Packaging machinery: opportunities in Mexico

The Mexican packaging machinery market is dynamic in Mexico, and had a total market value of US$567 million in 2021, highlighted the U.S. Department of Commerce.

Of that total amount, 89% is imported.

In 2019, the packaging material production industry accounted for 1.7% of Mexico’s GDP, 5.8% of industrial sector GDP and 8.5% of manufacturing GDP.

From the Department of Commerce’s perspective, the packaging machinery industry offers good opportunities for U.S. exporters, given its 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 as other major suppliers.

Packaging Machinery

The main opportunities for U.S. companies are in processing equipment and materials for the food and beverage industry, for manufacturers of plastic packaging geared toward the personal care industry, and for cleaning and disinfecting products.

Mexican users of packaging machinery demand higher quality materials and compliance with more advanced production standards in the packaging sector.

For example, 63% of food products use flexible packaging, which is growing at a rate of more than 10% per year.

Food processing and agribusiness companies (Tyson, Bachoco, Driscolls, Sunny Ridge, etc.) are demanding better and more environmentally friendly packaging materials.

In most cases, flexible packaging is designed to help extend the shelf life of food products or to meet other marketing trends, such as higher quality graphics.

In addition, large retailers such as Walmart often require packaging to take up less shelf space.

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

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