Packaging giant Berry Global Group reported strong first-quarter sales and growth despite the global COVID-19 pandemic halting several markets.
The Evansville, Ind.-based company had nearly $3 billion in net sales in the second fiscal quarter, which it highlighted during its quarterly earnings call May 1.
The company cited its acquisition of RPC Group plc, a United Kingdom-based packaging supplier, for holding much of the sales and operating income growth for consumer packaging globally. The company had $1.1 billion in net sales. Berry acquired RPC in July 2019 for $6.1 billion.
However, Berry also cited organic growth from existing businesses.
Its health, hygiene and specialties division led the organic growth with just more than 3 percent, which put the growth ahead of expectations amid production for essential COVID-19 materials and products. Overall, Berry reported 2 percent of organic volume growth for the quarter.
Engineered materials organic volumes were up about 2 percent as well.
The impact of COVID-19 had about a 1 percent effect on volumes in the quarter.
However, health, hygiene and specialties saw a 10 percent decrease in net sales because of lower resin prices. Engineered materials also saw a negative impact of 3 percent, also because of the lower resin prices.
Chairman and CEO Tom Salmon said the company is deeply involved in COVID-19-related materials and products.
Berry has been making gowns, drapes and covers for health care markets, disinfectant wipes and containers, masks and food packaging. End markets like automotive, meanwhile, have slowed.
Though the company did see softening in the foodservice and industrial markets because of COVID-19 measures. Foodservice marks about 20 percent of Berry's portfolio, with drive-through windows being a large component of the mix.
The company is taking into account the stay-at-home restrictions, while still hoping for incremental improvement as consumers come back to work and dining-in becomes available again.
"Reality is, we continue to see strong growth in our food businesses," Salmon said on the call. "The pipeline for opportunities ... in those categories, specifically, continue to grow and be very robust and that's why as we've said the impacts of COVID are clearly transitory and we feel very comfortable that these businesses will pivot on to grow post-COVID. The pipeline of opportunities on deck substantiates that outlook."