Packaging Equipment in High Demand Driven by Population Growth

Even in the challenging year of 2022, the companies in the sector saw a rise in production of 7% to EUR15.8bn in Germany. Accordingly, the fourth-largest segment of mechanical and plant engineering in the country saw growth that surpassed its EUR15.3bn pre-crisis level.

“Even in the difficult year 2022, the demand for our machines remained high. This is primarily because food processing and packaging machines make a decisive contribution to the safe supply of food, beverages, and pharmaceutical products to a growing world population,” Christian Traumann, Chairman of the Food Processing and Packaging Machinery Association (VDMA), explained during a press conference.

The same association says that growth should have been much higher but that the slowdown in the economy’s recovery was mostly due to ongoing supply chain issues as well as Russia’s actions in Ukraine.

“The war in Ukraine, with all its consequences – rising energy prices, inflation, and the associated interest rate policy – created uncertainty, especially in Europe, which was reflected in a reluctance to invest,” Traumann added, looking back at the order intake in 2022, which fluctuated sharply from March onward.

USA leads, China with Strong Growth in the Packaging Machinery

In 2022, the sector’s exports fell by 1.7% to just under EUR9bn. Exports to the EU-27 and other European countries decreased by 4% and 8%, respectively. In total, European nations received 49% of German exports, 34% of which were bound for the EU.

With a concentration on North America and Asia, more than half of the exports were sent to non-European nations. The USA has long been by far the most significant market. Machinery for food processing and packaging worth EUR1.4bn was sent to the U.S. in 2022, making up 16% of all exports. Germany, rather than Italy, Canada, or China, is the most significant provider of food processing and packaging equipment to the U.S.

Despite the zero-COVID strategy there and the ensuing travel restrictions, exports to China, the second-largest market, rose by 11% to a record EUR605m.

“This shows that our products are still in high demand in the Chinese market. High-performance machines and process engineering know-how secure our market position here,” Traumann explained.

Prospects and Challenges

Even just the growing world population serves as a positive market factor for businesses in the food and packaging machines sectors. Order intake increased by 5% in real terms in 2022 as well, mostly due to non-European nations.

“We cannot estimate how the geopolitical risks, inflation, and the associated interest rate policy in the individual countries will affect investments and thus our business development,” Traumann said.

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