Contract packaging refers to the outsourcing of packaging and related services to specialized third-party companies known as contract packagers or co-packers. In a contract packaging arrangement, a company hires external packaging professionals to handle various aspects of the packaging process, allowing the brand owner to focus on other core business activities. Contract packaging services can encompass a wide range of activities, from primary and secondary packaging to labeling, assembly, and fulfillment.
The contract packaging market plays a pivotal role in the broader supply chain and manufacturing landscape, providing specialized packaging services to companies that may not have the in-house capabilities or resources to handle packaging processes themselves. This dynamic sector encompasses a wide range of services, including packaging design, assembly, labeling, and distribution. Contract packaging firms are engaged by diverse industries such as food and beverage, pharmaceuticals, cosmetics, consumer goods, and more.
The projected size of the contract packaging market was estimated to be US$ 47.2 billion in 2023, with expectations to further ascend to a valuation of US$ 49.6 billion by the conclusion of 2024. Throughout the forecast period, the global contract packaging market is anticipated to experience a steady Compound Annual Growth Rate (CAGR) of 5.10%, culminating in a market size of US$ 81.6 billion by 2034. This trajectory underscores a consistent and positive growth trend in the contract packaging industry.
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The surge in global industries and the emergence of startups across various sectors have fostered a growing demand for systematic and well-organized packaging solutions. This has driven many businesses to embrace contract packaging services, which offer the flexibility to tailor packaging processes according to their specific needs and requirements.
e-Commerce vertical has also been rising, which is actually playing a vital role in upscaling demand for third level of packaging, i.e. tertiary packaging. This factor is bound to take the entire contract packaging market at a greater stride in the near future.
Key Market Trends
Emphasis on product diversification has become a pivotal strategy for contract packagers, particularly in sectors like pharmaceuticals, food and beverage, and cosmetics. These industries witness a growing array of services from contract packagers, who are adept at delivering customized packaging solutions tailored to meet specific requirements. The flexibility and specialized expertise exhibited by these contract packagers are not only driving expansion but also offering clients unique and tailored services to enhance their product presentation.
In response to the rising significance of sustainability in the market, contract packaging firms are actively addressing the demand for eco-friendly packaging options. Recognizing the environmental concerns of both businesses and consumers, these firms are pioneering creative and sustainable packaging solutions. The integration of eco-friendly options into their service offerings not only aligns with market trends but also showcases a commitment to responsible packaging practices in the modern business landscape.
Key Takeaways
- North America holds 21% of the market share. This could be attributed to an ever-increasing demand for ready-to-eat food products along with carbonated beverages.
- Europe stands second with emphasis on contract packaging companies for outsourcing the packaging requirements. This would, in turn, lessen operational costs. CPG (Consumer Packaged Goods) are looking forward towards vertical integration for offering packaging solutions, inclusive of logistics and procurement of raw materials. Europe holds 16% of the market share.
- The Asia-Pacific is poised to grow voraciously in the contract packaging market due to growing awareness regarding the benefits of contract packaging.
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Key Players
- Unicep Packaging
- Summit Container
- Genco
- Stamar Packaging
- Sharp Packaging
- Jones Packaging
- Aaron Thomas Company Inc.
- DHL
- Green Packaging Asia
- Co-Pak Packaging
- Assemblies Unlimited Inc.
- Deufol
- AmeriPac Inc.
- Nulogy Corporation
- Wepackit Inc.
Market Segmentation
By Services:
- Primary Contract Packaging
- Secondary Contract Packaging
- Tertiary Contract Packaging
By Vertical:
- Food
- Beverages
- Pharmaceuticals
- Home Products and Fabrics
- Cosmetics and Beauty Care
- Others
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