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US beverage industry hails growth in packaging investment

The US drinks industry is forecasting a period of investment in packaging machinery as companies expand, introduce new lines, and change materials to meet client demand.

Nine in 10 (90%) facilities plan to purchase some type of beverage packaging machinery in the next three years, with cost, speed, efficiency, and flexibility of machinery key assets, according to a survey conducted by PMMI, the Association for Packaging and Processing Technologies.

Expansion is the main driver for investment in lines for one in four (24%) US consumer packaged goods (CPG) companies and contract packagers, the poll, which was conducted in collaboration with Advantage Research, showed.

‘Tremendous growth’ despite recession threat

More than half (50%) of respondents said they expect to increase investment by 6 to 15% over the next three years, and nearly all of those interviewed in depth believe this trend will apply broadly across the sector, rather than to a few companies.

To put this into context, almost a quarter (24%) of those surveyed have invested $10 million or more in the past three years, with two-thirds (66%) investing up to $2.49 million, according to the Beverage Industry Packaging Trends report.

“I feel like the beverage industry is growing year over year, and there’s so much opportunity out there,” said one private label contractor.

A representative for a global drinks company added: “Everybody everywhere is buying equipment. If we go into a recession or if the tariffs come, that may change things, but right now there’s still tremendous growth.”

Upgrades and evolving formats drive machinery investment

Much of the investment going into machinery involves upgrades or updates based on the stock-keeping units (SKUs) they will be expected to run.

Formats will also shift and evolve, requiring flexibility. One director of robotic solutions and safety explained: “Just because you have a can line today that can produce a 12-ounce standard can, that does not mean that line can produce 12-ounce sleek cans, 16-ounce cans or mini cans.”

Customers are also seeking out products with less packaging. One drinks manufacturer interviewed for the report explained how cardboard trays had been removed from its packaging, in turn reducing cost, adding: “Our customers really like that.”

Paper chase drives investment in packaging machinery

There is also heightened consumer demand for “more sustainable and recyclable packaging”. Respondents predicted a surge in paper-based drinks packaging over the next two to three years.

“Consumers would like to see packaging move away from plastics,” the report read. “Rigid plastic is most commonly used today by survey respondents, but they anticipate a decrease in the next two to three years.”

This could fuel expansion of paper-based packaging across the drinks sector.

Currently, across the CPG companies and contract packagers surveyed, rigid plastic accounted for 32% of production, followed by flexible packaging (20%), metal (18%), and glass (15%). Paper-based made up 11%, with liquid cartons another 5%.

However, in the next couple of years they expect the use of glass and rigid plastic for beverages to fall by 8% and 7% respectively. There will be growth in liquid cartons (16%), metal (20%), flexible packaging (30%), and paper-based packaging (43%).

One manufacturer explained: “I think the wheel’s already turning insofar as recyclability and sustainability. I think that a lot of companies that manufacture the package material itself are on board for that, and so there should be a lot coming out to make improvements. Recyclable, compostable materials I see as a big area.”

Survey respondents were split in terms of the impact environmental demands will have on their operations: 39% believe it will be positive, while 27% think the impact will be negative.

Smart tech hoped to reduce staff headaches

Two-thirds of companies do not feel fully prepared for these environmental demands. Inflation, technology integration, and talent are also areas of concern, the report found.

The fluid workforce is a particular worry, so businesses will be looking for “smarter” technology to offer a helping hand.

“We have to assume that somebody new that doesn’t have much experience is going to be running the equipment every day or could come on because they’re replacing somebody who’s sick or they left,” one co-manufacturer explained.

“The equipment’s got to be smarter to run on itself and more intuitive to the operator and have built in tutorials.”