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 primary objective of contract packaging is to offer businesses a flexible and cost-effective solution for their packaging needs. Companies often turn to contract packaging services to streamline their operations, reduce overhead costs, and improve overall efficiency. By outsourcing packaging tasks to specialized providers, businesses can focus on their core competencies, leaving the complexities of packaging to experts who can ensure compliance with industry standards and regulations.
The projected size of the contract packaging market was estimated to be USD 47.2 billion in 2023, with expectations to further ascend to a valuation of USD 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 USD 81.6 billion by 2034. This trajectory underscores a consistent and positive growth trend in the contract packaging industry.
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
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.
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.
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.
Market Drivers:
- Scalability: Contract packaging providers offer scalability, enabling businesses to adapt to changing demand and market fluctuations without major capital investments.
- 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.
- 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.
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.
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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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