The contract packaging market size is projected to reach USD 59088.3 million by 2030, registering a CAGR of 6.5% during the forecast period (2022–2030).
The Global Contract Packaging Market size is projected to be worth USD 59088.3 million by 2030, registering a CAGR of 6.5% during the forecast period (2022–2030).
Contract packaging is a common phenomenon of outsourcing of packaging operations to the contract packaging partner that has expertise in the overall packaging supply chain. Contract packaging manufacturers offer a range of packaging services such as bagging/pouching, lot/batch & date coding, boxing & cartoning, wrapping & bundling, labelling and others. Outsourcing of packaging operations to contract packaging companies saves significant financials of the companies as it negates the purchasing of expensive packaging machinery and materials.
COVID-19 Impact on the Global Contract Packaging Market:
Like most industries, the packaging industry got affected by the emergence of COVID-19. In the first few months of the pandemic, the growth of the packaging industry slumped, characterized by declining revenues and disruption of the supply chain and manufacturing facilities operating with a partial workforce in their production line. However, in the last few months of 2020, packaging markets in the global region exhibited a healthy recovery, reflecting a positive market outlook. Nevertheless, supply chains remain one of the primary issues for manufacturers operating in the packaging industry. The sales are not likely to rebound to pre-COVID levels until 2023. Owing to the market disruption caused by the pandemic, the current projections of global contract packaging market growth till 2030 are expected to be slightly lower than pre-COVID-19 estimates. The pandemic has had a negative impact on the contract packaging industry across the globe. The emergence of the pandemic globally has induced a decline in the demand for contract packaging due to the shutdown or functioning of manufacturing facilities at partial capacities and a slowdown in the supply of components and raw materials due to the lockdown restrictions. Contract packagers market have witnessed a decline in the demand for packaging as the market has declined in demand for food & beverage, pharmaceuticals, personal care, consumer goods, spare parts, e-commerce, and other industry.
Contract Packaging Market Dynamics
Developing countries' governments are creating important manufacturing hubs and increasing their import and export of packaging products. Public authorities of different countries have released guidelines specific to the standard packaging of products. The packaging industry is growing significantly globally and is a major contributor to the economy of both developed and developing regions. Various countries' governments have raised the packaging standards to compete with the international contract packaging market standard, necessitating improved packaging processes such as blow molding, injection molding, roto molding, thermoforming, extrusion, etc. Additionally, the growing use of high-end machinery and materials such as plastic, metal, glass, paper & paperboard help ensure that the end product quality and visual appeal meet the target market's highest standard.
Recycling packaging products such as plastic containers, bottles & jars, boxes, cans, bags, pouches, and other products require high capital due to procurement cost, energy expenditure, and scrap value. Recycling plastic products such as bottles & jars, clamshell, and other products involve various steps such as collecting the package after use, repaying the scrap amount to the customer, transportation to the recycling facility, and cleaning & crushing. For most small and medium-scale contract packaging organizations, manufacturing new packaging products has become more economical than recycling. Recycling and separating packaging products will incur an additional cost to the contract packagers. . Thus, high recycling costs and stringent government regulations will restrain the global contract packaging market in the years to come.
The increasing innovations in the packaging market offer plenty of growth opportunities to contract packagers. The contract packaging market with innovation creates development opportunities and new demand from the end-use industries such as food & beverages, pharmaceuticals, personal care, consumer goods, spare parts, e-commerce, and other industries. Nowadays, packaging products can be made re-sealable, reusable, and molded into desired shapes, flexible & rigid packs, and innovative designs, resulting in consumer-friendly packaging that is easy to handle, dispose of, and store. New packaging products, such as date coding labels, clamshells, boxes & cartons, blister packs, wrappers, and other packaging products, will offer growth prospects to the market.
Supply Chain Analysis
In the R&D stage, the dimensions, technology, quality, product type, and applications are analyzed to design and develop the packaging product effectively. In the research stage, the overall design, material type, size, and shape of the packaging product are determined according to the application of the product, design standards, and the specific end-user requirements. The contract packaging market development stage includes an initial prototype development phase, followed by the testing phase, which is done under various working conditions to ensure efficient product performance throughout its lifespan. In this stage, the contract packaging industry manufacturers procure the necessary raw material from the suppliers. The materials required for packaging products are plastics, metals, glass, paper, and paperboards. These raw materials are selected based on the quality, material strength, and end-use industries needs. Contract packaging companies generally procure raw materials from trusted suppliers.
Packaging products are equipped and designed according to their specific end use applications. Manufacturers initiate the process by designing the solutions based on the peculiarities of the application area. After the raw material procurement, contract packagers assemble the packaging material using the packaging machinery according to the end-use industry requirements. Once the manufacturing stage is completed, the finished packaging undergoes certain quality checks to ensure that they comply with the required performance standards, efficiency, and precision in critical work conditions. After the manufacturing process is completed, the finished products are sent to various distributors and suppliers, such as independent dealers, company dealers, and retailers who work as a channel to provide the final packaging products to various suppliers and individuals. The demand for the contract packaging market is increasing due to strong distribution channels, urbanization & commercialization, increased manufacturing facilities, and the growing packaging industry. The contract packaging market's end users are food & beverages, personal care, consumer goods, pharmaceuticals, spare parts, e-commerce, and others. The end-use industries generally purchase packaged products directly from the contract packagers. The consumer purchases the packaging product from the authorized dealers. The end-use industry selection of contract packagers primarily depends on their specifications and cost. The selection depends on the product type and quality of the material.
Based on Service:
Bagging/Pouching, Lot/Batch & Date Coding, Boxing & Cartoning, Wrapping & Bundling. Labelling, Others are the segments based on the application of the Global Contract Packaging Market.The Boxing & Cartoning segment is expected to have the highest CAGR and dominate the market share during the forecast period. Vertical bagging and boxing system integrates bag forming, product weighing and loading, bag sealing, case forming and loading, and case sealing into one fully automated system, significantly lowering labor costs and increasing throughput. Increase packing rates in boxing, lower material prices, and lower labor costs with a specially created high-speed packaging line. Custom bagging, boxes, and crate solutions, palletizing, heat sealing, foam wrapping, and shrink wrapping, are available options in addition to military packaging. Packaging may be integrated with warehousing services for secure long- and short-term storage as well as a unit or bulk distribution.
Based on End-Use Industry:
Food and beverages, Consumer goods, Personal care, Pharmaceutical, E-commerce, Spare Parts, Others are the segments based on the application of the Global Contract Packaging Market. The Food and beverages segment is expected to have the highest CAGR and dominate the market share during the forecast period. The food industry is evolving into a profitable to target for labeling and other contract packaging market services as people start reading the labels on food products and beverages. However, the current increase in cosmetics sales online is anticipated to provide the labeling industry with chances for long-term growth. The food & beverage sector is the largest end-use industry for contract packaging worldwide. The product packaging available at the moment of purchase is solely responsible for the brand reputation of the producers of goods like groceries and beverages. This could be crucial in determining how well the product sells.
Based on End-User:
HVACR, refrigerated transport, food processing, power, and others are the segments based on the application of the Global Contract Packaging Market. The HVACR segment is expected to have the highest CAGR and dominate the market share during the forecast period. Microchannel heat exchangers are used in HVACR systems to improve equipment efficiency, reduce equipment size & weight, and cut the overall costs of an HVAC system. Furthermore, these heat exchangers aid in increasing an air conditioning system's cooling capacity and overall efficiency. These heat exchangers' unique circuit design helps reduce internal pressure loss by more than 65 percent, lowering compressor energy consumption significantly. In comparison to fin/tube heat exchangers, MCHEs boost system efficiency by about 40%. Compared to traditional heat exchangers, they also use less refrigerant charge, often 40 percent to 60 percent.
The regions are classified as North America, EMEA, Asia-Pacific, South America. Asia-Pacific is estimated to hold the highest revenue market share throughout the forecast period. EMEA is one of the world's fastest-growing regions, and it is predicted to continue rising during the forecast period. European enterprises are increasingly outsourcing their packaging requirements to contract packaging industry companies to focus on their core operations and cut operating expenses while growing market penetration. Due to rising demand and a shift in manufacturing companies' preferences toward contract packagers, the European contract packaging market has experienced significant growth in recent years. The Middle East & Africa has grown in contract packaging services, particularly bottling and filling services. Due to the increasing demand for food, beverage, and pharmaceuticals during the COVID epidemic, many businesses outsourced their packaging for greater safety due to the demand for contract packaging market.
Due to the high-quality service offerings provided by CPOs and CDMOs based in the US, North America accounted for the significant revenue share in 2021. Additionally, most pharmaceutical businesses contract out their wrapping tasks to North American packages to make entering the US markets easier. Nearly 50 well-known, often prescribed medications are anticipated to lose their patent protection in North America by the end of 2020, which presents the potential for contract packagers. A higher hospital stay rate and a worsening illness can result from poor patient compliance or drug adherence.
The global contract packaging market is characterized by the presence of many global, regional, and local vendors. The market is highly competitive, with all the players continually competing to gain a larger market share. High competition and rapid advancements in technology are some of the critical factors that could restrain the market growth. The vendors compete based on cost, product quality, and reliability. It is crucial for vendors to provide cost-effective and efficient products to survive and succeed in a competitive market environment.
List of Key Companies covered in the report:
The Global Contract Packaging Market is segmented based on Type, Phase, End-User, And Region in this report. The report is focused on various analytical aspects such as market dynamics, Supply chain analysis, Porter’s five forces, competitive landscape, recent developments, and company profiles. The insights in this report, comprise, discuss views, and predict the emerging and fast-growing segments, regions, and countries with potential for development in the Global Contract Packaging Market.
By End-Use Industry:
Objectives of the Study
|Market Size||2030: USD 59088.3 Million|
|Historical Data||2019 & 2020|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Type, Phase, End-User, And Region|
|Geographies Covered||North America, EMEA, Asia-Pacific, South America|
|Key Vendors||WestRock (US), FM Logistics (India), GXO (US), CEVA Logistics (France), Sonoco (US), FedEx (US), DB Schenker (Germany), UPS (US), Kuehne + Nagel Logistics (Switzerland), DSV (Denmark), Geodis (France), Deufol (Indiana), Menasha (WI), Solistica (Nuevo Leon), IPS (UK), Hopi (Czech Republic), Marvinpack (Switzerland), Truvant (North Carolina)|
|Key Market Opportunities||Technological advancements and growing demand for lean operation|
|Key Market Drivers||Augmented demand from essential industries Expansion of the e-commerce industry globally Government initiative for standard and efficient packaging|
The Global Contract Packaging Market would register a growth of ~6.5% during the forecast period.
High recycling costs and stringent government regulations are the key restraining factor for the Global Contract Packaging Market
EMEA would enjoy the upper hand in the Global Contract Packaging Market