Glass Packaging Institute – Industry Update Mike Smaha Owens-Illinois, Inc. Virginia Recycling Association 2012 Annual Conference May 16, 2012 Glass is ENDLESSLY Recyclable

About the GPI  9 member companies, 35 associate supplier members. 48 glass container plants in 22 states comprise a $5.5 billion dollar industry  102 glass container furnaces produce approximately 30 billion glass food, beverage, cosmetic, spirits, wine, and beer containers annually  The industry employs approximately 18,000 employees nationwide

U.S. Glass Container Industry Sales Volume Overview 3 CategoryTrend % Change (2011 v 2010) % Change (2010 v 2009) % Change (2009 v 2008) Food-1.7%-1.0%-2.2% Beverage-2.2%-6.2%-10.0% Beer-1.8%-8.0%-2.3% Liquor-0.5%-0.6%-0.3% RTD Liquor-0.7%-10.2%-3.6% Wine7.1%7.0%-2.1% Other-15.1%0.1%7.6% Total-1.2%-5.4%-2.8% Source: Dept of Commerce, MINIMAX – assumes 90% reporting Arrows indicate the comparison of 10:11 compared to 09:10

U.S. Glass Container Industry 2011 Overview 4 Source: Dept of Commerce, MINIMAX – assumes 90% reporting GrossTons

U.S. Glass Container Industry Market Overview – Beverage Convenience On-the-go trend Increase in concentrates – Liquid and powder – Water additives Sports and Energy Drinks Beverage CAGR ( ): 0.9% Glass is 2% of packaging Health concerns = OPPORTUNITY! – Water in plastic vs refillable – Healthy beverage options (diet, low calorie) 5 Source: Euromonitor

U.S. Glass Container Industry Market Overview – Beer Consumers continue to show interest in craft brews Larger companies looking to innovation for growth – Bud Light Platinum – blue bottle – Miller Lite – Vortex TM bottle Beer CAGR ( ): -0.2% Glass is 48% of packaging Taste Preference = OPPORTUNITY! Craft Beer = OPPORTUNITY! – breweries operating in 2011 and over 900 new breweries in planning as of December Source: Euromonitor, Brewers Association

U.S. Glass Container Industry Market Overview – Liquor/RTD Growth in white spirits Consumers enjoying liquors for mixed drinks – Innovative flavors – Brand extensions Brands seeking shelf recognition through – Bottle design, textures, color, decorating RTD’s showing slight growth Spirits/RTD CAGR ( ): 1.0% Glass is 60% of packaging Bottle design = OPPORTUNITY! New product introductions = OPPORTUNITY! 7 Source: Euromonitor

U.S. Glass Container Industry Market Overview – Wine Sweet wines attracting younger generations Wines priced above $9 grew most quickly in 2011 Wine CAGR ( ): 2.5% Glass is 77% of packaging Consumer preference = OPPORTUNITY! New product introductions = OPPORTUNITY! 8 Source: Euromonitor

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 First Objective: –Preserve U.S. jobs in an “Energy Intensive, Trade Exposed” environment:  Improve global competitiveness  Reduce foreign energy dependency  Support improved materials management models, many of which currently face serious economic and performance challenges GPI Industry Recycling Goals: Achieve 50% Recycled Content by 2013

2010 U.S. Glass Container Recycling Rates  41.4% of beer and soft drink bottles  24.7% of wine and liquor bottles  18.1% food and other bottles/jars  And 33.4% all glass containers *The unknown factor here is the end market for these collected “recyclables” Source: U.S. EPA

 Partnerships with stakeholders to improve glass recycling/recovery rates  Improved data collection/analysis  Effective legislative initiatives at federal and state levels  A single-stream recycling best practices “SWOT” analysis, including processing technologies  Expanded bar, restaurant, and hotel collection programs  A consumer glass recycling “ethic” To achieve goal must improve the quantity and quality of recovered recycled glass: Achieving the Goal