Market focus: Mexico

A country of more than 130 million people, Mexico has a large domestic consumer base and a robust manufacturing sector. It also boasts a strong export industry and the presence of the world’s largest consumer market, the US, to its north, which gives the Mexican label sector a unique dynamic.

It is increasingly common to find label converting operations often, but not always, part of international groups, boasting world-class technology and production quality and geared to serving the US market.

And yet it is also a market in need of professionalization, according to the FTA Mexico, which was founded 18 months ago to address the issue.

Growth in Mexico has been strong in recent years, particularly due to the nearshoring trend, which has seen international brands set up factories in Mexico to serve the US market with shorter supply chains.

Growth

According to Mordor Intelligence, the value of the label market in Mexico is estimated at 1.31 billion USD in 2025. It is expected to reach 1.62 billion USD by 2030, at a CAGR of 4.24 percent during the forecast period (2025-2030). The analyst cites food, beverage and cosmetics as sectors particularly driving growth.

Data from Mexico’s National Institute of Statistics and Geography (INEGI) has shown growth in the food and beverage sectors in recent years. It estimated the food industry’s production value in 2022 to be just over 13 percent higher than the previous year, while the beverage sector grew by 14 percent in the same period. Such rises in domestic production boost demand for labels and packaging.

Export markets have also been booming in recent years. According to the World Trade Organization, in 2022, Mexico exported goods valued at around 578.19 billion USD, a 54.6 percent increase from 2016.

The nearshoring trend has grown significantly since the pandemic and is a contributing factor to rising exports. Local label converters are taking advantage, with increasing numbers producing labels for goods destined for export to the US.

“Many commercial printers have moved into label production, seeing opportunities in the market”

‘The nearshoring trend has brought international manufacturers to Mexico, and this has been a benefit to the economy and a benefit to label converters who can label these products for export to the US,’ says Keren Becerra, operations director of Mexican label converter Etiquetas Lobo Impresores and president of Anpack, the Latin American association of packaging and labels manufacturers. ‘There are even converters in Mexico who export most of their production across the border. Border cities are showing strong economic growth. It has increased demand not only for prime labels for sectors such as pharma, cosmetics and electronics but also for logistics labels.’

A knock-on effect of this trend, according to FTA Mexico president Martin Maldonado, is increasing pressure on the local industry to professionalize its processes, operations and people.

‘The industry in Mexico is still in need of professionalization in terms of training and certifications,’ he explains. ‘The nearshoring trend has added pressure to professionalize because the global brands who have set up manufacturing facilities in Mexico to serve the US market require converters to meet certain quality and operational standards in order to guarantee the quality of their products.’

It was in recognition of this need for professionalization that FTA Mexico, headquartered in Guadalajara, was founded in 2023. The initiative was driven by a group of industry suppliers, led by DuPont, which pitched the FTA in the US to set up a branch of the Flexographic Technical Association in Mexico. Among its 42 supplier members are Comexi, Esko, Flint Group, Gallus, Hybrid Software and Mark Andy.

‘These are top-level companies who understood the importance of an association such as the FTA and knew the benefits of the technical education and standards that it could bring to the Mexican market,’ says Maldonado.

‘Due to Mexico’s proximity to the US, the FTA was always a reference point for the local industry. Converters here have always been keen to be a part of it, but there is often a language barrier, which makes it hard to take advantage of the conferences, studies and research. And there is the problem of distance.’

FTA Mexico will certify converters and host forums and roadshows around the country. It has the same objectives and philosophy as its US counterpart, says Maldonado: to aid the professionalization of companies and individuals in the country’s flexo sector to grow the local industry.

Legacy

If nearshoring is a legacy of the pandemic, so too is strong growth in online sales with the knock-on effect of increased demand for shipping labels.

‘Online shopping has been booming in Mexico since the pandemic,’ says Becerra. In 2023, Mexico’s retail market surged to 314.2 billion USD, a 22 percent increase from the previous year, as reported by Euromonitor. The country’s e-commerce retail sales rose from 28.3 billion USD in 2022 to 36.3 billion USD in 2023. A steady growth trajectory is now widely anticipated, with a CAGR of 12 percent expected to propel e-commerce retail sales to 66.3 billion USD by 2028.

A further shift in the local market has occurred since the pandemic. With commercial print businesses struggling during lockdowns, many wider web converters moved into label and packaging production.

‘There are many more label converters operating in the market in recent years. There has been an explosion in competition,’ says Becerra. ‘Many commercial printers have moved into label production, seeing opportunities in the market. Their businesses suffered greatly during the pandemic, whereas the label sector remained strong. This encouraged them to explore the market and diversify into label printing.

‘Part of the motivation is the same as what has encouraged label converters to move into sectors such as flexible packaging — helping to serve existing clients with the products they need. The result has been an increasing homogenization of the market.’

Etiquetas Lobo Impresores, for its part, serves a diverse array of end-user sectors, with Becerra citing food and pharmaceuticals as particularly important markets. Its export business has also been rising in recent years, she reports.

A strong tequila export industry is a driver of interest in GM’s high-specification finishing equipment, says the company’s global sales manager, Jos Kabouw, who describes Mexico as a ‘crazily competitive market with many players.’ GM is represented in Mexico by local agent EXI.

‘Labor continues to be cheap but highly skilled, so as a result, there is not a high level of automation,’ says Kabouw. ‘For example, converters in Europe and the US have been quick to adopt GM’s auto-knife box for automatic setting of the slitting knives, but it has been a bit slower in Mexico. Speed is often not crucial for local converters. Usually, the natural trend is for converters to install faster machines, but this doesn’t happen quite so much in Mexico.

‘The local economy benefits from the many Mexicans who work in the US and send the money to family back home,’ he continues. ‘This helps to generate wealth and increase consumption. So, despite a political background that is like many other countries in Latin America, Mexico is not affected the same way.

‘The US is a big export market, and this increases quality demands on Mexican converters, which in turn raises the quality standards in Mexico itself,’ Kabouw says. ‘I’ve visited many label converters in Mexico and the US, and the Mexican companies often work to better standards. The top level of converters in Mexico are world-class in technology and production, but not in automation, due to the cheap and skilled labor force at their disposal.’

“Mexican converters are investing in technology. There is a strong trend toward growth”

FTA president Martin Maldonado, who has more than 25 years of experience in the Mexican printing industry, believes there is optimism in the local market. ‘Mexican converters are investing in technology. There is a strong trend towards growth, which can be seen in the number of sales into the country by equipment manufacturers.’

One crucial challenge Maldonado identifies is recruitment.

‘There is a struggle to attract young people into the sector. There are many factors, but one has been a lack of representation from the industry to promote itself to students and show them what it has to offer. FTA Mexico has set up agreements with six universities and various local governments to get closer to young people and attract them to a career in the industry.’

FTA Mexico, an association partner of the show, will exhibit at Labelexpo Mexico 2025 and promote its industry initiatives and events. ‘We are very happy to be partnering with Labelexpo Mexico. We want to support it and see it continue to grow. There was a lack of this type of industry-focused event in Mexico.’

Labels & Labeling hosted a webinar that discussed trends in the local label market and the technology exhibited at Labelexpo Mexico.