Mexico’s overall demand for packaging machinery and materials has been high and has returned to or superseded pre-pandemic levels. Contributing to this trend are changes to consumption habits—driven in large part by the COVID-19 pandemic—and growth in the need for sanitary, medical, and personal care products, as well as the tightening of food sanitary standards, and the increasing eCommerce.

Overview

The Mexican packaging machinery market remains dynamic (total market value of USD 567 million in 2021, 89 percent of which is imported) and continues to grow and diversify with the Mexican 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. The packaging machinery industry provides good opportunities for U.S. exporters, given their reputation for innovative technology and geographic proximity. 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.

After two record breaking years Iin 2017 and 2018, Mexico saw a dramatic decrease in packaging and processing machinery acquisition in 2019 and 2020, mostly driven by perceived political instability, unclear government policies, heightened risk concerning foreign direct investment, exchange rate fluctuations, and the slowdown of the economy as a result of the global pandemic. That said, the industry has continued to grow slowly at an average of 3-5 percent per year.

According to PMMI, in 2022, Mexico is projected to increase imports of packaging machinery and equipment by 3 percent. This growth will likely be driven in large part by the

investments in the agribusiness (packaging for animal proteins, fruits, and fresh produce, as well as demand for e-commerce and animal and plant health applications), pharmaceutical (packaging for COVID and sanitary applications, as well as growing demand for vitamin supplements and minerals as a result of demand for health-conscious products), beverages, and personal care industries (environmentally friendly packaging solutions). In 2020, Mexico produced 13.4 million tons of packaging containers and packaging materials with a total estimated value of USD 19 billion.

*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

Market Entry

The best way for U.S. suppliers of packaging machinery to enter the Mexican market is by securing a local or regional representative that can offer after-sales service, maintenance, and spare parts on-site and in Spanish. Although price continues to play an important role in the decision to purchase a U.S. company’s products, reliability, trust, and relationships are becoming ever more relevant to Mexican buyers.

Barriers

U.S. packaging machinery exporters face stiff competition and a strong dollar makes U.S. equipment more expensive vis-à-vis European equipment (though cost is often secondary to other purchasing decisions). Mexican companies regularly choose European solutions as a result of stronger after-sales service from European service centers in Mexico, and European and Asian companies are increasingly offering customization and payment terms to compete and gain market share in the Mexican packaging machinery sector. 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. 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 sellers of U.S. equipment.

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 and has experienced constant growth in market share in recent years.

Source: AMEE

Concerning end-use segments for packaging equipment, the food and beverage industry accounts for 50 percent of Mexican packaging machinery imports by value. This is followed by machinery for use in the personal care (15%), house products and appliances (15%), pharmaceuticals (10%), and general packaging (10%) industries.

Opportunities

Major opportunities for U.S. companies exist in processing equipment and materials for the food and beverage industry, for plastic container manufacturers geared toward 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.

Mexican packaging machinery users are demanding higher quality materials and compliance with more advanced 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 materials. In most cases, flexible packaging is designed to help extend the shelf life of food products or to comply with other marketing trends, such as higher quality graphics. In addition, major retailers such as Walmart often demand that packages take up less space on the shelf. Many companies are more seriously exploring glass packaging options, given its competitive prices compared to plastic containers, as well as its more environmentally friendly manufacturing process. This includes the continued increasing demand for custom glass bottles driven by the worldwide growth in consumption of tequila and mezcal. Innovation and flexibility are key to acquiring a competitive edge in packaging machinery sales in Mexico.

Several major investments have been announced in Mexico that are indicative of projects likely to drive near-term demand for processing and packaging equipment:

• Constellation Brands will invest USD 1.3 billion in a new brewery in Veracruz with an initial production capacity of 20 million of hectoliters scalable to 35 (total construction time; 4 years). This is in addition to the regular modernization of their existing plants.
• Grupo Bimbo will invest USD 750 million in its Mexico operations in 2022.
• Diageo will invest USD 500 million to increase its production and bottling of tequila in the state of Jalisco.
• Unilever will invest USD 275 million to increase its current capacity in four plants between 2021 and 2024
• Arca Continental will invest USD 231 million in bottling and logistics projects.
• Nestle will invest USD 160 million to expand its pet food plant in Guanajuato.
• Sanofi will invest 129 million Euros in modernizing and expanding its the State of Mexico.

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 en Diseño de Empaque (ABRE)      

 

Magazines                                                                                           

Enfasis Packaging                                                                            

El Empaque + Conversion                                                             

EnvaPack                                                                                             

Industria Alimenticia                                                                     

Events

• Pack Expo International, October 23-26, 2022, Chicago, Illinois Expo Pack Guadalajara, June 13–15, 2023, Guadalajara, Jalisco
• Pack Expo Las Vegas, September 11-13, 2023, Las Vegas, Nevada

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