End Users Give Mixed Signals on U.S. Packaging Machinery Purchase Trends

Packaging Machinery Purchase trends vary by sector, with industries like beverage and pharma showing greater production expansion than others.

The pharma sector holds the highest production expansion investment levels in 2023, with several large manufacturers announcing investments in the billions.
The pharma sector holds the highest production expansion investment levels in 2023, with several large manufacturers announcing investments in the billions.
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The uncertainty surrounding today’s U.S. economy has led to more conservative packaging machinery purchase behavior among CPGs, but some sectors are bucking the trend.

That’s according to PMMI Business Intelligence’s “2023 State of the Industry” report. The announced production expansion plans by the largest end-users across food, beverage, household, personal care, pharmaceuticals, and others show some sectors are behaving more conservatively than others.

The food sector holds the largest share of shipment value, but economic uncertainty may lead to dampened market growth through 2024.The food sector holds the largest share of shipment value, but economic uncertainty may lead to dampened market growth through 2024.PMMI Business Intelligence: 2023 State of the Industry

Packaging Machinery Purchase Trends in Food

The food sector holds the largest share of 2022 packaging machinery shipments by industry at 43%. It also holds the largest shipment value for 2022 at around $4.3 billion, with a 2027 value forecast closer to $5.6 billion.

There are a few instances of large, planned expansions which were announced in 2023, notably Tyson’s $1.3 billion investment, which it plans to see through by 2027.

However, this is the exception. PMMI Business Intelligence researchers believe food manufacturers are in a holding pattern given the current economic uncertainty. This will likely dampen market growth through 2024.

Beverage Sector Growth

The beverage sector showed a higher number of planned investments announced in 2023 when compared to the food sector.

However, the scale of investment was lower than other sectors. As a result, growth for this sector is still only moderate through the 2027 forecast period.

The beverage sector’s share of packaging machinery shipments by industry is 15%. The sector’s total shipment value in 2022 was around $1.7 billion, with a 2027 projection of around $1.9 billion.

Pharmaceuticals Surge

Business Intelligence researchers expect pharma packaging machine shipments to increase in the next year.Business Intelligence researchers expect pharma packaging machine shipments to increase in the next year.PMMI Business Intelligence: 2023 State of the IndustryThe pharmaceutical sector announced the highest production expansion investment levels during 2023.

Its share of packaging machinery shipments by industry sits at 11%, with a 2022 shipment value of about $1.1 billion. Its 2027 shipment value forecast is around $1.5 billion.

A large portion of the biggest pharmaceutical manufacturers have announced capacity expansion in the billions, with most investments going toward expanding capacity in North Carolina.

This has pushed Business Intelligence researchers’ projected growth of packaging machine shipments to the pharmaceutical sector up through 2024 when compared to others.

Household, Industrial, and Agricultural Chemicals

The chemical sector tends to be among the more volatile in terms of growth. The large capital requirements for production expansion led to “boom and bust” times for machine builders serving the space. 

The amount of investment planned by large chemical suppliers sits in the middle of the road compared to other sectors. The sector’s 2022 packaging machinery shipment share was 13%, with a shipment value of about $1.4 billion and a 2027 projection of around $1.6 billion.

Several large industrial chemical suppliers announced heavy investment in 2023, but the portion of these investments that will materialize as packaging machine sales is likely small.

Business Intelligence researchers believe that 2022 will be the last boom year of the cycle for chemical production. Resultingly, the forecasted growth of machine sales to chemical producers underperforms the market average from 2023 through 2027.

Personal Care, Toiletries, and Cosmetics

Like the food sector, investments by manufacturers active in the personal care, toiletries, and cosmetics sector have been slow in 2023.

The cosmetics portion of this sector is particularly struggling. Very little investment activity is present among major cosmetic suppliers in the U.S., and there is at least one example of operations being moved out of the country with cosmetics company Avon.

As a result, sector growth was sluggish in 2023, underperforming compared to the rest of the market.

The sector’s share of 2022 packaging machinery shipments by industry was 5%, with a shipment value of around $700 million. Its 2027 projected value is around $850 million.

There are bright spots, however. Unilever, the manufacturer of Dove products, announced a $400 million investment into nearshoring its production to Mexico during 2023. This signals that portions of the market are still investing despite economic struggles.

Source: PMMI Business Intelligence: 2023 State of the Industry

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