Packaging Automation Trends 2026: Retrofitting, Aftersales, and Talent Requirements

Packaging automation is changing, but not necessarily in the way it is sometimes portrayed. While new technology continues to enter the market, end users are becoming more selective about where they invest and are increasingly looking at how they can improve the systems they already have.

This is creating a stronger focus on retrofitting, aftersales, and long-term customer relationships. Smaller automation companies are also finding opportunities in projects that larger businesses have historically been less interested in, while AI is developing at very different speeds across packaging and warehouse automation.

In this article, we explore the key packaging automation trends shaping the market in 2026, including the shift towards retrofitting and upgrades, the growing importance of aftersales, the changing role of AI, and what these developments mean for talent across the sector.

Packaging Automation Retrofitting and Upgrades Are Becoming Long-Term Solutions

Retrofitting and upgrading are much more important now than they used to be, and they are likely to remain a long-term solution for packaging manufacturers. The packaging machinery retrofitting and upgrading market is valued at $12.1 billion in 2026 and is projected to reach $20.5 billion by 2034, representing an 8.5% CAGR. Packaging and processing lines account for 42% of the total machinery retrofit market, while servo drives and control retrofits account for 45% of module upgrades.

The major companies typically want projects worth at least $20 million, but end users don’t necessarily need those projects anymore. They already have the systems in place; they just need to upgrade them.

There is always innovative technology coming into the market, but that does not mean a manufacturer needs to build a new warehouse every time a new piece of equipment comes out. If the existing system can be upgraded to take advantage of that technology, it makes much more sense in many cases. End users are increasingly recognizing this, so they want to modernize existing lines, integrate new sensors, and introduce modular, plug-and-play technology without completely replacing the assets they already have.

The shift towards retrofitting is also a sign that the biggest projects are not as accessible as they once were. End users are looking for more upgrades and greater differentiation from competitors. A lot of companies offer broadly similar things, so the actual service and added value become crucial.

How Tariffs and Inflation Are Changing Packaging Automation Investment

There is also a wider economic reason why end users are looking more closely at upgrades. A lot of packaging automation companies are based in Europe and China, and getting equipment into the US has become more difficult due to tariffs.

End users are also dealing with inflation and higher costs, which means they don’t necessarily have the budgets available for new automation projects. If a company can upgrade an existing packaging line rather than replace it completely, the investment becomes much easier to justify.

In July 2026, the Federal Communications Commission added foreign-produced “advanced robotic devices” to its Covered List, creating further restrictions around new non-US mobile robotics and autonomous systems.

It makes market entry much more complicated when selling automation systems internationally. You need a strong network and a clear understanding of how you are going to get equipment into the market and support the customer once it is there. When you combine that with inflation, tariffs, and higher interest rates, end users are naturally becoming more selective about where they put their money.

Why Aftersales Is Becoming More Important in Packaging Automation

One of the clearest changes in packaging automation is the growing importance of aftersales and service. Standard packaging equipment OEMs generate around 25-30% of their total revenue from aftersales and services, while the strongest service-oriented OEMs are scaling this beyond 40-45%. Aftersales can also generate EBIT margins of around 25%, compared with roughly 10% for initial equipment sales.

Aftersales creates value for both sides. For automation businesses, it provides a recurring revenue stream through maintenance, service agreements, upgrades, spare parts, and ongoing technical support. For clients, it means they have continued support after the initial sale and a partner who understands their systems and can help them get more value from their investment. In such a competitive market, that ongoing relationship is increasingly important. If you are not looking after a customer properly, another company can come in and take that relationship.

This is creating greater demand for account management professionals, as well as service engineers, field service engineers, and aftersales engineers who are increasingly part of the customer experience. The engineering side is becoming more commercial too. If an engineer sees an opportunity and knows that the customer could benefit from an additional service or upgrade, they need to be able to recognize that opportunity. This shift has really accelerated over the past year or so.

Why Smaller Packaging Automation Companies Are Finding Opportunities in the Mid-Market

Some market leaders and larger companies focus heavily on massive projects and have historically been less interested in projects worth around $1 million-$10 million. That has allowed smaller and emerging companies to take those opportunities and build strong relationships with clients.

For them, the relationship matters more because they are competing on responsiveness and service rather than scale. That can be a significant advantage when a manufacturer is looking for customized machinery adaptations or better post-installation support. For now, the market is creating opportunities for smaller and mid-sized packaging automation integrators to compete on responsiveness and relationships, rather than just scale.

Contact CSG Talent to discuss your packaging automation recruitment strategy.

Where Is the Packaging Automation Market Growing Globally?

Packaging automation investment is not moving at the same pace in every region. Asia-Pacific remains the largest market, with China, Japan, and South Korea continuing to invest heavily in industrial automation.

North America and Western Europe are more measured following the post-pandemic capital expenditure spikes. Businesses are being more selective about where they invest, with spending increasingly directed towards supply chain resilience, energy efficiency, and wider infrastructure requirements. That also supports the shift towards retrofitting, as manufacturers look for ways to improve existing systems without committing to completely new facilities.

Eastern Europe is another region worth watching as nearshoring continues to influence European manufacturing. As businesses establish production facilities closer to their core markets, there will be opportunities for packaging automation companies to support both new facilities and existing operations.

AI in Packaging Automation: Why Warehouse Automation Is Moving Faster

AI is obviously a big topic across automation, but it is not necessarily having the same impact everywhere. Agentic AI isn’t a major part of packaging automation projects yet, as it is still fundamentally about physical execution. You have machinery doing a job at high speed, with sensors, machine vision, and deterministic PLC controls making sure that the job is done consistently. Machine vision is where AI is having a bigger impact, as it can support quality assurance, inspection, high-speed sorting, and optical alignment.

There is definitely a future for AI in packaging, but not all packaging automation projects require it yet. The projects are often smaller, and the problems being solved are very specific. If a machine needs to perform the same physical task thousands of times, there is not necessarily a reason to introduce an agentic AI system to do it.

There is more potential for AI in warehouse automation, particularly around inventory control and logistics. AGVs and AMRs can use increasingly sophisticated software to move around warehouses and work out how to get from A to B more effectively. That is where agentic AI makes more sense because it is dealing with logistics and decision-making rather than the physical execution of a packaging process.

There are companies developing their own AI software systems, and there is some interesting technology coming through, but there has not been mainstream adoption just yet. Physical automation, robotics, sensors, and machine vision are still much more important.

The Changing Talent Requirements in Packaging Automation

The changes in the market are also changing what companies need from their people, particularly across sales and engineering. Some are adopting a strategy where everyone needs an engineering degree and engineering experience, while others are becoming more open to hiring someone with no experience if they are genuinely interested in getting into the industry. Companies need to start building talent from entry-level roles, or they are going to face major issues in the near future.

There is also a lot of succession planning happening at the moment, as senior professionals are looking towards retirement over the next 3-5 years. The challenge is that succession is not just about replacing the person who is retiring. If someone moves into that senior position, their previous role needs to be filled as well. Then the person below them may need to move up, creating another gap further down the organization. Eventually, there can be a broken link in the chain, particularly at mid-senior level.

That is where an executive search specialist adds real value. Companies need to think beyond the immediate replacement and consider what their talent pipeline looks like several steps down the organization. Building that next generation of talent is going to be just as important as investing in the next generation of technology.

Why Packaging Automation Companies Need Specialist Executive Search

As the packaging automation market becomes more specialized, hiring the right people is becoming more difficult. Businesses need professionals who understand the technology, the customer base, and the commercial environment they are operating in.

That is particularly important when companies are hiring for senior sales, engineering, service, and leadership positions. The right hire needs to add value quickly but also understand the market, the customer, and where the business is heading.

At CSG Talent, our packaging automation executive search specialists provide access to a wide network of established industry professionals, including people who may not be actively looking for their next move. For businesses dealing with succession challenges, changing customer expectations, and a more competitive market, that specialist knowledge adds significant value.

Contact CSG Talent to secure the specialist talent your business needs to grow and adapt in a changing market.

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