Contract packaging refers to outsourcing for packaging services associated with labelling, serialization, kitting and fulfillment. The need for contract packaging is growing in the pharmaceutical, healthcare, food and beverage, personal care and cosmetic industries owing to the benefits such as time efficiency and focusing on core business processes. The global contract packaging market witnesses increasing demand from industries such as pharmaceutical, nutraceuticals, healthcare, cosmetics, food and beverage. Key benefits of contract packaging include inventory management, track-and-trace technologies, customized packaging. The global contract packaging 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 2030.
Key Takeaways
Key players: Key players operating in the Global Contract Packaging Market Demand 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.
Key opportunities: Rise in demand for sustainable and eco-friendly packaging along with growth of e-commerce and pharmaceutical industries are expected to present key opportunities in the contract packaging market over the forecast period.
Technological advancements: Adoption of advanced technologies such as IoT enabled track and trace solutions, robotics, automation and RFID is expected to drive efficiency and reduce costs in contract packaging.
Market drivers
Increase in online shopping: Growth of the e-commerce industry driving the demand for secure, sustainable and customized packaging solutions. E-commerce giants are increasingly outsourcing packaging requirements to contract packaging companies which is the key driver.
Growing pharmaceutical industry: Growth in pharmaceutical, nutraceuticals and medical device industries especially in emerging economies is increasing the outsourcing of packaging activities to specialized contract packagers. This is expected to remain a key growth driver.
Current challenges in Contract Packaging Market
The contract packaging industry faces numerous challenges such as maintaining proper inventory levels, logistical issues, fluctuations in raw material prices etc. The constantly changing consumer demands and frequent product launches by brands pose operational challenges for contract packagers. They need to efficiently manage packaging operations and ensure minimal production downtime to meet tight delivery timelines of their customers. Protecting confidential information of client brands and maintaining high quality standards across diverse packaging formats also requires dedicated efforts and investments.
SWOT Analysis
Strength: Streamlined operations and economies of scale provide cost benefits. Flexible production capabilities to handle diverse packaging jobs.
Weakness: Over-reliance on few large customers can be risky. Low bargaining power with raw material suppliers.
Opportunity: Growth in e-commerce and pharmaceutical industries increases outsourcing of packaging. Demand for sustainable and customized packaging solutions.
Threats: Intense competition limits pricing flexibility. Disruptions due to socio-political uncertainties and natural calamities.
Geographical regions where market is concentrated
Currently, North America accounts for the largest share in the global contract packaging market due to high density of pharmaceutical companies. Europe is another major region owing to stringent packaging regulations enforced by agencies like EMA and presence of leading fast moving consumer goods brands. Asia Pacific is anticipated to witness fastest growth on back of robust economic development, expansion of healthcare and consumer sectors in countries like China and India.
Fastest growing region
Asia Pacific region is projected to emerge as the fastest growing regional market for contract packaging during the forecast period from 2024 to 2030. This can be attributed to rising domestic consumption, growing middle class population and their purchasing power, setting up of manufacturing facilities by international brands as well as expansion of local companies in emerging Asian economies. China, India and other Southeast Asian countries will majorly drive the future growth momentum for contract packaging market in Asia Pacific.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
