Contract Packaging Market Product Overview
Contract packaging denotes the services related with packaging for customers, by outsourced associates for various packaging solutions that they offer. Contract Packaging companies are basically “third party vendors” that has specialty in packaging activities. In modern times the manufacturing companies have initiated to outsource the packaging related activities and other services to third party vendors. Companies usually choose this option for outsourcing since they might lack essential skills, proficiency, manpower or the basic infrastructure that is needed for such activities. The major advantage of outsourcing can be that the company can focus more on its manufacturing activities without having the unnecessary overhead of packaging associated activities. This can help a company to be more efficient and effective while functioning. It can improve the production capacity of the manufacturing units.
Market size and Forecast
The contract packaging market was worth USD 27.36 Billion in 2017 and is anticipated to reach USD 49.64 Billion by 2027, at a significant CAGR around 11.7% during the year 2018-2027. The growth in contract packaging market can be attributed mainly to the factors such as technological advancement and cost optimization. The cost optimization by some of the major manufacturing units is also a factor for the expansion of the contract packaging market. In August 2017, a contract packaging company named ‘Surepharm Services’ installed the Blister Express Center to improve its manufacturing capacity. It offers easy, quick, and reliable solutions to accomplish the packaging needs with minimum of 10 medicines in different pack sizes, besides improving the flexibility to meet the wide range of contracts. This machine is equipped with three-dimensional (3D) format changeover in less than 30 minutes.
The market can be segmented on the basis of services type and by end-user. Services segments consist of primary, secondary and tertiary packaging. The majority demand of consumers consists of secondary packaging as it is not only used for packaging materials but also used for marketing and branding of the product. By End-user it is segmented into food and beverages, pharmaceuticals, home products and fabrics and cosmetics and beauty care. Food and Beverages market currently dominates the market on the account of supply of food item across various regions.
By region, market is segmented into North America, Europe, Latin America, Asia-Pacific and Middle East. North America currently dominates contract packaging market. The main reason for domination is huge demand from food and beverage industry which is followed by consumer goods. Consumer goods are distributed on the platforms such as E-commerce and online retailing. Increase in the disposable income in U.S. will also escalate the market size of global contract packaging.
Asian countries such as China and India will also witness sharp rise in the demand for the contract packaging on the account of larger global exports by the developing countries such as China and India.CLICK TO DOWNLOAD FREE SAMPLE
Our in-depth analysis segmented the contract packaging market in the following segments:
By Services type
By End-User type
Global contract packaging market is further classified on the basis of region as follows:
Growth Driver and Challenges
The one of the major growth drivers for the contract packaging market is technological executions. Increasing technological advancement in the global contract packaging market increases the market size. The factors include fast paced solutions provided by companies. The latest trend gaining momentum in the market is growing e-commerce industry. The increasing internet penetration and increasing trend of online shopping will boost the global contract packaging market during the forecast period. This is because companies that are selling their products through the e-commerce platform lack in packaging facility at respective companies. Therefore, third party packaging or contract packaging services becomes an easy mode of selling online products.
The cost of raw materials is also a factor determining the market size of the contract packaging market. Besides this, the fluctuation in prices of raw materials is one the major challenge faced by sellers. The wide gap between demand and supply chain has considerable impact on the contract packaging market.
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