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Mexico Flexible Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Mexico Flexible Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

  • November 2021
  • 192 pages
  • ID: 6187408
  • Format: PDF
  • Mordor Intelligence LLP

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The Mexico Flexible Packaging Market is expected to register a CAGR of 3.89% during the forecast period from 2021 to 2026. Flexible packaging is rising faster than many other forms. It includes trends like e-commerce, digital printing, and sustainability that can be used to drive market development and growth. Customers in the region are eager to pay more for certain product attributes boosted by flexible packaging.

Key Highlights
Technological innovation, sustainability trepidations, and attractive economics are among the reasons for the remarkable growth of flexible packaging in the last two decades. The way consumers view and interact with packages is altering. Owing to the increasing focus on sustainability, traditional rigid packaging solutions are being substituted by innovative and more sustainable, flexible packaging. The growing market demand for customer-friendly packages and heightened product protection is expected to boost flexible packaging as a viable and cost-effective substitute.
Local trends, such as e-commerce (presence of online marketplaces, such as Amazon, Mercado Libre, and Linio, in Mexico) and digital printing are driving the developments in flexible packaging. Similarly, the growing penetration of end-user verticals and allied demand for product protection has boosted the role of flexible packaging as a viable and cheap option in Mexico. Recent innovations have also made these packages eco-friendly, increased shelf -life, and sustainable. For instance, in July 2020, Mission Produce Inc., with an active presence in Mexico, launched a most advanced avocado network in partnership with Hazel Technologies Inc. The adoption of AvoLast by Hazel, a groundbreaking shelf-life extension program, is expected to keep avocados at a perfect level of ripeness for three extra days on average.
Furthermore, consumers are becoming increasingly aware of the packaging solutions and health benefits of snacks. The demand is primarily driven by taste and health considerations. Also, a greater reliance on ready-prepared nutritious foods is driving the Mexican flexible packaging market in the snack product segment. There is an enormous opportunity to gain market share in the nutritional, portable, and easy-to-eat meal alternative market for the Mexican flexible packaging snack manufacturers. Baked and salted snacks are also showing strong growth, providing vast opportunities for flexible packaging manufacturers in Mexico. Within the salted snacks product group, potato chips, tortillas, and corn chips are the most extensive product segments. An emerging trend in the snack food products observed is the evolution of fruit snacks and nuts with attractive and portable packaging.
The allied market growth of digital printing is also an indication of the country’s growing demand for flexibility. OMET, one of the leading companies in the label and packaging market, is sought after strengthening its presence in Mexico, primarily due to the boosting demand for labels and flexible packaging across digital printing, has been growing globally by installing narrow and medium web printing machines for labels and flexible packaging. For instance, in 2021, Be Packaging, an OMET partner since 2009, located in Benevento (Southern Italy), invested in a new OMET machine, an XFLEX X7, aiming to expand its market share by focusing on print quality, speed, and reliability.
From a broader perspective, the higher tariffs tend to increase costs and prices in the United States, especially for BOPP and BOPET films used in flexible packaging, and this would affect Mexico as a significant supplier of BOPP films to the United States.
Furthermore, the COVID-19 pandemic affected various sectors in Mexico due to the lockdowns imposed by the government, mainly in the first half of 2020. The impact on the production of various product categories and the shut down of retail stores led to an adverse effect on the revenues of major end-user industries in the market. Companies such as Grupo Herdez, a prominent food, and beverage company, witnessed COVID-19 challenges on operations leading to additional expenses.
However, an enhanced and upgraded economic performance in the region, compounded by the growing market demand for customer-friendly packages and heightened product protection, is expected to drive the growth of the market during the forecast period.

Key Market Trends

Pouches are Expected to Hold Significant Share

Pouches are the most widely used in the food and beverage industry, including pet food, baby food, and liquid packaging (tea, coffee, and juices). Moreover, the increasing demand from young customers who prefer to eat out or buy food rather than making it is driving the need for pouches as packaging. Consumers’ expectations from fresh food that stores all the natural properties and aroma drive pouches’ usage in the food industry.
For instance, a coffee product that retains 100% of its flavor and aroma by its time reaches the retail market is preferred over generic processed products. Retaining the flavor and aroma led to the development of pouches that withstand aroma and outside odors throughout the distribution process.
Furthermore, the increasing adoption of pouch packaging for liquids, such as juices, detergents, and edible oil, has seen the emergence of pouches with excellent oxygen-barrier properties to preserve the liquid inside, thus, ensuring that the contents stay uncontaminated. For instance, in November 2020, South Korean leading fresh food company Pulmuone started using Ecolean’s lightweight packaging for its products in the rapidly growing and progressive liquid food market of South Korea. With the beverage industry increasingly consuming pouches, the demand from the market is expected to increase.
Similarly, in February 2020, TC transcontinental, a Montreal-based packaging manufacturer with a presence in Mexico, announced plans to increase post-consumer, recycled content in flexible packaging offerings, such as pouches. It has also begun investments in allied equipment for converting flexible plastics from sorting facilities and other sources.
The durability and convenience of logistics for products packaged in pouches drive the demand for the studied market. Furthermore, the cost-effectiveness of pouches is encouraging manufacturers to opt for pouch packaging, driving the growth of this format of flexible packaging. In addition, the adoption of pouches is driven by the lightweight nature of the structure compared to other traditional packaging formats like PET bottles.

Personal Care and Cosmetics is Expected to Witness Significant Growth

In the current scenario, the cosmetic packaging industry has observed a significant breakthrough with the increasing demand for biodegradable flexible packaging, such as bioplastic. Bioplastics are available for cosmetics package design, mainly derived from renewable biomass like corn, rice, potato, tapioca, sugarcane, or cellulose.
According to the National Chamber of the Cosmetics Industry (CANIPEC) of Mexico, Mexican consumers spend about USD 90 on cosmetic products annually. More importantly, only 10% of that expenditure is done on premium products, and hence there is massive scope for upscaling of packaging as the acceptance of premium products grows.
Furthermore, according to ITA, Mexico is ranked among the top 10 markets in the world for cosmetics and personal care products, and it continues to be the second-largest market for beauty products in Latin America.
Since Mexico has free trade agreements with over 50 nations, the Mexican consumer has been exposed not only to U.S. brands but also to European, South American, and Asian brands. Some of the biggest cosmetic and personal care multinationals such as Procter & Gamble, Unilever, L’Oréal, and Beiersdorf have their manufacturing and distribution facilities in Mexico and use the country as their distribution center for Latin America.
Among product categories, Skincare, haircare, fragrances, and makeup are expected to experience the highest growth during the forecast period. In the previous years, the solar exposure awareness undertaken by CANIPEC contributes to the development of dual functionality cosmetics that cater to the customers’ makeup and skincare requirements.
Furthermore, the demand for hair care products is increasing due to the growing adoption of grooming products and the popularity of beards among men. Representing 20% of personal care in Mexico, haircare is also expected to experience healthy growth during the forecast period.

Competitive Landscape

The Mexico Flexible Packaging Market is moderately fragmented owing to the presence of a significant number of players such as Amcor Flexibles MX, Constantia Aluprint Mexico, Berry Global Inc., Transcontinental Mexico, etc., which occupy the majority of the market share. The companies in the region are forming multiple partnerships and mergers to increase their market share.

September 2021 - Constantia Flexibles managed to reach 80% recycled content in a PE film using EcoLam laminates’ waste. The EcoLam product line showed that packaging offered a high barrier and high recyclability simultaneously. The production waste from different EcoLam family laminates, including EVOH (ethylene-vinyl alcohol copolymer), metallization, adhesives, and inks, were shredded and sent to be reprocessed into regranulates on an industrial scale extruder. These regranulates were then converted into a new blown film in Constantia Pirk, which was then used in the lamination of new EcoLam materials as a sealant.
May 2021 - TC Transcontinental Packaging was named the Winner for Innovations in Sustainability in the 2021 Flexographic Technical Association (FTA) Sustainability Excellence Award competition for its IntegrititeTMpost-consumer recycled collation shrink film. The sustainable film includes 33% of post-consumer recycled (PCR) plastic, on par with virgin plastic resin performance and pre-approved by the How2Recycle.

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