Canadian consumer packaged goods manufacturers prioritize reliability, service, and reputation when selecting machinery suppliers, with price now far less important than operational support and equipment dependability.
- Top purchasing factors: Reliability and service are most important, followed by manufacturer reputation and equipment flexibility
- Price shift: None of surveyed CPGs mentioned price as a factor in 2024, compared to 50% in 2018
- Decision location: Purchasing decisions typically occur at plant or division level, not corporate headquarters
- Regional quality perceptions: German manufacturers perceived as superior quality; Canadian and U.S. manufacturers each seen as best by 15% of respondents
- Supply concerns: Manufacturers report limited Canadian-made equipment availability and desire for simplified machines without unnecessary features
Canada’s consumer packaged goods manufacturers face a unique set of challenges and opportunities that influence their purchasing decisions when they shop for new machinery.
According to PMMI Business Intelligence’s 2024 “Canada Packaging Machinery Market” report, Business Intelligence researchers surveyed 31 Canadian CPGs across packaging verticals.
Shifting Priorities for Modern Needs
In choosing a vendor, reliability and service were by far the most important factors, mentioned by most respondents. They were followed by the manufacturer’s reputation.
Other important considerations include flexibility, the ability to install quickly, and productivity. Manufacturing lines are increasingly modular, so it is possible to upgrade or replace a machine, not an entire manufacturing line.
Despite overall inflation, price and total cost appear to be much less important today. Half of those surveyed in the 2018 Canada Packaging Machinery Market Assessment mentioned price, whereas none in the current sample mentioned it. That is not to say price is not important, but manufacturers realize the cost of failing to keep the machines running outweighs a lower initial price.
“When we bought our first flow wrapper, it was the most expensive piece of equipment we had ever purchased. We still have it, but it was a very bad decision. We got price quotes directly from the manufacturer and went with the cheapest option” says one respondent. “It was imported from Italy, but the company really wasn’t full service. There was no tech support. It was a massive failing. For our new facility, we purchased from a company in Quebec, and the experience has been amazing. They’re easy to communicate with; it’s been very reassuring because we’ve been burned.”
Sometimes, customers feel the available equipment is overkill, and that they are asked to buy more than they need.
“All I want is simplified machines for manufacturing,” says another respondent. “I don’t need full registration, nitrogen flush, all the bells and whistles. Does the consumer care what machine was used to fill [products]?”
How a regional focus plays a role
The purchase decision typically resides at the plant or division level and is rarely dictated by HQ or by ownership. Even when the head office makes the ultimate decision, local operations are intimately involved. This implies sales efforts should be directed at Canadian facilities.
The specific manufacturer and country of origin are relatively unimportant in comparison to these factors. In many cases, customers believe the equipment they need is only manufactured in a few countries.
Some have complained about an inability to purchase Canadian products. “Nothing is being made in Canada. One of our suppliers moved to New York,” says a beverage company representative.
Respondents did indicate they believe there are differences among suppliers from different regions, especially for support.
European manufacturers of packaging equipment and machinery, particularly those from Germany, are generally perceived to have superior quality.
About 15% of respondents each believe Canadian or U.S. manufacturers make the best quality equipment, and similar numbers see no difference. No respondents believe that Asian companies make the best quality equipment.
SOURCE: PMMI Business Intelligence: 2024 Canada Packaging Machinery Market
For more insights from PMMI’s Business Intelligence team, find reports, including “2024 Trends in Remote Services and Monitoring” and “2023 Packaging and Automation in the Warehouses of the Future” at pmmi.org/business-intelligence.
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