The contract packaging market offers customized packaging services to manufacturing companies who wish to outsource their secondary packaging needs. These services help brand owners to focus on their core business competencies by letting specialized packaging firms handle secondary packaging processes such as kitting, configuration, labeling and fulfillment. The global contract packaging market offerings include various formats like bags, boxes, ampules, blister packs, bottles and pouches made using paper, plastic, glass and other materials.
The market is estimated to be valued at US$ 76.46 Mn in 2024 and is expected to exhibit a CAGR of 7.1% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the contract packaging market are SUSI Studio, Insecta Shoes Canada Inc. ROMBAUT, In The Soulshine, Della La LLC, Reformation, Alabama Chanin, Wawwa, Doshi FCSA, Hiareth Collective, Komodo Fashion, Brave Gentle Man, ECOALF, Rapanui, and Tact & Stone. The market provides opportunities for contract packagers to offer value added services like inventory management, quality control testing and product serialization. Technological advancements such as track and trace solutions, intelligent Contract Packaging Market Trends with IoT integration and robotics are enhancing automation and efficiency in the contract packaging industry.
Market Drivers
The main driver for the contract packaging market is the growing need for customization and flexibility in packaging operations. Manufacturers are increasingly outsourcing non-core packaging activities to contract packagers in order to focus on R&D, production and sales. This allows them to efficiently manage seasonal demand fluctuations and launch new SKUs. Contract packaging also provides benefits like reduced costs, minimal investment and improved throughput. The market is expected to witness steady growth as brands continue seeking specialized packaging expertise and optimization of working capital.
Current Challenges in Contract Packaging Market
The contract packaging industry is facing challenges of ensuring quality, minimizing production errors and delays. Rising material costs have also impacted the margins for contract packagers. Constant technology changes require ongoing investments and upgrading of packaging lines. Recruiting skilled labor and retaining staff is another issue as packaging is seen as low value work by many. Environmental concerns around plastic packaging have led to regulatory pressures to adopt sustainable practices. Overall, managing costs efficiently while meeting client expectations on quality, timelines and packaging innovation is testing contract packagers.
SWOT Analysis
Strength: Ability to handle complex packaging projects for clients across industries. expertise in multi-channel fulfillment reduces overheads for brand owners.
Weakness: Over-reliance on few large customers leads to risks if clients switch vendors. Smaller players have limited capabilities and scale.
Opportunity: Growth in e-commerce is driving demand for specialized packaging and labeling. Advancements in automation technologies can improve productivity.
Threats: Intense price competition from low-cost Asian markets. Strong manufacturers may start captive packaging divisions.
Geographical Regions
North America accounts for the largest share currently due to high packaging needs of food & beverages and pharmaceutical industries in the US and Canada. Asia Pacific region is expected to witness fastest growth over the forecast period led by China, India and other emerging Asian countries where contract packaging is gaining popularity.
Fastest Growing Region
The Asia Pacific region is poised to be the fastest growing market for contract packaging during the forecast period. This is attributed to rapid industrialization, growing middle class, rising penetration of packaged consumer goods and expanding pharmaceutical sector in the region’s emerging economies. India and China especially present huge growth opportunities with their large populations and increasing consumption of packaged products across categories.
About Author - Ravina Pandya
Ravina Pandya,a content writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemicals and materials, etc. With an MBA in E-commerce, she has expertise in SEO-optimized content that resonates with industry professionals. LinkedIn Profile