Mexico - Country Commercial Guide
Packaging Machinery Industry

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-02

Mexico’s overall demand for packaged goods production has been boosted by changes to consumption habits—driven in large part by the COVID-19 pandemic—for sanitary, medical, and personal care products, as well as the tightening of food sanitary standards. The market for packaging machinery to handle bulk products has shrunk as a result of intermittent closings in the food service and hospitality industries (restaurants, bars, etc.), as Mexican health authorities have sought to control the spread of COVID-19. Nonetheless, demand at the retail and individual level has increased significantly. For all these reasons, packaging machinery and processing equipment remains a best prospect industry for U.S. exporters in Mexico. This section includes a market overview and trade data on the sector.

Overview

The Mexican packaging machinery market is very dynamic and it continues to grow and diversify with the Mexican economy. Primary (processing) and secondary (handling) packaging equipment purchases have been growing about five percent per year, due in part to strong foreign direct investment in the food processing industry. The packaging machinery industry provides good opportunities for U.S. exporters. According to the Packaging Machinery Manufacturers Institute (PMMI), Mexico is the second-largest buyer of U.S. packaging equipment, with Germany and Italy serving as other important suppliers.

In 2019 and 2020, Mexico saw a dramatic decrease in packaging and processing machinery acquisition, mostly driven by perceived political instability, unclear government policies, and heightened risk concerning foreign direct investment, exchange rate fluctuations, and the slowdown of the economy as a result of the global pandemic. Despite these developments, U.S. suppliers have remained competitive in this industry, and we recommend continued action to maintain market share.

According to PMMI, in 2021, Mexico is projected to increase imports of packaging machinery and equipment by 15 percent from the world, with a 9 percent increase from the United States. This growth will likely be driven in large part by the reactivation of the Mexican economy after the COVID-19 pandemic subsides.

The table below shows Mexico’s packaging machinery imports. Mexico Packaging Machinery Market Size*
(Figures in USD millions)

 

2016

2017

2018

2019

2020

Total Imports

696.1

757.6

764.1

390.35

402.02

Imports from the U.S.

182.8

150.9

155.00

98.49

95.92

Exchange Rate**

N/A

N/A

N/A

N/A

N/A

*This table covers Mexican packaging machinery imports
**Data originally reported in USD
Source: Association for Packaging and Processing Technologies (PMMI) with Mercado Integrado Latinoamericano (MILA), Mexican Customs, and Secretariat of Economy

In 2019, the packaging material production industry represented 1.7 percent of Mexico’s GDP, 5.8 percent of the industrial sector GDP, and 8.5 percent of manufacturing GDP. In terms of 2019 volume, Mexico produced 12.8 million tons of packaging containers and packaging materials with a value of USD 16 billion.

Market Entry

The best way for U.S. suppliers of packaging machinery to enter the Mexican market is through representation or regional distribution with a partner that can offer after-sales service, maintenance, and spare parts on-site and in Spanish.

Barriers

U.S. packaging exporters have faced several challenges in Mexico over the last few years, and 2021 will be no exception. Competition in this sector is increasing, and a strong dollar makes U.S. equipment more expensive vis-à-vis European equipment (though cost is often secondary to other purchasing decisions). Because of tightening domestic markets, European and Asian companies are increasingly offering customization and payment terms to compete and gain market share in the Mexican packaging machinery sector. Offering financing options to Mexican buyers greatly enhances the competitiveness of the offerings from U.S. packaging machinery manufacturers.

Mexican small- and medium-sized companies tend to perceive U.S.-made equipment as designed only for large-scale production. Additionally, they believe that U.S. companies have rigid sales policies which do not allow for customization. Finally, Mexican buyers believe that U.S. industrial equipment generally has higher-than-average energy consumption. These perceptions create specific hurdles for U.S. equipment sales.

Leading Sub-Sectors

According to the Mexican Association for Bottling and Packaging (Asociación Mexicana de Envase y Embalaje or AMEE), plastic is the most dynamic material used by all industries that utilize packaging products, having a constant growth of its market share on the last five years.

Mexico Packaging Material Demand by Type

Packaging Material

Percentage Demand

Paper & Cardboard

32.7%

Plastic

29.3%

Glass

19.5%

Metal

18.1%

Wood

0.4%

Source: AMEE

Concerning end-use segments for packaging equipment, the food and beverage industries exhibit the greatest demand for packaging materials, representing 58 percent of Mexican packaging machinery imports by value. This is followed by machinery for general packaging (14%), for personal care products (7%), and for pharmaceuticals (6%).

Opportunities

Major opportunities for U.S. companies exist in processing equipment and materials for the food and beverage industry, for plastic container manufacturers geared towards the personal care industry, and for cleaning and sanitizing products. The U.S. Commercial Service in Mexico is happy to assist you in exploring opportunities in this sector.

Mexico’s market evolution is leading to demand for higher quality materials and higher standards of production in the packaging sector. For instance, 63 percent of food products utilize flexible packaging which is recording growth rates of over 10 percent per year. Companies involved in food processing and agribusiness (Tyson, Bachoco, Driscolls, Sunny Ridge, etc.) are demanding better and greener packaging technology. In most cases, flexible packaging is designed to help extend the shelf life of food products or to fulfill other market trends such as higher quality graphics. In addition, major retailers such as Walmart often demand that packages take up less space on the shelf. Innovation and flexibility are key to acquiring a competitive edge in packaging machinery sales in Mexico.

Many companies are looking at glass packaging, given its competitive prices compared to plastic containers, as well as its more environmentally friendly manufacturing process.

Despite the relatively high cost of European packaging machinery products compared to U.S. equipment, Mexican companies regularly choose European solutions due to the barriers mentioned above, stronger after-sales service from European service centers in Mexico, and the flexible financing options that European competitors provide. This leads some Mexican customers to adapt European equipment to local needs rather than choosing what may be a better priced and better designed U.S. solution for the Mexican market.

U.S. firms should keep these critical points in mind, while continuing to take advantage of the U.S. reputation for innovative technology, geographic proximity, and the close bilateral trade relationship.

Resources

Organizations

  • Packaging Machinery Manufacturers Institute (PMMI)
  • Mexican Packaging Association (AMEE)
  • Institute of Packaging Professionals (IOPP)
  • Mexican Institute of Packaging Professionals (IMPEE)
  • Chamber of the Food Industry of Jalisco (CIAJ)
  • Centro de Innovación Diseño Empaque (ABRE)

Magazines

  • Enfasis Packaging
  • El Empaque + Conversion
  • EnvaPack
  • Industria Alimenticia

Organizations

  • Packaging Machinery Manufacturers Institute (PMMI)
  • Mexican Packaging Association (AMEE)
  • Institute of Packaging Professionals (IOPP)
  • Mexican Institute of Packaging Professionals (IMPEE)
  • Chamber of the Food Industry of Jalisco (CIAJ)
  • Centro de Innovación Diseño Empaque (ABRE)

Magazines

  • Enfasis Packaging
  • El Empaque + Conversion
  • EnvaPack
  • Industria Alimenticia

Events

  • Pack Expo Las Vegas, Las Vegas, Nevada 
  • Expo Pack Mexico, Mexico City
  • Pack Expo International, Chicago, Illinois

Contacts

For more information on the packaging machinery sector in Mexico, please contact:

Juan Herrera

Commercial Specialist

U.S. Commercial Service—Guadalajara

Tel.: +52 (33) 3615-1140 ext. 103

Juan.Herrera@trade.gov