According to VDMA, ‘strong demand’ for packaging machines increased the production of food processing and packaging machinery by 5% in 2023, taking the production value to a record high of €16.5 billion.
Apparently, food processing and packaging is the fifth-largest mechanical engineering sector in the world. Globally, it is said to occupy a trade share of 22% and achieve an average export turnover of 86%, which also makes it a major player in export activity.
In the German mechanical engineering industry, food processing and packaging accounts for 6% of the total production value and employs over 62,000 people.
Around half of the €16.5 billion production value is attributed to packaging machines. Companies are thought to have increased their production by 10% in 2023, reaching a total of just under €8 billion.
VDMA notes particular growth in the beverage packaging machinery sector, which reportedly increased by 18% to €2.8 billion. Other packaging machines are said to have reached €5.2 billion in an increase of 6%.
A ‘large part’ of the turnover was attributed to orders from 2022, as incoming orders were said to be ‘rather subdued’ in 2023. VDMA links this to uncertainty around EU packaging regulation and resultant hesitance among customers, but does not consider it an ongoing problem.
“The adoption of the packaging regulation in April 2024 is not only considered as positive due to some critical points, but it creates standardized conditions for the EU mechanical engineering industry and more planning security for investors,” explains Beatrix Fraese, economic expert and deputy managing director of the VDMA Food Processing and Packaging Machinery Association.
Looking ahead, food processing and packaging machinery is expected to benefit from increasing demand for food, beverages, and pharmaceutical products worldwide. Exports are said to have increased by 9% in 2023, and by 5% in the first quarter of 2024.
On the other hand, on a price-adjusted basis, incoming orders in the food processing machinery and packaging machinery sectors were still said to be 6% lower in the first four months of 2024 than the previous year’s level. However, it is emphasized that the order intake for packaging machinery increased by 16% in real terms within this time period, whereas the same period in 2023 was described as ‘weak’.
“We can expect to see an overall positive trend in incoming orders in the coming months, as it is likely that it will come to catch-up effects for packaging machinery in particular,” Fraese continues.
An economic survey conducted by VDMA from April 2024 suggests that over 40% of companies in the sector rate the market’s current demand as good or very good. Over 50% say they are satisfied with the current situation where it pertains to demand, and most are said to anticipate moderate growth in 2024 in light of ‘the persistently difficult frame conditions and of the high level achieved individually in the previous year’.
In the lead-up to last year’s interpack trade fair, VDMA stated that production value in the German packaging machinery industry reached €7.3 billion in 2022 in spite of supply bottlenecks and the uncertainty caused by Russia’s invasion of Ukraine.
Speaking at the event, chairman Christian Traumann shared that demand for machines remained high due to their “decisive contribution to the safe supply of food, beverages and pharmaceutical products to a growing world population”. It was claimed that over half of Germany’s food processing and packaging machinery exports were delivered to non-European countries, many of them in North America and Asia; exports to China increased by 11% at €605 million, despite the country’s zero-COVID strategy and the subsequent travel restrictions.
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