2020 was “a crazy year for CPGs,” said Jorge Izquierdo, PMMI’s vice president of market development, said at a press briefing on the first day of PACK EXPO. All signs point to the next few years being just as crazy, for CPG manufacturers as well as their suppliers.
The packaging industry grew 14.4% in 2020, reaching $12.3 billion. Counting domestic shipments only, the increase was 14.7%, to $9.4 billion. “That’s a record number in terms of growth,” Izquierdo said, noting that the typical annual growth rate is 5-6%. Food and beverage are the top two industries driving this growth, with filling and end-of-line equipment (case handling, palletizing, etc.) representing the top categories.
The industry is also facing a $3.14 billion backlog, driven by challenges including the labor shortage, which has been an ongoing problem in manufacturing. Izquierdo said that about 10 years ago, manufacturers started noticing the workforce was a challenge, five years ago the challenge started to become significant, and the last year “has been unbelievable.”
To maintain productivity, CPG manufacturers have been investing heavily in automation. They’re looking for equipment that is intuitive, as well as support options such as remote service and remote training.
The second biggest challenge right now is the supply chain. “On top of increasing demand, instead of getting components in 2 weeks, now [it takes] 2 months,” Izquierdo said. He noted that these challenges are affecting everyone in the industry and that companies are working hard to keep lead times as short as possible.
Looking into the future, PMMI predicts the strong growth will continue. 2021 will likely be another double-digit growth year, Izquierdo said, with 2022 and 2023 expected to be “very healthy” as well. According to PMMI’s State of the Industry US Packaging Machinery Report, packaging machinery shipments could reach $12.8 billion 2026.
Perhaps the biggest question going into PACK EXPO was if people would show up. The answer is yes — the show floor was bustling and all of the exhibitors I talked to said they were very happy with the traffic to their booth. As of Day 2, there were more than 22,500 registered attendees (not counting exhibitor staff) — predictably down from the two most recent shows (2017 and 2019), but still significantly more than PMMI’s goal of 20,000.