MEXICO CITY, Mexico – Key trends in the Mexican packaging market include retailer requests for “custom” packaging and private-label goods, sustainability, new business practices and the country’s evolving dietary habits, according to a recent report from the Packaging Machinery Manufacturers Institute (PMMI) titled "Winning Sales Strategies for the Mexican Market Report".
These and other factors lead to approximately $500 million in annual packaging machinery imports to Mexico; local suppliers satisfy the remaining 15 to 20 percent of demand.
PMMI conducted a series of surveys in late 2011 among packaging machinery distributors, agents and local dealers who represent and/or sell international brands in Mexico for this study.
Mexico’s largest retailers are merging with or acquiring competitors, as well as smaller players. In addition to requesting packaging that is customized to store formats, retailers are increasingly demanding packaging that will allow them to offer a product that is different from the competition’s.
Small- and medium-sized suppliers, in particular, that can meet these requirements gain easier access to the retailers. As a result, consumer packaged goods companies (CPGs) are looking for machinery upgrades that add versatility and flexibility to meet changing client demands.
More self-branded products are being launched by mass merchants, even private-label versions of premium products. As a result, private-label products account for an estimated 6 percent of Mexican retail sales. This trend is affecting food and beverage manufacturers internationally.
Mexican manufacturers facing more competition from retailer brands are discovering that product differentiation is essential to attracting customers who are lured by an increasing amount of lower-priced alternatives. Although they may choose to differentiate products themselves, especially when it comes to generic products, packaging differences are often times the most financially viable alternative.
More retailers are requesting more sustainability information, such as measuring carbon footprints and specs on packaging materials’ recyclability. Such policies are causing manufacturers to investigate using different packaging materials plus machinery that can handle these lighter, softer and more recyclable materials.
Mexican companies modernizing business practices with tools such as Balanced Scorecard and Kaizen and Business Intelligence, are also investing in the software and technologies that will make processes more efficient. In many cases, distributors say applying these business practices and systems translates into modernized infrastructure because manufacturers realize they can make better use of resources by investing in more efficient packaging processes.
Mexico, with a population totaling 112.3 million, continues growing above 1.2 percent per year -- and this growth has been higher in urban areas. More Mexican consumers are eating meals at work or buying pre-cooked or packaged foods as opposed to bringing lunch from home. Demand for packaged and prepared foods is estimated to grow by more than 6 percent annually; this growth is also driving packaging and processing machinery sales.
The need for innovative packaging and processing machinery and world-class solutions is on the rise throughout Latin America, said Jose Martinez, director of PMMI’s Latin America office.