you know, this is easy. We've got it 100% covered and no problems. What I can say is the team on the ground right now that's handling our supply chain is the same team that solved COVID in Europe and made it work and delivered a record year. It's the same team that kept Russia operating under sanctions from the U.S., Europe and Russia all at the same time. Those people are working right now to go after the third thing that's coming after us, which is continued supply disruption.
When we think about energy as a major part of that, and we break down the value chain a little bit, you think about primary aluminum, the market's liquid. LME isn't continuing to go up. It's starting to come down. Even if some smelters in Europe curtail or shutter some, that's okay. It's not great. We're all right with that. When you get into the rolling mills, things get a little bit more challenging because they've got to take UBCs in, and they need natural gas in order to heat and recast that metal. That is challenging. The way we think about mitigating that for Ball Corporation is by having multiple supply contracts, and all of those production facilities sit in different parts of Europe and the world, so that we can push and pull and manage through that with inventory.
It's a benefit of our size and scale. If you go one step further into our own plants, we're doing some really pragmatic things like investing bits of capital here and there to take that energy consumption down and getting really thoughtful about everything we do every day. You know, the age of our burners and things like that. I see my operations colleague sitting in the back, and he spends most of his days thinking about these things. Then we get all the way to the customer, and their concern is around having CO2 and carbonating their beverages. On the beer side, those guys recover it from their process and put it back in, so they're okay.
CSD is a little more tricky, but every single year for the past five years, there's been bobbles and bumps there. They've got that covered. All of this, we think we can get through. As you mentioned, though, the big challenge is what is the economic consequence of that, and how do we make sure that the economic consequence doesn't sit solely in our seats, but gets passed through ultimately to the consumer because that's where inflation has to sit. Because of the way our contracts and our pass-throughs work, they always kind of look 12 months in arrears. This year, it's been tough. We've seen a big hit. Next year, that starts to level itself out a bit, and we're in a more comfortable position. Hopefully that answered a few of your questions.
There were quite a few in there, so.
Thank you, Carey. Next question. Sorry. Yes. Hi, Angel.
Hi. Thanks for taking my question. Angel Castillo from Morgan Stanley. Appreciate that this is gonna be a transition, you know, of second half 2022 and 2023 as we get back to kind of this longer term secular story. To help us kind of bridge that gap, I guess near term, in North America, you talked about potentially being below that 2%-4%. Could you just tell us what you're seeing in North America from that perspective? What kind of run rate we're kind of seeing and maybe from a category perspective. You know, where are you seeing pockets of weakness or areas of, you know, incremental opportunity near term as we kind of bridge to the longer term?
To Scott's point around savings and variable costs, what's kind of the benefit from that or the net benefit that you're seeing from variable costs in the near term?
Okay. Thanks. Well, maybe we'll have Kathleen address the first part of that. Scott, do you wanna reiterate or do you wanna start by reiterating what you said earlier on the stage? Why don't we do that first, the cost piece?
Yeah. I mean, what we did, we're not breaking it down by region or group. Other than the three plants that we're closing are $75 million of fixed costs that will come out as we roll into next year. Then we've gone through every corporate function, Global Beverage business and looked at their costs and kind of compared G&A costs, if you will, back to a couple of years ago before COVID. The goal is to get back to much closer to 2019 costs. We're taking out in excess of that $75 million in people costs. People, technology, consultants, you name it, every category, every category. That is spread kind of across the businesses.
I think what Scott said was, with those actions, we plan to replace that hole that's the Russia bid. We're focused on our input costs, our throughput costs, and our overhead costs. We're very focused on those in every aspect. Kathleen, do you wanna talk a bit about North America demand and where we see it?
Sure. So it's an interesting story, and Ron hit on it a little bit, where we had, during the COVID period, a really significant increase in demand and a lot of import cans coming in the system. We're kind of coming off that now. So when we look at what demand is looking like this year, and we addressed that in the Q2, you know, we have seen a slowdown in terms of the rate of growth. One of the things that I find kind of exciting in that piece though, is you look at the return of on-premise and the amount of inflation, and my goodness, the can is resilient because we're also not giving any of that back.
We've seen this massive increase in preference of the consumer with cans. You know, right now it's looking kind of flat-ish, which I actually think is kind of amazing given you know, the inflation that we're all dealing with and those input costs. When you look at certain categories, you know, we still see a lot of opportunity, and there's kind of two areas that we look at. If you look at our market, and Carey referenced this, it's a more mature market in the U.S. It's a less mature market in Mexico. We've got substrate shift as a driver in categories like CSD, for example, where we see a nice kind of consistent shift towards cans over time.
We have other categories like energy drinks, where that's a high can penetration, but we see a lot of liquids growth, you know, still 5%-6% liquids growth. Import beer, we see liquids growth plus pack mix. That's my favorite. I like when we can get two going like that. I think it's an interesting case when you look at Mexico. You have much lower can penetration both in beer and carbonated soft drinks. We see that as an area more similar to South America and Europe, where the can penetration is low and where you see an opportunity for liquids growth and also mix shift.
The other thing that I think is really interesting and I think makes covering the U.S. market maybe a bit more challenging is what Dan referenced in his comments, where we have a lot of our customers that are becoming total beverage customers. The old lines that it was a bit easier to figure out domestic beer, CSD, energy drinks those lines are getting a lot more blurred, and I think it's interesting and is an opportunity for us. One of the things that we're really enjoying partnering with our customers now is, you know, we have some of our big brewing companies having a lot of success in energy drinks or CSD having success in seltzers. It's a very dynamic and interesting market.
Sometimes trying to look at it category by category can get a little confusing because it's more of a mashup almost every day. We think that benefits us because of our portfolio and our relationships and our footprint, and our desire and ability to partner with our customers on whatever beverage they wanna put in a can.
Thanks, Kathleen. Sorry. Okay. Next question come from George.
Thanks . George Staphos, Bank of America. Thanks for the presentation, everybody. I guess first question will be on growth, and to Kathleen and then to Scott. Kathleen, obviously, it's been a very volatile market. We've heard that a number of times today. You feel comfortable with your growth outlook longer term. You said you're roughly flattish right now. I don't wanna paraphrase when I shouldn't. Why should we? Why do you believe what your customers are saying about the long-term growth outlook in cans in North America? We know about the 130 filling lines in Europe that Carey was talking to. Why should we take comfort in that given that this past year, recognizing again inflation, et cetera, they overshot.
If I was a customer, I would tell you to build more 'cause I don't wanna be short cans as I was in 2020 and 2021. What's our assurance on that? Scott, relatedly, and I hate to ask the question this way. You know, to your credit, the management team in 2016 after Rexam closed, numbers were all over the place. You gave us some goals to consider. You gave us some anchor point for where we were starting from. Recognizing that you're looking to grow 10%-15% this year, can you give us some additional parameters on where 2022 might shake out? It's gonna be choppy. I read that as down the second half. Anything else you can provide in that regard? Thank you, guys.
Thanks, George. Do you wanna tackle the second bit first, Scott?
I think the back half of this year, it's really gonna depend on how inflation impacts Europe. You gotta take out Russian earnings for three and a half months. We also had some things that happened during the third quarter when the Russian government changed how you could. Basically, they eliminated the ability to hedge metal, so there's gonna be some negative impact of that in the third quarter. We're doing a lot of cost takeout now, and we'll see how that all flows through between the third and fourth quarters. I also said that we wanna get our inventories in a place. You know, you can help the P&L by just running and putting stuff into inventory. We're not gonna do that.
We wanna make sure our inventories are as lean as they could be going into the end of the year and so that will ding profitability a little bit too.
I mean, inflation is running at a higher rate than we thought it was 100 days ago. That's gonna come back, but that will impact the third and the fourth quarter.
Thanks, Scott. Dan, Kathleen, you wanna talk about growth and how you feel about-
Yeah.
About it.
You know, the thing that I would say about that, George, is that I think especially during the COVID period, it was really true that every can made was a can sold. Our customers really viewed that as a mechanism for them to make up for what they were losing in on-premise and so forth. We are transitioning into a different mode right now.
One of the things that I think is a great thing that's come out of COVID that's really helping us now is that because of how difficult that was, we've gotten much closer with our customers on planning, and we've built a lot more capability internally, where, you know, we're developing a bit of a challenger rep muscle with our sales team, where, you know, we look at our customers' forecasts, we talk to them about it, but we also look at the scans and the market trends. If those are different, we have a discussion with our customers about, you know, what are the reasons to believe, what are the actions, what are the investments, what are the new product launches that would contribute to that understanding.
You know, I think with all of these things, it's kind of an ongoing learning process, and as the market continues to change and shift, we're learning and getting better and our customers are learning and getting better. I think it's fair to say that the craziness of COVID turned some of those kind of traditional practices and ways of working a bit upside down, and we're rebuilding those now for the environment that we have, which is still an environment where the consumer and our customers really prefer cans, and the inflationary environment is a bit strange.
You know, we talk a lot. We referenced this morning in Drive for 10 and being close to our customers, that kind of joint business planning is incredibly important, and it's something that we've needed to get better at. We are better at it, and I think we can continue to get better in the months and years to come.
Can I add just a couple of things? While capacity has been built to replace these 9 billion cans that are coming in from rest of world, the fact of the matter is all of our customers, the industry has imported a significant amount of cans. There are still empty cans that there's a bit of a hangover in 2022. That will clear up in 2023. Those cans will be filled and put in the marketplace. That dampens demand a little bit, I think in 2022. Hopefully you would agree with that comment, Kathleen. There is a little bit of an overhang of still some imported cans getting filled. The second thing I would say is just like in Europe, in South America and in North America, there are significant can filling line investments.
We didn't detail it here, but having visited a few customers in the last week, for sure there are investments that have gone in and investments that will continue to go in. They're primarily specialty investments. In the room, you'll see a lot of our 7.5 ounce cans. That's still a 25% growth rate. We're really excited about that. There is investment. That would be a reason to believe. Dan, you wanted to add some point?
Just a couple of things to build maybe on the medium term, and then what are our customers telling us right now in North America, and Kathleen, hold me to these truths. To be completely transparent and pragmatic, that's what we're trying to do here today. The conversations when we're putting up our 2%-4% growth for North America, and we had the whole team in a month ago, and it's like, let's tell ourselves the truth, what's really happening in the market, what's gonna grow, what customers are gonna win. The one thing, Ron had it in a number of his slides, I'd ask you to refer back to that.
We need in order to get to 2%-4% growth in North America, we need there to continue to be an uptick of 1%-1.5% substrate penetration. Okay? We need white space and new products that continue to grow at 80%. Those two things bridge us from the historical 0%-1% growth in North America to kind of that 2%-3% range. Things may vacillate from time to time, depending on whether sports drinks suddenly convert over. Maybe you get to the high end of that 4% within a short period of time.
There's reason to believe in the short term, in the medium term, that the circularity benefits will continue to be something and recycled content commitments by our customers in particular, will continue to see an uptick as well as the new product introduction. That's kinda how we get to the low end of that range on a consistent basis. That's how we return a lot of value on a consistent basis. There could be inflection points. One of the things coming out of COVID, and there are a couple data points here, and these are all, I think, well known. The amount of credit card debt has been put on the backs of Americans over the last two years has now gotten back to pre-COVID levels, right? It's been 30% growth in credit card debt. Inflation is ramping up.
What our customers are telling us is, "Get ready because people aren't gonna go out, they're gonna stay at home, and we're gonna start promoting cans." That's a reason for, in the short term, for us to have a little bit of upside. We're not in any position, to your point, George, to commit to any of that right now. We have spent the majority of our time preparing for this has been around how do we get back to delivering on the Ball value proposition, the 10%-15%. We believe we can do that at the low end or even lower than this, in the short term. That's our commitment to the folks in this room.
We have strong belief because of the filling lines, because of the circularity story, because of the conversation with our customers, that there's more there, but we're gonna have to win that, and we're gonna have to own that through innovation, being close to our customers, all the things that you've known historically that Ball does well. We're gonna have to do those things, candidly, probably a little bit better than we're doing right now.
Thank you.
Thank you. Sorry. Over here.
Yeah. It's Adam Samuelson with Goldman Sachs. So first question is on your capacity investments and kinda your view of supply in the industry. The long-term chart says 25 billion units in solid capacity by year-end 2023, opportunity for 45 billion units of capacity by year-end 2025. I just wanna clarify, that last 20 billion units, excuse me. Does that correlate to the CapEx outlook that you gave on the long term? How do we think about opportunity and the flex in your long-term capacity growth and long-term market growth of 2%-4% in the U.S., a little bit higher than that in South America and Europe?
Do you feel like your capacity investments are going to be faster or slower than the market is, as you see your kinda capacity build right now?
We're planning our capacity builds based on contracted volume in that, globally, in that 4%-6% range. I mean, if you look at my charts, the capital is coming down. You can always dial it up a little bit or dial it down, depending on what that looks like. Our capacity always is really driven by what contracts are we signing. I mean, the Kettering plant is a good example. The Czech Republic plant is a good example. It's based on contracts that we're inking with customers. That's what we'll drive. I don't frankly look that much at, you know, are we ahead or behind the competitors. We're gonna do what is absolutely the best thing to do for us and make the most money.
We don't think about market share or anything like that. We think about making sure that we're entering into contracts where we're gonna make the most money. That's what we're focused on.
Yeah, I would say those numbers are not necessarily tethered to an additional 25 billion of capacity. If we get the contracts to Scott's point, we'll deploy that. There's a really good chance we'll be on the low end of those CapEx ranges. We've made a number of announcements about how we're rephasing or slowing some of the planned investments. Las Vegas is on hold. Our North Carolina investment's on hold. The two that are moving forward in terms of the greenfield investments are the two in Europe, and we feel really good about those despite Europe right now. I think one of the things that I know is on everybody's mind is, like, supply-demand in North America.
If every announcement shows up at the timing that every announcement is showing up with the inflation and the end consumer demand destruction, that's not gonna be fun for anyone. We have some pretty disciplined participants, some really good competitors that understand one fundamental truth, we all do well at low 90% capacity utilization. Very rarely do announcements or theoretical capacity additions overstep that line. I think what you may hear, I can't speak for folks, but I think what you may hear is you'll hear a little bit more of a sober tone relative to what we're all facing right now in the market, and you'll start to see a much more disciplined appropriation of capital going in the ground because it's always happened that way. I appreciate the question.
Thank you.
Gabe Hajde,
Hi.
Wells Fargo, sorry. One quick one, hopefully, Scott. If you're willing to break down the $200 million of cost recovery next year by geography, or maybe give us an indication of where you're further behind. I suspect it's Europe, but just any sense there. Then, Ron, if you can maybe draw on some of your experience at Coke, thinking about kind of this revenue mix management, I think a lot of the brands talk about.
Mm-hmm.
Maybe how far down the path they are on that, you know, maybe what inning. Then I guess juxtapose that with where we are relative to inflation and the fact that we're running 10x what historical inflation has been, right, over a 40-year period. I think, you know, Main Street consumer is kinda getting pinched from a lot of different angles right now. Does that change that heuristic for you in terms of, you know, how. Again, just drawing on your knowledge.
Sure.
Great.
Thank you.
The high stuff is driven as much by the size of the business. More of it's gonna be in North America, given that. Almost all those North American contracts have PPI escalators. Most of them in Europe have PPI escalators, although sometimes they work a little bit differently. You could think about it as the size of the business.
Because of in places like South America and places like Russia, Turkey, Egypt, that have much more volatile economic histories, you've built in shorter-term inflationary pass-through mechanisms. It really is kind of the bigger markets in the U.S. and Europe, which will be the propensity of how those year-on-year mechanisms work.
Just to reiterate, I think Scott said that's a net number, so the gross number is quite a bit higher what our customers are going to feel. I think the real question you're asking is, like, what kind of demand destruction do we expect from this inflationary cost pressures that we see? That's a challenging thing to predict. If you ask me to talk about my past, I would say, there are lots of really smart people in all of our customers that work on revenue growth management, so I wouldn't claim to be an expert there. What we see as a supplier to all of those customers, in my mind, is they have had to take pricing just to try to cover their costs.
I mean, there are inflationary costs that they feel just like we feel. When we read their results, yes, they've had to take significant pricing increases. They're still their gross margins and their overall margins are getting squeezed even having taken those higher prices in the marketplace. They're not doing it because I think they want to. They're doing it because they have to. We need to recognize that. The fact of the matter is, yes, I mean, they've taken them, and consumers so far have been willing to continue to buy. I think we feel which is quite impressive. Normally, you know, if you take a little bit of price, you lose a little bit of volume, you're probably okay.
Taking a lot of price, keeping volume in there, but their margins are getting squeezed. They're still, I think, pretty okay. I think we're starting to feel a little bit of pressure on that, and I don't think anybody's also chasing market share. As Dan said, I think the can is a great package for our customers to utilize if on-premise or on-the-go consumption or cold consumption reduces and there's delayed consumption, at-home consumption, the can wins there. We think we win in that environment. It's a great package from a efficiency standpoint. It's a great package for long-term protection of the product standpoint.
I think when the economy starts to continue to deteriorate, you'll see the can continue to win at an even higher pace. That's probably the most I could say about it right now. Anybody wanna add anything else? No. Okay. Thank you, Dan. Thank you, Gabe. Hi.
Hi. In terms of the capacity expansions that are still scheduled to come online, are a lot of the contracted volumes based on replacement of current production or from a different substrate, or is it new product launches? Also how do you have confidence, like, just going back to, I think, a question someone asked before, in hard seltzers, for example, I know it's a small component of your total volume, but the magnitude of the expansion expectation versus where it played out was pretty massive still, even at that small percentage. How do you get comfortable, I guess, with the company's ability to speculate on future launches and growth in markets like that?
Okay. That's a good question. I think what I would ask is, we haven't heard from Fauze, and we're opening a new market in South America. Maybe just a brief comment or two about how we feel about opening a new market. I think maybe, Carey, if you could talk a little bit about new assets we're building there, and maybe we'll go to Kathleen on how seltzers, which is a very small percentage of our portfolio, to be honest, how it's been replaced by other products. Fauze, you wanna talk a little bit about Peru?
Sure. First, seltzer in South America is even lower for us.
Doesn't exist.
It's almost zero. We have two or three brands in different countries, but it never was a big thing, right? South America, Brazilians, Chileans, Argentinians, they really love beer. Now in terms of white space, as Ron mentioned in his presentation, we're moving to Peru. Peru, it's a place with less than 10% can penetration in beer, with two major global customers of us there. We already have one existing one and another one, bigger global customer of ours just purchased a local brand. It's a market yet to explore in terms of cans, and not only when we think about Peru, but also we can service many different countries off Peru, especially Ecuador, for example.
If you take a look 10 years ago, it's a similar landscape that we had in Argentina. Very low penetration, very low demand. Basically, it's returnable glass bottles. Now Argentina, it's 5 x bigger than what we saw 10 years ago.
Thank you, Fauze. Really white space. Carey, what would you say about assets we're investing in Europe?
Sure. Both in the U.K. and in the Czech Republic, we've had these facilities planned for years almost. In Europe, it takes quite some time to get through all the permitting and regulation to finally get to the place where you're producing commercial cans. I think when we talk about our customers and our customer relationships and having partnerships, we don't go around going after price and allowing that to be our value proposition. We need to be competitive, and we need to make sure our customers are as well. Our value proposition is about having a footprint that is close to those people and winning with the winners, growing with the people who are growing.
Both of those plants are on the back of incremental growth in both of those markets, and incremental growth that we've seen over the last few years. It's not like it showed up just yesterday. It's been coming at us for some time, so we feel pretty confident about those.
Thanks, Carey. For example, in the U.K., we've been importing a lot of cans. We're domesticating that supply, which is helpful. Anything on hard seltzers or how we're replacing that?
Yeah. I would just first reiterate Dan's comment that we're not planning on adding any capacity in the near term. We're, you know, we've made some additions that give us a lot of firepower and capability. I think regarding seltzer, yeah, I mean, it was a tremendous ride up, and obviously it's kind of scaling back down a little bit now. We see ready-to-drink and some other things kind of coming up there. I think it gets back to the comment that I made earlier. I mean, we would not put in a plant or a line based on a category. It would be based on a customer, and usually for us, that's across a number of categories. I think-
You know, it's for a business of the scale as ours and the type of investment, we're really banking on our certain customers winning with a variety of brands. I think, you know, seltzer obviously was a really exciting thing. It's still a very big new category for cans. It's obviously slowing down a little bit, but it's a little bit what I was saying about, you know, that we kind of rebaselined, and so we've got a very significant size of a new category that's almost entirely in cans, and now it's our job to create a few more of those.
Thanks, Kathleen.
Just to build on that comment, and there was a slide that was intentional in showing you all, and I actually had a couple questions. Hey, I thought you all used to be with all the small regional accounts. It's like we still are, but that is a big point of distinction when you're growing and new products are growing at the rate they are, and the folks that are disrupting in the marketplace. The folks in Atlanta and the folks over in Belgium, they're gonna put cans across our line that sell to the end consumer, and they have a lot of brands. If something doesn't take off the way they thought, they're gonna put something on there that's gonna go on a shelf. That is not at all what a new category entrant showing up looks like.
That's not necessarily how we strategize or how we build our facilities or how we put anchor investments in. I do wanna make sure that we have opportunity to hear from Jay Billings, who's been doing a great job for the last 18 months as the President of the Aerosol business. Jay, I commented briefly on some of the things that we're seeing in terms of the reuse area and the food, or the personal care space. Is there anything you wanted to highlight for the group just on some of the exciting opportunity set that's there? 'Cause historically it's been aerosol spray, and that's not what we're talking about now.
Yeah, absolutely. Thanks very much, Dan. I'm really happy to see a number of the products out on the tables in front of the group that's assembled today. Yeah, I mean, I think you see it from our big customers as well as from smaller customers, is trying to figure out how to use different packaging for reuse and refill opportunities. Some of that's associated with large companies who have big sustainability goals that they need to hit. Others are connected to smaller companies that are just coming into the marketplace and you know, seeking out consumers who have you know, a value associated with reuse and refill. In North America, that mostly looks like water.
We see that in specialty retail for the most part right now, Whole Foods, airports, places of that nature. We're also starting to see some of the technologies around small batch refill and circular products come in. You all have a Boomerang bottle in front of you. I'd encourage you to look at that technology. It's a really interesting and exciting potentially disruptive technology to allow for circular reuse of products in certain venues. On the other side of the Atlantic, you know, the refill is much more connected to personal care at the moment.
We're seeing a number of folks in large personal care companies trying to figure out exactly how to do it and exactly how to harness refillable product. I don't think that they have it exactly figured out yet, but we intend to be there with them as they're testing new technologies and new capabilities for refill and prefill and a variety of other types of use cases in and around limiting and eliminating packaging waste.
Thanks, Jay.
I just throw it over to Emily real quick, and then we'll hand it back to the audience. Just sticking on this reuse theme, I know you've come in with open eyes relative to our Cups business and some of the big opportunities that we've always outlined have been kind of in the fast casual space, and it seems to be there's some thinking internally about potentially tethering the reuse or even some applications with some of our partners like Boomerang on capitalizing on that. Maybe you just wanna comment on some of that.
Sure. You know, I think as you've all experienced the cup over the last 24 hours, hopefully, it really is a very different usage experience, you know, especially if you've got a cold beverage in there. It really is something that any consumer, any customer that has it in their hand is really gonna see as truly transformative. That said, as Dan said earlier, we haven't been able to catch a break in this business. You know, we launched it right before COVID with the idea of arenas and venues and all these things that were no longer.
As we've, you know, rebuilt the business both on the retail side and as moving into the food service side, a lot of things that we're doing right now is really looking at how do we, first of all, create plastic-free opportunities across our overall Ball portfolio. You know, we have the cup, you know, to what Jay's just talked about, we also have a lot of options within, you know, the water space, within the other drink space. How do we go with a one Ball option that gives a venue or a location or even a town or a city an option to really go, you know, with a full solution from Ball.
Part of that really is, you know, we, when we developed the Ball Aluminum Cup, it was meant to be disposable, to go back into the recycling stream and be back on the shelf in 60 days. What we're finding is there is a lot of interest from customers and from venues about some kind of, you know, limited reuse. We, as we speak, we're in a lot of different testings, doing all sorts of washing testings, both from, you know, home dishwashers, commercial dishwashers, working with our partners at Boomerang to understand their technology, how they're able to sanitize and bring it back, so we can potentially offer a full solution, not just the disposable option, but looking for a limited reuse option and potentially a longer reuse option.
We are seeing that kind of trend in Europe, especially in some of the venues, but they are using a plastic cup. We do think that, you know, with the superiority of aluminum and the end life of that product, that there's a really big opportunity there, so stay tuned.
Thanks, Emily.
Please, over to you.
Yeah. Hey, thanks for taking my question. Matt Krueger with Baird. I got a couple with a decent wind up here, so bear with me.
Pay attention.
Yeah. Given the variability that it sounds like you're expecting to see over the next 12-18 months, and lower profitability across certain regions across the beverage can portfolio, you know, how does this change how you're looking at capital deployment across the business? And why would we not see or expect an even larger pullback from an organic growth CapEx perspective heading into next year given the-
The beverage regions will make more money next year than they're making this year. If you take Russia, if you adjust for Russia, I mean, Europe's gonna make more money excluding Russia than they will make this year. I expect, you know, improved profitability across all the other Beverage businesses. Capital, when you're building these plants, you have pretty extended terms on when you're paying for the capital. A lot of the stuff that is coming in the ground that will happen, you know, like, first of next year, you're paying for that later in 2023. We're paying for stuff now that came up and running six months, nine months ago. There's always a lag on how when you're paying for the capital versus when it goes in the ground.
It's a question of then how does that tail off? That's why I said in 2023, it goes down by, you know, $500 million . In 2024, it'll drop again, is our expectation.
Great. That makes sense. Then in 2018, we started to hear about how, you know, tight capacity situations allowed for much more favorable contract renegotiations. Typically, your contracts are on about a five-year basis on average, I think, or at least that's what was said at the time. You know, as these contracts begin to roll through into 2023 and maybe 2024, how do you view the risk that given the massive amount of capacity that the industry's put in over multiple regions, how do you view the risk that your customer base or just the industry's customer base in general is much more aggressive in their negotiations and things like that, across this next round of, you know, pricing, even if it's not specific to Ball's customer relationships?
I think, maybe we'll ask a couple of our regional leaders to comment on that. I would start by saying, we're gonna make sure that we cover these inflationary cost pressures. That's a big piece of our contracts. Those terms and conditions aren't changing. They just aren't. And our customers are very understanding and knowing of that. We're gonna, you know, slow down our capital expansion. We're gonna maintain an ability for us to cover our costs, and then it's just about competing in the marketplace. I don't know if you wanna add some nuance to that. Kathleen, you wanna start?
Yeah. I mean, in North and Central America, generally speaking, all of our major customers, the contracts have been recently renewed or extended, so we don't anticipate. We've already gone through that whole cycle, so in the plan period that we're talking about, we don't anticipate any new major negotiations. We've kind of gone through a period in the last year or so, of going through that process. We are contracted with all of our major customers through the plan period.
Yeah. I think in Europe we have a good mix of contract lengths. You know, some customers and countries are on a one-year kind of turnaround. Other customers and countries are in that three to five- year, and then some are even longer. You're kind of rolling through. You don't have big cliffs. We manage it so you're rolling through pretty consistently, so I don't see a huge risk there. From a demand standpoint, when you asked your question, I was thinking, well, what would have to be true for demand to completely reset itself in a different way? You would have to believe that everyone goes back on premise for every meal that they have. I don't think we believe that in a recessionary environment.
You would have to believe people move back to plastic in a big way, and I don't think consumers are really down for that right now. It feels right given the contract turnovers that we've got and given I don't believe either of those two fundamental things to be possible, that we're in a pretty good spot.
Thanks, Carey. Fauze, any comments on South America, where we're at contractually?
I believe the South America is a mix of the two because, we just negotiated our major contract with our major customer, in the region, so it's gonna last more than this period of the two to three years. We're also adjusting some of the contracts for depending on the terms, so, making it shorter if it's important for us and or making it in the middle of being shorter or being longer. I believe it was Dan or Scott that said that it's also about
What we believe that's gonna happen because we heard a lot of announcements, but we are not seeing the movements. We saw that in the past that some of the competitors said that they want to put some new capacity in the ground, and we never saw that happen. It's also about what we believe and what comes next and moving pieces around in terms of our competition because, again, some of the announcements that they made in the past never happened.
One thing too that we haven't spoken about. I hear you. It's not about the first contract many times when you're putting capital on the ground. It's always about the second contract. How do we protect ourselves? How do we preserve the margins? How do we expand on that? If these contracts are coming due in 2026 and 2027 at that time period, don't forget some of the slides that Ramon presented. All of the 2030 goals start to get really near term for all of our customers in terms of recycled content, et cetera. I like our chances, not only for the discipline that I believe the industry will show relative to theoretical capacity, but also we're in a period where sustainability is not the biggest issue right now. Right? The world is melting down. That will serve us really well.
The circularity story will come back. I don't know, Ramon, if you wanted to comment on that, but that's the other thing. We're trying to tell ourselves the truth. The conversations we're having with our customers continue to be, there's gonna be more cans. We're innovating. New products are still coming out in cans. As they get closer to these goals and objectives that all of you are gonna hold them accountable to, they're gonna have to put more into cans. We're gonna be the recipe that allows them to win in those recycled content efforts.
Circularity policies are gonna come. When are they gonna come? In every region still, there is room for debate. There is gonna be a UN Global Plastics Treaty coming in 2024, and that's gonna create a lot of pressure for different countries to up their game in recycling policies and circularity policy. Whether some regions will go ahead, and in Europe, this is already happening, whether other regions will follow, you know, two years later, three years later, four years later, that's the debate that still has to be had. Regardless of that, some of the customers are starting to plan for when those legislations happen because you cannot just do it the last year. You need to start planning.
You need to create new innovations, new drinks. You need to look at your overall portfolio and how that would fit into this new scenario. We're seeing that even if in Europe some of these policies haven't come already, people are starting to think and innovate.
I can give a practical example in Europe. Part of the EU Single-Use Plastics Directive was that all packages had to be integrated. The closure has to be tethered to the bottle. That announcement was in 2018, 2017. You're just now starting to see it come to market, and it has to be in effect by 2025. When these policies have to come into effect, when they need to reach their stated goals, 2030, that's gonna have to start a lot sooner. That's why we're seeing all these filling line investments, I believe. Maybe next question. Sorry, Andrew. Go ahead.
Thank you. Good morning, everyone. Adam Josephson at KeyBanc Capital Markets. Thank you for taking my question. Two separate ones. One is, I think, Dan, you talked about wanting to get back to the old Ball. As I remember it was kind of flattish volume, but a lot of cash flow, a lot of cash return to shareholders in the form of buybacks and dividends. At the time, I don't think you gave any volume growth targets. It was just you took it as it came, and you did the best you could with whatever the demand was. Why not just get back to that? Just why not dispense with these long-term targets? Look, you said near term is really choppy. We don't know what's going on in the economy.
Why not just dispense with giving a long-term target and just say, "Look, we're gonna manage the best we can in whatever the operating environment is"? The second unrelated question is. On the last call, I think there was confusion about just the nature of your contracts, and they're not take or pay, but what exactly are they? Consequently, how much visibility do you actually have over the next few weeks, months, whatever the case may be? Can you just kinda go back to that and just talk about what the nature of your contracts is? If it's not take or pay, what really is it? Consequently, what your visibility is over whatever period of time. Thank you.
Thank you. I think the first part of your question, I should record that because I've never heard this group ask for less transparency or more information. I will take that on in terms of the growth. I do think it's important. You know, back at the last Investor Day, it's a great question. I've had a couple people, "Why do you give growth guidance?" I think it's fundamentally a different business. How do I say that without giving you some level of insight in how we're building up the bottoms up? In fairness, we've never been a quarter to quarter business. That's not what this business is. We may need to do a better job of articulating that.
As much as we say it's medium and long term and growth isn't linear, you know, people still react one way or another or place a bet one way or another. I understand how difficult your guys' jobs are. I do though believe that Ball is poised to grow. Because of the circularity, and we have an industry leadership position too. We recognize that since 2016. If we're not talking about aluminum, who the hell is? You know, I think that's a real obligation that we need to step into and then further tell why there's growth attributed to that. We're spending a lot of money on telling that story, let's be honest. A lot of folks don't do that. We have an obligation to do that.
We do that because we believe there's more growth there than has historically been there. I will take that on, though, in terms of potentially softening the growth, because what you did say is what we're actually doing. We're doing everything we can every single day to return value in the historical context, and we've gotten body blows with inflation and currency this year. I'm really proud of what we've got, what we're doing, and what we're gonna continue to deliver moving forward. It's gonna happen at the low ends of the growth rates or without growth. We're gonna flow cash, we're gonna buy back stock. We've always done that, and we can do that, and we will use EVA as the prism and contracts as a prism to make those capital investments.
I think I'll reiterate that when I say old Ball, that's, I think what you're missing from the formula right now, and we will continue to lean into those tenets to give you that comfort that it's gonna be there. I think some of the numbers that Scott indicated and what we've done both structurally from a cost standpoint and what we're gonna get back contractually will show up, and we'll like that answer. Then your other question, maybe I'll let Ron tackle the contract, the nature of the contract.
The new contracts that we stepped into had better pricing, better terms and conditions than the historical with better language relative to freight pass-through and some of the other forecasting mechanisms that allow us to have a more. There is more balance between our customers and us in terms of performing together. The reality is, as volume has softened, the contracts. How it works is, so if we expect 10 billion units from a customer and it's 9.5, we get those first 3 billion at the better terms and conditions regardless. There will be volume shifts up and down quarter to quarter. These are long-term contracts. I think to Kathleen's point and to Carey's point, we'll work with our customers.
This is one of the reasons we've slowed Las Vegas. It's like, "Hey, we don't need those cans right now, but we need to make sure that we're in a position when we do need them, that you can fire this up and put that capital to work within nine months and have lines come up." That's kind of how the contracts work. I mean, we're getting the improved terms and conditions, but if the volume on top of that isn't showing up because of inflation and pricing, we're missing out on that volume. There aren't any hooks into it in terms of take or pay.
I think I mentioned this in my conversation. We're kind of building the business for that longer-term, more modest growth. In that more modest growth, we can dial back the CapEx, flow more back to the shareholders. I think we're gonna do exactly what you're talking about. Maybe I just wasn't clear enough, but that's the intention. We can dial back the CapEx. We can still grow at that mid-single digits, but we can flow a lot more cash back to the shareholders.
I would just add, we follow our customers, whether it's 0% or 4% or 7% or whatever that percentage growth is, we're gonna follow our customers, and that's some specific examples of where we're doing that. That's what we're gonna do. What the other thing Scott said was, we're gonna deliver that 10%-15% EPS growth next year on the back of what we can control. Input costs, throughput costs, overhead costs, we are very focused on those, and we will be able to deliver our commitment to our shareholders, regardless of the conditions that we face.
Hi. John Heilenbach, Mizuho. Can you guys talk about the specialty can mix and how you see that growing? And do you typically see traditional categories like CSD moving to specialty cans, or is it strictly more like new can launches? And within new cans, is it primarily energy and RTD that's growing, or is there anything else that's really coming out?
Great. Thanks, John, for the question. Who would like to start? You wanna start, Kathleen, in North America?
Sure.
Just a few comments.
Yeah. I mean, Ron mentioned it earlier. The biggest single area of growth in terms of specialty cans that we're seeing is the 7.5 ounce that many of you saw. That's primarily in CSD, and it's really about portion control. People still like a sugary treat, they just want a smaller one. That's by far our biggest, or the most growth that we're seeing in terms of specialty size. But we also see, you know, across categories. You know, there's trim sizes are very popular. Obviously, some of our energy customers are having a lot of success in those.
We continue to be the leader in terms of offering a number of different sizes and occasions and being willing to work with our customers on developing packages that help them win. I think the single most exciting one, and hopefully you've had it, is 7.5 ounce.
Thanks, Kathleen. On the other end of the spectrum, people like 24-ounce cans of beer, which is growing quite fast. Carey, what would you add?
Yeah. I think Europe is an especially fun place to operate from a specialty can standpoint because there's so many different things our customers are trying to do.
Kathleen mentioned some of it. Sometimes it's portion control. Sometimes it's occasion-based. Sometimes it's a new tax regime comes through, and they need to hit a certain volume in order to have their total cost of ownership hit the right retail price. Sometimes they use it to manage inflation, and they work to hit a certain price point to compete with other folks in the market. Sometimes they use it to stand out on shelf, and it's a little bit different in every market, in every situation, in every customer. I think that's why you hear us saying over and over and over again, if we're not in the market, if we're not talking to our customers, if we're not understanding that, then we're not giving the value that we could and that we have the opportunity to.
That's why that's so important to us and to our customers.
Fauze, is there a specific channel that a different size can works in Brazil, for example, for beer?
Brazil, in South America in general, we have the highest rates of specialty cans, 68%. Even in Paraguay, it's 90%. Argentina, 75%-78%. It doesn't mean that we don't have possibilities to grow even further. Brazil and also Peru. Peru, for example, we're gonna start with the line with two different specialty cans. Of course, there's occasions that we can still grow in the specialty cans, for example, single serve. Another important category that is still under development in South America is dairy. We don't have it, so we're not present in South America yet with in the breakfast. In the breakfast, the single serve in smaller cans are the preferred ones for the smaller portions and preferred ones for the South Americans.
Thanks, Fauze. Yes.
Hi, I'm Mike Roxland from Truist Securities. Just one quick question. As a company is undergoing these changes, can you talk about employee morale, especially given the fact that you let go, as it was quoted, a significant number of people in the last week? You know, what have you been hearing from the rank and file as the company undergoes this transition? Really, what are you doing to relate to them? What are you doing to incentivize them to keep them motivated, to keep them focused on the job at hand?
Sure. I'll ask, Stacey, maybe to comment, and then I think it'd be great, Dan, if you could follow up.
It's a great question. You know, I'm nine months with Ball and coming in and looking at what was happening in the world. One of the things that was on the plan for 2022 was looking at, you know, kind of a rebaseline, given all the change in the people that were hired and joined. I think we can all look at our organizations of how many people were hired during COVID, while you're also balancing remote work and new ways of working and people feeling far apart. One could say, "Well, is this really the time to measure global engagement?" We said it's perfect time because we wanna get a really a sense of where people are, head and heart. That was way ahead of the conversations and the actions that we took relative to cost out and ultimate people impacts.
It served us because one of the things that I've learned about Ball in nine months is we say what we mean, and we're really transparent. This whole idea of a family, it's very legit. Here's what we learned. From a global engagement standpoint, people said, "We have incredible optimism, belief in this company. I trust my colleagues, and I trust management. What we could benefit from is more communication as we're going through change and feeling far apart." Given what we just went through, we doubled down, and we said, "Listen, our employees told us they wanna hear more, they wanna hear more often." We did just that. Over the course of the last two months, we over communicated in big forums, in small forums.
What we just went through in the last week, although it was very, very difficult, the number of calls and messages and texts that blew up my phone of people saying, "It was really hard, but you prepared us. I didn't feel blindsided. I was treated with fairness, dignity, and respect." That was not just from the leaders that had to deliver these messages. It was from the people who were impacted, and they thanked us for their time at Ball. An incredibly humbling time. Dan, I would turn it over to you.
Yeah. Thanks, Stacey. Let me just regain my composure for a second. Yeah, it's been very, very difficult. The thing that I most admire about Ball is that when there's a difficult decision to be made, we take it. You do that because if you really believe that you're an owner and that you need to take care of the other 24,000 people that need to be excited and motivated about our future, which they should be. When there are things happening in the world, you need to meet the world where it's at. Right now, it's a bit of a mess. We need to tell ourselves the truth about what that means and where we can spend money and what we need to prioritize, and it impacts people.
It's interesting, more so with our plants. I've had to close a few plants in my tenure here at Ball, and it's the hardest thing that you do. I remember one in particular where we typically have the cafeteria full of folks. They know what's coming. I had a handful of ladies with their rosary beads, holding hands in tears. We do those things as people, as human beings, knowing that if we were sitting on the other side, how we would wanna be treated. We've got other folks that work for us in our operations group that went through the most recent plant closures.
I had a couple of them, they've worked for some of our competitors, and they said, "What we would have done in that instance is we would have sent out an email, don't show up to work, and we would have chain linked the doors." We're never going to do that. Our people will always hear from us first. They'll hear from us why. We'll do what we can to help them on their journey in life. If we, as leaders, ever lose sight of that, then we are in the wrong job and we need to get the hell out.
Because you can't ask folks to do what we ask of our people each and every day and to serve our customers the way they do without them thinking that you would do the same thing and that you've got their backs and that you care deeply for them.
Thanks, Dan.
Thank you for that question.
Yeah.
Anthony Pettinari from Citi. I just had a question on aluminum cups. You know, you've made a big investment in that business, and I think it's been an earnings headwind as you ramp capacity and obviously with the pandemic. Can you talk about sort of the path to profitability in that business? You know, hopefully we've turned the corner with the pandemic and maybe the potential for that earnings headwind to turn into a tailwind, whether that's $5 million-$10 million or $30 million-$40 million, or just sort of how we should think about profitability in that business.
Thanks. I think maybe we start with Emily, and if you wanna add anything, Scott or Dan, let's go from there.
Sure. Thanks for that. You know, the path of the last few years, as you mentioned, has been, you know, it has been a drag on the business. We started with an amazing innovation, a truly breakthrough innovation, launched at exactly the wrong time. You know, we pivoted the business, you know, as we launched in early 2020 and stood up the first line with the Greenfield plant. We re-pivoted it to retail, right? Right now, you know, over basically the course of 2020 to 2021, we have basically gotten into every door that we wanted to be in. We'll be hitting an ACV about 70% by the end of the year. That's about 35,000 doors that we're in across retail.
Every big retailer, we actually just closed the last couple of big retailers that we needed to get into over the last few months. Amazon really doing extremely well for us as well. Obviously, with the brick-and-mortar leaders, we're also having a strong presence online. That's really where we've been focusing the business over the last couple of years. Now, with the world opening back up over the last six months, nine months, we were able to start pushing back into food service. We've made a lot of really good progress there, particularly in the area of sports entertainment, which was our original focus. What I think another thing we didn't realize was the route to market there is really long, right?
You have to negotiate not just with the stadium or the stadium owner, but with the concessionaire, with the team, in some cases, you know, with Live Nation or some of these other, you know, concert promoters, et cetera. We've done a lot of that legwork, and we really see, you know, going into 2023, that we're gonna start getting significant volumes ticking up in some of the, you know, early accounts that we started working on sort of, you know, in 2019 into 2020. Second big opportunity is, as we mentioned, and as Dan said today, we've put our second line into the Rome plant. Obviously, that was an investment, but it was really critical for us to be able to offer a full portfolio.
Our first line could only make the big sizes, so 16-ounce, 20-ounce, 24- ounce, which are great for sodas, for beers, domestic import, but you're still missing the cocktail market, the drink, you know, the juice market, the wine market. A lot of our venues and a lot of the customers that we talked to said, "We want and we need a full portfolio. If we're gonna go into this, it doesn't make sense just to offer one drink or one size there." That line just came online two months ago. Actually, that 12- ounce, so some of you have that nice little skinny, delicate, beautiful, attractive thing in front of you, that's been running for about two weeks.
We now finally have that full portfolio, and we think that's gonna unlock a lot of growth in our food service accounts in particular. We're selling that into retail. In fact, Kroger will be the first customer to take the 9 ounce. We're shipping at the end of the month, and the rest of the customers will come in mainly Q1 when their shelves reset. For us, that's really gonna unlock the growth. What I've been doing over the last four months that I've been here is really taking a step back on our commercial approach, understanding what is really the size of the prize of the market, where those target segments are, and refocusing our organization there.
As part of these, you know, this restructuring conversation that we've been talking, we did the same with cups, really to make sure that we are going after the right segments and making sure we're organized to go after those segments. I have a lot of optimism as we go into 2023 and start focusing our commercial efforts there, that we're gonna start taking off together with that new expanded portfolio.
It was a drag in 2021. It's a like-sized drag in 2022. From an earnings standpoint, we get to break even if we sign up one airline. Like, the largest airline in the country has 400 million plastic cups that they consume a year. The digestion period, it's gotta go in front of the CEO. It is a significant cost increase, but, you know, as people lean into the circularity story, it really takes one fast casual dining venue, it takes one of our customers that have a soft drink dispensing. A couple of those big blocks hit, and then you're quickly getting to break even. We'll give you more details as we head into 2023 on guidance.
We've already factored in something, obviously, in our EPS growth commitments. But it could be. I give Emily a lot of credit because she said, "It's not gonna work in this area, but it's gonna work over here." It's a little harder work, and it's a longer gestation period, but we're making real progress with some significant opportunity sets. Hopefully, we'll knock one of those down here in the near term.
Thanks, Dan.
Thank you.
George Staphos, Bank of America. Thanks again for the presentation, everybody. Two questions. One on sustainability and then one on capital. On sustainability, Ramon, you went through a number of slides in terms of why the economics and the carbon footprint and everything still work to aluminum's advantage. We certainly understand and believe your numbers, believe that you believe that. What we have seen quite a bit of is advertising by your customers about that plastic bottle that's being recycled. There seems to be a real push by your customers to push the consumer to believe that plastics is just as good as aluminum. I'm paraphrasing maybe, I'm off base, but that's been my perception.
How do you go to the customer, the consumer, and, you know, show them the data without antagonizing your customers who have seemed to have been somewhat antagonized already about the aluminum can industry, and particularly Ball, pushing the narrative of how good aluminum is? How do you convince the consumer without ticking off your customer? Please.
You shouldn't assume that we haven't ticked off our customer. I've gone into the beatings a couple of times, but it's like we're an aluminum company, and tell us what's not true about our statements. We really spend a lot of time trying to be disciplined about the comments we're making. We try to avoid anti-plastic statements. But the reality is, everything that Ramon laid out will tell you the facts, third-party assessments that the data we're presenting is truth. Some of the myths, if we're not calling them out, I don't know who is gonna call them out. We feel an obligation, but I'll let Ramon speak more on that.
We're not antagonizing plastics, and we're not talking directly to consumers. We believe in the properties of aluminum, in the way we've seen in the presentation and the way the trends, and we're gonna be working with our customers, so when they need us, when they need this beautifully packaged that can be having 360 branding opportunities, which is equally recyclable despite color and format. We're gonna be working with them, and we're gonna be helping them to achieve this circularity target. This is all in partnership with customers, not despite of. We're working, just taking guidance and working with them. It's we're gonna try to delete all this antagonism that some people have been talking about because there is no antagonism on that. We're just working on the basis that we together with our customers, we innovate.
Thank you, Ramon. Thank you, Dan. My other question, and I'll turn it over. Old Ball, right? We've seen Ball in the past get into some divots into ruts. You talked about today a lot of things that you did in the past, getting out of those issues, cost reduction, controlling what you can control, cash flow. One of the things that you also did quite a bit of is buy back stock during these periods. Scott, we understand, you know, there is a lot of moving parts, and you want to keep some powder dry. To the extent you can comment, maybe you can't comment much, how should we expect the cadence of buyback to flow? What are the mile markers you're looking to?
Relatedly, in the past, when we've seen Ball get into the ruts, we've seen management and the board buying stock personally and setting mandates across the company for individual purchases. We've seen, Scott, you purchase, and that's terrific. We've seen others. Ron purchased. What are you doing in that regard to, as we get through this transitional period, you're showing everyone else that you have even more skin in the game. Thank you guys. Again, appreciate the time today.
Yeah. The stock buyback. Let me talk, kind of weave that in with 'cause I guess we got some questions on the phone about the Russia proceeds. We were waiting to see kind of how much we would get for Russia, how much cash, where our leverage gets to at the end of the year. We were very pleased with the proceeds that we're getting. We want to get our leverage down, kind of trending more towards 3.5x-3.7x , somewhere in that range. The world is a volatile place. I think we'll be in a much better position to give you a real clear direction when we get kind of to the end of this year into next year.
Obviously, getting those proceeds, that amount gets us back to being able to start acquiring stock sooner than we otherwise would have been.
On the personal income front here, Scott's more liquid than I am is the answer. In all honesty, I'm very bullish on the company, and stay tuned. I think we'll share some pretty sensitive information here closer to Investor Day.
Thank you.
You're welcome.
Hey, Kyle White with Deutsche Bank. Thanks for taking the question. I know it's been talked about a lot, but I wanted to go back to the contracts and some of the learnings after this past year. I was curious, is there anything more you can do in terms of various contract provisions to protect yourself, if customers are more focused on pricing rather than volumes and not being promotional, or if those targeted growth rates of new categories don't materialize as they expected? I had a second, unrelated question as well.
Can I ask maybe Jeff Knobel to speak a little bit about our contractual terms and conditions? Jeff is a long time Ball employee, and I can tell you from an internal perspective, we look to him for a lot of thought leadership around covering and protecting our interest when it comes to our contracts. Maybe, Jeff, if you could say a few words, I'd appreciate it.
Sure. I guess first thing to start with is just a reminder on kind of our pass-through model.
Depending on where aluminum is, you've got about 60%, give or take, of what's a pass-through onto the customer. As aluminum goes up, aluminum goes down, the can price changes. Our goal from a risk management standpoint is to keep a matched book, so that when Scott and Dan are on the earnings call, they're not saying, "We made the quarter, missed the quarter because aluminum went up or down." That's kind of an immediate kind of pass-through. You're left with this other roughly 40%. Carey talked earlier about utilities being a big piece of that. You've got ODMs, other direct materials, warehousing, freight. Each contract's a little bit different as we go around the world. The big thing that's out there that Scott touched on earlier and Ron did relates to the inflationary pass-throughs.
The situation where we're in now is as inflation continues to go up, we're using roughly twelve-month inflation year-over-year differences that become a pass-through onto the customer base. Scott talked about the $200 million of net inflation roughly that's out there. That's still not a final known number yet. We're not to the end of the year. There's some contracts that look at contractual pass-throughs that still have a few more months to go, that our governments here in the U.S., over in Europe and other places around the world will publish. Even if inflation stays flat from now on, when we come to January next year, March next year, it'll still be a year-over-year increase. What Scott talked about is our 2023 pass-through. He didn't mention there's also a catch-up for 2024, just in how these work.
What we're spending time on is how to bring these contracts a little bit closer, so that when we're talking to all of you, we're not having these giant mismatches, but all that will take time to happen. As we all talked about earlier, you've got contracts that are three years, five years in nature. We can't fix a lot of those that are out there. That's where we're spending time with our customers as these contracts come up to have these discussions as to what is the right mechanism, what is the right pass-through time period, so that they understand our costs and the timing impacts that we're having. I would say that attention to detail that we talk about as part of Drive for 10 is where we're really focusing. In these extreme cases, little costs get really big.
Just like, there were probably 100 questions last night on European energy. Well, in Spain, where we used to pay less than EUR 20, when it goes up 20x, all of a sudden, that's a really big number on a small base. You really focus when those kinds of things happen. Even the best hedging, when something goes up 20x, all of a sudden can be a big number. If you're 95% hedged, as an example, when it goes up 20x, it's like you were unhedged. All that makes a focus in here of how to make those mechanisms work and what's fair for us and what's fair for our customers.
If I could just follow on. I guess my question is not necessarily related to inflationary aspect, more so on volume. If a large CSD customer says they're gonna do 10 billion in a year of cans, but they decide to actually price higher. They see higher returns through pricing, and they do 9 billion, but their margins improve. How can you protect yourself against that type of situation? If a new category comes, emerges, says they're gonna do 5 billion in a year, and oh, the growth rate was a little bit too high, it's 3 billion.
There's ways you can do that, but I don't think that's something we wanna talk about publicly. There is a way to do it, to your question.
Thank you. Appreciate it.
There's some level of volume changes. I mean, the customers are not gonna sign up for a 100% take-or-pay contract. You're gonna have situations where, you know, like in this product where it's up 25%, now we may have thought it was gonna be up 30%. You're always gonna have some of those, but that's where selling to lots of different customers, you're gonna have winners and losers across the board, right? What you try to do is make sure you're as balanced as possible across the board. 'Cause there's always gonna be some categories that win, some that price promote. There's certain customers right now that are price promoting more than others, and they're winning. It's kind of like your mix of customers over time. We're talking about the last few percent.
Yeah, I think it's really important. This is a distinction between us and potentially our competitor. We have long-term strategic partners. We have more discipline in the short term tactical because they don't necessarily trust us, and we don't trust them. But if you're our biggest customer and you're telling us that you see this growth over the next five years and we have a rough six months, we're not gonna put teeth in a contract for that. They'll go do business with somebody else. I think that's a huge distinction with what we're talking about and some of our customers. Scott referenced. I think you all know this. I mean, these are once in 40-year types of impacts that we're dealing with. I'll just tell one story about Chile and a market that we're in.
These stories are in every single country, and you can't designate a contract for the behaviors of governments in a time like this. Chile's GDP for the last decade has been $300 billion. In 2021, because of COVID, they have a national retirement account. Everyone has a national retirement account. They allowed folks to pull out 40% of their retirement savings. Their GDP went from $300 billion to $390 billion in 2021. We grew at 25%. How did that happen? I think you guys know how it happened. We're still growing in Chile this year off of.
In a staggering base, but we're growing at a slower rate than we anticipated, and I don't think anybody has a model to predict what the hell is gonna happen relative to that scenario. That's playing out in countries all over the world for us. Our partners, we're sitting down, we're getting in a room, we're having conversations. They're not gonna tell us the specifics of their pricing patterns, but they're gonna tell us if this volume's gonna show up, and at some point, it's gonna show up. They also work with us during these periods to make sure that we're getting our fair share. I think those are the puts and takes, and it is a disruptive period, to Scott's point.
I think the contracts we have are protecting us, and they're protecting our economics over the medium term. You'll see it come back next year.
Thanks, Dan. Yeah, that's what being close to customer means to us. It's not one negotiation, it's every day. Next question.
Steve Wilson, Lapides Asset Management. Scott, I'm very much interested because it's been many, many years that I followed this company, and this is the first time I've seen, you know, negative free cash flow. We've had to borrow a fair amount this year, partly for the CapEx program, partly for the aggressive share repurchase. You've talked about how earnings will recover next year. Can you talk about how cash flow goes from where it is in 2022 with the working capital build and flips in 2023? You've shared with us the CapEx side, so I just wanna understand.
Yep.
On the other side of that, so we can see how much debt you can pay back.
No, good question. We will dial back CapEx, I said, to the tune of at least $500 million . We expect a nice pop from an earnings standpoint for all the actions that we're taking. Working capital this year is about a $300 million use, and some of that was intentional, given interest rates in certain areas, how we wanted to manage payables. We will be laser-focused next year on working capital. We've also funded a lot into our pension plans, which if you do that, you kinda get ahead of the pension funding, so you can dial it back a little bit. Our game plan next year is to be focused back on positive free cash flow. The proceeds from Russia, frankly, were better than what we initially anticipated they would be.
That gets us back in the market of buying back our stock, but still de-levering, as we get into 2023.
Can you just address the hedges you have on your floating rate debt and, you know, the sensitivity now and when they start to roll over such that, you know, you'll start reflecting current rates?
Yeah. I think our next biggest. Well, we have a maturity coming up at the end of 2023, a couple maturities, one in U.S. and Europe. Those are the next things we have to deal with. Jeff, in terms of fixed floating today, what do you?
I mean, we still have a pretty heavy bond capital structure. We did increase the term loan. For those of you that didn't see at the end of the quarter, second quarter was when we pushed out our credit agreement for another five years and increased the size of the term loan. That does add that interest rate sensitivity to there. When you do look at our SEC disclosures, you will see that there are some floating to fixed swaps that are out there, but there are also some interest rate options that we hold. All those mature within the next, I think it's two years, whatever we set out there. Some of that happens this year. Some happens next year.
I think we have one question here, and this is gonna be the last one. We'll be milling about outside the room. For the folks on the webcast, I think we got about five minutes. Hopefully we can answer this and ask this within five minutes.
This should be pretty simple. In your 2020 Analyst Day, I think your long-term growth rate for volume in North America was 4%-6%, and so now you're 2%-4%. Maybe Latin America was 5%-8%, and now you're 4%-7%. In general, why have the growth rates gone down? Is it a function of coming out of COVID, and now we're in a different sort of period, or is there another dynamic? In the light of those growth rates coming down, why hasn't the overall growth rate come down in your expectation?
North America is just a much, much bigger marketplace right now, right? $115 billion-$142 billion. Growing at a lower end of that range. These numbers also reflect, and correct me if I'm wrong, these are ex-Russia. The growth rate on Europe will be able to eclipse off of a lower base. South America and Europe, we believe, are gonna grow at those rates. At that rate, I think those are our biggest opportunity sets relative to refillable glass in South America, transitioning to cans in the other countries that we're in. Keep in mind, we have a South American business. We don't have a Brazil business. Yes, it's the majority of our volume, but our opportunity set is diversified.
In many of those areas, you can have far greater growth rates as you're transitioning out of a refillable glass bottle market. As the team has referenced, the regulations are faster and firmer in Europe. The investments by our customers are faster in terms of can filling lines. We believe those markets are gonna grow probably closer to the higher end once we get through this unstable short period of time, and that's gonna pull us into those longer term growth rates.
Okay, thanks.
With that, I just want to again thank everybody. It's great to see folks in person. I wanna thank the panel. Super blessed and proud to be associated with this team. I think hopefully you're taking away that we've got our feet under us. We understand what's happening in the world. We're meeting the world where it's at. We're gonna do that through the prism of EVA, our Drive for 10 mindset and culture, and hopefully, we're gonna change the world. Thank you all for being here, and safe travels going home. Very much appreciate your time and attention here, and your enthusiasm and your questions. Thank you.