Mexico - 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: 2020-08-18

Mexico’s already significant packaged goods production has been boosted with the increase in demand (mostly driven by the COVID-19 pandemic) for sanitary, medical, and personal care products, as well as the tightening of food sanitary standards. For all these reasons, packaging machinery and food processing equipment is a best prospect industry sector in Mexico. This section includes a market overview and trade data on the sector.

Overview
The Mexican packaging machinery market is very dynamic as it grows and diversifies 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, 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.

The table below shows Mexico’s packaging machinery imports. U.S. sales in 2015 reflected an historic high for U.S. packaging machinery exports to Mexico—a whopping 35 percent of all Mexican purchases (driven by the investment of a couple of U.S. food and beverage companies). Sales returned to more usual levels in 2016 and 2017. In 2019, Mexico saw a dramatic decrease in machinery acquisition, mostly driven by perceived political instability, exchange rate fluctuations, and a reduction of foreign direct investment due to uncertainty generated by cases such as the Constellation brands plant in Baja California. U.S. suppliers have remained competitive in this industry, and we recommend continued action to maintain market share.

The subsequent table shows Mexican demand for production of packaging materials to highlight the trends relevant for U.S. sellers of packaging machinery. 

Mexico Packaging Machinery Market Size*
(Figures in USD billions)

 

2015

2016

2017

2018

2019

Total Imports

678.1

696.1

757.6

764.1

390.35

Imports from the U.S.

239.4

182.8

150.9

155.00

98.49

Exchange Rate**

N/A

N/A

N/A

N/A

N/A

*This table covers Mexican packaging machinery imports

*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 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 2020 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 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 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: Asociación Mexicana de Envase y Embalaje
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, and for plastic container manufacturers geared towards the personal care industry, and cleaning and sanitizing products. The U.S. Commercial Service 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 production standards 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 environmentally-friendly manufacturing process.

Despite the relatively high cost of European packaging 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.

Web Resources

Organizations

 

Packaging Machinery Manufacturers Institute (PMMI)

www.pmmi.org

Mexican Packaging Association (AMEE)

www.amee.org.mx

Institute of Packaging Professionals (IOPP)

www.iopp.org

Mexican Institute of Packaging Professionals (IMPEE)

http://envaseyembalaje.com.mx

Chamber of the Food Industry of Jalisco (CIAJ)

www.ciaj.org.mx

Centro de Innovación Diseño Empaque (ABRE)

ABRE Website

Magazines

 

Enfasis Packaging

www.packaging.enfasis.com

El Empaque + Conversion

www.elempaque.com

EnvaPack

www.envapack.com

Industria Alimenticia

www.industriaalimenticia.com

Events

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