Food Processing & Packaging Machinery
This industry assessment covers two closely related, but distinct industry sectors: food processing machinery and packaging machinery. Food processing machinery includes machinery for all types of operations in the processing of foodstuffs (vegetables, fruits, nuts, meats, poultry, fish, dairy products, grains, cereals, bakery and confectionery products, beverages, and animal foods). Machinery and associated systems for most applications are custom designed and constructed of special materials for highly sanitary operation and ease of thorough cleaning. Depending on their use, machines must conform to one or more of the sanitary standards established by the U.S. Department of Agriculture, the Food and Drug Administration, and the International Association of Milk, Food and Environmental Sanitarians. Food processing machinery builders regularly provide machinery to the pharmaceutical, drug, cosmetic, and personal care-products industries because of their skill in building machines for sanitary applications. Food processing machinery is classified under NAICS code 333294.
Packaging machinery consists of equipment for uses such as canning; container cleaning, filling, and forming; bagging, packing, unpacking, bottling, sealing and lidding; inspection and check weighing; wrapping, shrink film and heat sealing; case forming, labeling and encoding; palletizing and depalletizing, and related uses. Packaging machinery is classified under NAICS code 333993.
Industry Overview and Global Competitiveness Manufacturers of food processing and packaging machinery face a rapidly changing and highly demanding global competitive environment. The food, beverage, pharmaceuticals and personal care industries that purchase most food processing and packaging machinery have globalized their supply chains—not just for finished products, but for the capital equipment they use to produce these products.
Manufacturers of capital equipment for these end-user companies have been faced with a growing tension between their customers’ demand for lower-cost equipment, on the one hand, and their own need to maintain their profit margins and their standards and reputation for quality, on the other hand. The growth of China and India both as markets and as locations for manufacturing operations has had a major influence in exacerbating this tension. As a result, U.S. manufacturers of food processing and packaging machinery are being driven more than ever to offer broader selections of products, at lower costs, and to supplement them with an ever higher level of value-added engineering, design, and other services. U.S. manufacturers of food processing machinery had total sales of $2.95 billion in 2002, the most recent year for which data is available from the Bureau of the Census. The U.S. food processing equipment industry exports a significant amount of what it sells, 24.3 percent in 2002. Imports amounted to 21.3 percent of a domestic U.S. market worth $2.86 billion in 2002.
Sources differ on the number of U.S. companies that manufacture food processing machinery. The Bureau of the Census reported 553 such manufacturers in 2002, while the Food Processing Suppliers Association (FPSA) believes that there are approximately 2,500. Most food processing machinery manufacturers appear to be small companies, with the lion’s share of those identified by the Census having fewer than 50 employees. Leading U.S. manufacturers of food processing machinery and systems include FMC FoodTech, SPX Process Equipment and Rockwell Automation. Major foreign companies manufacturing in the United States include The Tetra Laval Group (Switzerland) and Odenburg Engineering (Netherlands). U.S. packaging machinery manufacturers reported $4.2 billion in sales in 2006, according to the Census Bureau’s Annual Survey of Manufacturers (ASM). Exports amounted to 18.3 percent of 2006 total sales, an increase from 15.1 percent in 2002. Imports accounted for a 35.1 percent share of the domestic market, up from 26.2 percent in 2002.
The Census Bureau reports that 662 companies manufactured packaging machinery in the United States in 2002. While most packaging machinery producers are quite small, several U.S. companies are emerging as providers of integrated packaging solutions, including value-added design, engineering, and integration services, along with machinery and traditional after-sales service and support. Some of these firms include the Barry-Wehmiller Companies, Inc.; Pro-Mach, Inc.; and Hartness International. Other leading U.S. manufacturers dominate specialized technology niches, such as Videojet Technologies, Inc. and the Nordson Corporation.