The global contract packaging market stands at US$ 45.2 Bn as of now and is expected to reach US$ 75.04 Bn by the year 2032 at a CAGR of 5.2% between 2022 and 2032.
It is a known fact that packaging is essential to keep product safe at the time of transportation and also to increase the shelf life. Every tangible product needs packaging, but the fact that a lot goes into initial investments can’t be ignored. This calls for third-party packaging firms, better known as ‘contract packaging firms’.
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.
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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.
The contract packaging market, which involves the outsourcing of packaging and related services to third-party providers, is influenced by several drivers and restraints that shape its growth and dynamics. Here are some key drivers and restraints for the contract packaging market:
Key Takeaways from Contract Packaging Market
- 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.
Drivers:
- Cost Efficiency: Contract packaging allows companies to reduce in-house packaging costs, including labor, equipment, and facilities, by outsourcing to specialized providers.
- Focus on Core Competencies: Companies can concentrate on their core competencies, such as product development and marketing, while leaving packaging and logistics to experts.
- Scalability: Contract packaging providers offer scalability, enabling businesses to adapt to changing demand and market fluctuations without major capital investments.
- Expertise and Innovation: Contract packagers often have access to the latest packaging technologies and innovations, which can lead to improved packaging solutions.
- Global Expansion: Contract packaging providers with international operations can assist companies in entering new markets by providing localized packaging and labeling solutions.
- Reduced Lead Times: Outsourcing packaging can reduce lead times, allowing products to reach the market faster and respond to consumer demand more effectively.
- Regulatory Compliance: Contract packagers often have expertise in regulatory compliance, ensuring that products meet packaging and labeling regulations in different regions.
Restraints:
- Loss of Control: Outsourcing packaging may result in reduced control over quality, production schedules, and logistics, which can be a concern for some companies.
- Confidentiality: Sharing proprietary product information with contract packagers may raise concerns about intellectual property protection.
- Quality Assurance: Ensuring consistent quality and adherence to brand standards can be challenging when relying on external providers.
- Communication Challenges: Effective communication and coordination between the contracting company and the packaging provider are essential but can be challenging, especially when dealing with international suppliers.
- Cost of Services: While contract packaging can be cost-effective, some specialized or customized packaging solutions may come at a premium price.
- Limited Flexibility: Contract packaging providers may have limitations in terms of packaging capabilities, materials, or equipment, which could restrict product packaging options.
- Market Competition: The contract packaging industry is competitive, and companies may face challenges in finding the right provider with the necessary expertise and capacity.
- Risk of Supplier Dependency: Overreliance on a single contract packaging provider can pose risks if the provider encounters operational issues or changes in ownership.
How does the Report unpack itself?
- The research study is based on services (primary contract packaging, secondary contract packaging, and tertiary contract packaging), and by vertical (food, beverages, pharmaceuticals, home products and fabrics, cosmetics and beauty care, and others).
- Contract packaging saves on time and money. With objective of delivering product with safety to the retail locations, that too, in an attractive and high quality package, the global contract packaging market is expected to stand in a very good stead in the upcoming period.
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.
Key Segments Covered in the Contract Packaging Industry Survey
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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About Future Market Insights (FMI)
Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 5000 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.
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