MEXICO'S PACKAGING

MACHINERY MARKET TRENDS

AND FORECAST 2023-2024
An Analysis of Market Opportunities
for Packaging Machinery Manufacturers
EXECUTIVE SUMMARY

12930 Worldgate Dr. | Suite 200 | Herndon, VA 20170 USA

Mexico’s Packaging Machinery
Market Trends and Forecast
2022-2023
An Analysis of Market Opportunities for
Packaging Machinery Manufacturers

PMMI The Association for Packaging and Processing Technologies

12930 Worldgate Drive, Suite 200 | Herndon, VA 20170
Phone: (571) 612-3200 | pmmi.org/research

Publication Date: May 2023

Jorge Izquierdo, Vice President, Market Development, PMMI

© Copyright 2023 PMMI, The Association for Packaging and Processing Technologies, Inc. All rights reserved. The information contained herein
shall not be distributed or shared by the recipient. No part of this document may be reproduced without the express written permission of PMMI.
CONTENTS
6 • INTRODUCTION

8 • EXECUTIVE SUMMARY

12 • SNAPSHOT INDICATORS

13 Economic

15 Retail Sales

17 Consumer Confidence

18 • MEXICO'S PACKAGING MACHINERY MARKET OVERVIEW

19 Market Size

21 Recent Investments & Drivers

26 Demand Sectors and Key Buyers

36 Segmentation by Origin

37 Segmentation by Machinery Type

40 • UPCOMING OPPORTUNITIES

40 Industry Sentiment and Operational Priorities

44 Relevant Purchasing Decision Factors

46 Packaging Trends

49 Investment Announcements

50 2023-2024 Forecasts

52 • RECOMMENDATIONS FOR PMMI MEMBERS

 Introduction

This report presents a summary of findings from a survey with 116 packaging and
processing machinery users and interviews with 35 CPGs and relevant chambers and
associations from the packaging, food, beverage, personal care and pharmaceutical
industries in Mexico. In addition to the survey and interviews, the report incorporates in-
depth analysis of economic and packaging machinery trade data.

The purpose of this report is to analyze recent industry trends, investment plans and
outlook sentiment, as well as perceived challenges and changes in machinery purchasing SURVEY WITH
decision-making processes. The report also includes a forecast of expected industry
performance for 2023-2024 and recommendations for PMMI members to approach
prospective buyers and capitalize on opportunities.
116
packaging and
processing
Most respondents were consumer packaged goods manufacturers (CPG’s) and packaging machinery users
companies of various sizes, which form a representative sample of the demand industries.

The survey and interviews, conducted between February and March 2023, were designed
to identify recent and upcoming investment plans and projects, significant issues driving
or inhibiting planned machinery investments, major factors influencing supplier selection,
+
operational priorities and machinery origin preferences.

Under its Vision 2030 initiative, PMMI identified four key challenges that North American
packaging and processing machinery users are facing: sustainability, workforce,
remote access and predictive maintenance. These topics were addressed with survey
respondents to identify how these challenges are impacting CPGs in Mexico. 35
interviews
Finally, respondents were asked to provide recommendations for packaging and
processing machinery manufacturers. A summary of these is included in the “User
Recommendations for PMMI Members” section of this report.

6 2023-2024 PMMI Packaging Machinery Opportunities in Mexico

Survey Respondents by Industry Survey Respondents by Size

10%
30% 20%

17%
49%
4%

12%
17% 36%
16%
20%

n Food n Personal Care n 1-99 n 1,001-9,999

n Beverage n Household n 100-499 n 10,000 or more
Chemicals
n Pharmaceutical/ n 500-1,000
Medical Devices n Others

* Household chemicals companies were grouped

in the “others” category for analysis.
 Executive Summary

8 2023-2024 PMMI Packaging Machinery Opportunities in Mexico

In 2022, Mexico’s packaging and processing machinery market posted record-breaking
demand, with its highest growth rate in more than 20 years. The market hit a record value
estimated at US$906 million, an impressive 25% jump over the previous year.

In 2022,
Packaging and Processing
machinery had an impressive Such strong growth has
jump of been surprising since
Mexican economy is
25% still experiencing
over the previous year

Rising Inflation
Packaging machinery hit a
record value at

US$926 mn
Interest Rates

Mexico continues to rely primarily on imported Imported machinery supplies

88%
machinery, which is estimated to supply 88% of total
demand, while local manufacturing has increased
and Mexican and international companies with a
manufacturing presence in Mexico continue to expand of total demand
operations. CPGs remain preferential to Italian, German
and U.S. machinery for most of their packaging CPGs remain preferential to
operations. Total packaging machinery imports reached
US$797 million in 2022, 24% more than the year prior.

Such strong growth has been surprising considering that

the Mexican economy barely recovered to pre-pandemic
levels by year-end 2022 and, like the U.S. economy, is
experiencing rising inflation and interest rates. Germany Italy U.S.

Impressive machinery market growth is explained by

the demand surge that most Mexican CPGs are Total packaging machinery
experiencing in both the domestic and international imports reached
markets, as well as by many projects that were
postponed due to the uncertainty caused by the
pandemic and later by the Russia-Ukraine conflict.
When CPGs decided to move projects forward, available
packaging machinery was scarce as manufacturers were
responding to pent-up-demand.
US$797 mn
2023-2024 PMMI Packaging Machinery Opportunities in Mexico 9
 In addition to changing consumer habits, a key factor in the consumer products demand surge is the US$91 billion+
flowing into the Mexican economy from remittances (US$58.5 billion) and social programs (US$32.8 billion). Consumers
use much of these funds to purchase packaged goods of all types.

In 2022, for the second consecutive year,

retail sales grew at double digits while 18%
food and beverage manufacturing posted increase according to
an impressive official data

In addition to local demand strength,

agri-food exports increased 12%
in 2022, reaching a record high of
US$50.1 billion. Slightly less than half
of Mexico’s agri-food exports consist Agri-Food imports
of consumer-packaged products,
including beer, tequila, mezcal, bakery
increased
Agri-Food exports
and confectionary items, chocolates,
preserves and sauces, among others. increased 19%
Agri-food imports also posted a
significant jump, increasing 19% to
12% significant
jump to
US$44.3 billion. Agri-food imports, reaching a
primarily consisting of bulk products
packed for consumption in Mexico
record high of US$44.3bn
US$50.1bn
such as grains, poultry, pork and
dairy products, also fuel packaging
machinery demand.

For 2023-2024, demand is expected to remain strong. Although increased inflationary pressures and volatile indicators on
the economic front are impacting purchasing power and consumer confidence, packaging machinery investment demand
continues to outweigh these inhibitors.
The beverage sector was the top packaging machinery investor in 2022, with strong investments from companies such
as Constellation Brands, various soda bottling groups and tequila and mezcal manufacturers. Investment expectations for
the next few years remain strong, indicating that this sector will continue jockeying for position against the food industry,
which typically is at the head of the investment pack.
The food sector is expected to remain dynamic, with new capacity expansion projects, new product launches requiring
machinery investments and new – more sustainable – packaging materials, resulting from internal company policies
as well as retailer demands and upcoming regulatory changes. Mexico’s federal government is finalizing a “Consumer
Packages Law”, which will mandate the use of recyclable or biodegradable materials and extend responsibility over
packaging waste to manufacturers.
In the pharmaceutical and medical devices sector, demand will stem from leading pharmaceutical group investments
and medical device companies expanding manufacturing operations into Mexico. The nearshoring policies of many U.S.
companies are driving strong investments in this sector and this trend is expected to continue over the next several years.
The personal care/ home care segment has also been very dynamic, as companies moved forward in 2022 with
investment projects placed on hold during the COVID pandemic. Demand was nearly 50% higher than usual. As inflation
has a higher impact on cosmetics and high-value personal care products, this sector is likely be more conservative with
investments in 2023-2024.
Across all industries, automation is driving new machinery spending. Higher labor costs resulting from minimum wage
increases, government regulations granting more vacation time and contracting policy changes making it difficult to
hire temporary labor are motivating companies to automatize processes previously conducted manually. After capacity
expansion, automation ranked as the second most important future investment driver.

10 2023-2024 PMMI Packaging Machinery Opportunities in Mexico

Finally, the current strength of the Mexican
Peso is fueling investments. Although
some companies are being cautious or
even placing investments on hold due to
global recessionary risks and persistent
high inflation, others are moving forward
as the current exchange rate offers a
significant discount (10-15%) on imported
machinery purchases.
The near-term outlook for CPG investments
is positive, albeit slightly more conservative
than in 2022. 63% of CPGs anticipate 2023
investments to be like those of 2022, 23%
plan to invest more and 11% intend to
make fewer or smaller investments.

CPG investments for 2023

23% 11%
plan to plan to invest
invest more fewer or smaller

Sustainable and reusable packages, smaller

pack sizes, e-commerce friendly packaging,
and a broader offering of factory pre-packed
proteins and vegetables are among key
trends that will stimulate new projects and
machinery investments. Daypacks and
re-sealable bags continue to penetrate new
industry segments.
Although we expect the Mexican packaging
machinery market to remain strong in 2023,
the economic situation in the U.S. and global
markets will significantly impact overall
performance. If the U.S. enters a recession
and the Mexican Peso loses strength,
machinery demand could decelerate toward
the end of 2023 and in 2024.
CPGs were asked to provide general
recommendations to packaging machinery
manufacturers, which are detailed in the
final chapter of this report.

2023-2024 PMMI Packaging Machinery Opportunities in Mexico 11

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­­LEARN MORE!
Visit pmmi.org or contact
Jorge Izquierdo, VP of Market
Development, at 571-612-3199 or
PMMI’s Global Marketing Reports jizquierdo@pmmi.org

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