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The global contract packaging market size is estimated to grow by USD 20.9 billion between 2023 and 2028, exhibiting a CAGR of 6.54%. The growth rate of the market depends on several factors such as the total cost of ownership (TCO) advantage by contract packaging, the growing automotive market in emerging economies, and the increasing demand for packaged products. The market is witnessing strong expansion, driven by the growing automotive sector in developing nations. Automotive manufacturers are increasingly turning to contract packaging firms for streamlined transportation of vehicle components. With the worldwide automotive industry set to grow, particularly in emerging markets such as China and India, there's a substantial uptick in demand for contract packaging services. As the middle-class demographic expands, desires for car ownership are boosting automotive sales, thereby fueling further demand for contract packaging solutions.
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The food and beverages segment is estimated to witness significant growth during the forecast period. Manufacturing firms in the packaging industry increasingly turn to third-party players for contract packaging services to produce consumer-packaged goods in various sectors, including food and beverages, personal care, and pharmaceuticals. This trend is driven by cost optimization, as outsourcing allows firms to focus on their core business and reduce operational costs. Factors influencing the demand for contract packaging include urbanization, rising disposable incomes, and the growing middle class.
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The food and beverages segment was the largest segment and was valued at USD 24.58 billion in 2018. Moreover, new products and technologies in the industry cater to customers' preferences for fresh, healthy, and convenient foods, as well as eco-friendly alternatives. Mil-spec packing and earth-friendly designs prioritize sustainability and customization. In the pharmaceutical industry, contract packing agencies provide solutions for new drugs, medical sciences, and patient compliance, ensuring medication adherence, drug safety, and government regulations. Digitalization streamlines the contract packaging process, from API sourcing alternatives to sealant technologies. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.
Based on the type, the market has been segmented into primary, secondary, and tertiary. The primary segment will account for the largest share of this segment.?The global market in 2023 was dominated by primary packing, which refers to the outermost covering that comes into contact with the product. This type of packing, used in industries such as food and beverage, personal care and cosmetics, pharmaceuticals, electronics, and e-commerce, is essential for confining, safeguarding, and maintaining the final product. Primary packing can be made of various materials, including plastic, glass, and paper and paperboard. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.
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North America is estimated to contribute 37% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in North America is experiencing growth due to the expanding e-commerce sector and increasing consumer awareness towards eco-friendly packing. Key players, including packing companies from the US, are adopting automation and eco-sensitive designs in response. The food & beverage, personal care & cosmetics, pharmaceuticals, electronics, and e-commerce industries are driving the demand for various packing operations and products, such as bagging/pouching, boxing & cartoning, wrapping & bundling, and labelling. Essential industries, including government initiatives in developing countries, are also contributing to the market's growth. Hence, such factors are driving the market growth in North America during the forecast period.
In the dynamic and evolving landscape of the manufacturing industry, third-party contract packaging agencies have emerged as crucial players in cost optimization for firms focusing on their core business. The packaging sector, particularly contract packaging, has witnessed significant advancements with the advent of new products and technologies. Urbanization and rising disposable incomes have expanded the consumer base for various consumer-packaged goods, including personal care, food and beverages, and pharmaceutical industry offerings. Environmental concerns have become increasingly important, driving the demand for economical packaging options and earth-friendly alternatives. Eco-sensitive package designs that prioritize sustainability and customization are gaining popularity. The packaging industry's response to these trends includes the development of mil-spec packaging solutions that meet stringent requirements while minimizing environmental impact. In the pharmaceutical industry, the launch of new drugs and medical sciences necessitates innovative packaging solutions to ensure patient compliance and protect sensitive medicines. Patents and intellectual property rights further emphasize the importance of contract packaging agencies in delivering high-quality, cost-effective packing solutions for various industries.. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market is experiencing robust growth, fueled by the burgeoning automotive market in emerging economies. In the consumer packing market, manufacturing firms often turn to third-party contract packaging agencies to optimize costs and focus on their core business. Operational costs, including annual maintenance, are expected to be around 4% of the total cost for high-quality machines.
Moreover, with the fast-paced nature of the industry, companies must consider future scenarios and adapt to new products, technologies, and customer preferences. Urbanization and rising disposable incomes have led to increased demand for Mil-spec packing and eco-friendly alternatives. Sustainability, customization, and economical packing options are key trends in the market. Third-party contract packing agencies offer earth-friendly alternatives, eco-sensitive package designs, and digitalization to meet these demands. Hence, such factors are driving the market during the forecast period.
A key factor shaping the market growth is the growing demand for e-commerce sales. In the consumer goods sector, manufacturing firms often outsource their packing processes to third-party players, known as contract packing agencies. This approach allows companies to focus on their core business while optimizing operational costs. Contract packing involves the use of high-quality packing, such as mil-spec materials, to protect products during transportation.
Moreover, in today's digital age, customers have the power to publicly share their experiences, making it crucial for companies to invest in eco-friendly and economical packing options. Urbanization and rising disposable incomes have led to an increase in demand for consumer-packaged goods in various industries, including personal care, food and beverages, and pharmaceuticals. New products and technologies continue to emerge, requiring contract packaging agencies to offer customization and sustainability. Hence, such factors drive the market growth during the forecast period.
Growing demand of in-house packaging is one of the key challenges hindering the market growth. In the manufacturing sector, some firms prefer to handle the entire production process, including packing, in-house. This trend is driven by factors such as control over information, availability of resources, and high switching costs. However, third-party contract packaging offers cost optimization for firms focusing on their core business.
Moreover, the packing industry continues to evolve with new products, technologies, and customer demands. Urbanization, disposable incomes, and environmental concerns drive the need for economical packing options and earth-friendly alternatives. The market caters to various industries, including consumer-packaged goods, personal care, food and beverages, and pharmaceuticals. Hence, such factors are hindering the market growth during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Accu Tec: The company offers contract packaging solutions such as Bagging, Banding, Blister Packaging, Bundle Wrapping, Cellophane Tuck-Fold Wrapping, Center-Fold and Single-Wound Shrink Film, Club Store Multi-Packs and Displays.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Aaron Thomas Co. Inc, Bernard Laboratories Inc., CCL Industries Inc., Co Pak Packaging Corp., Deufol SE, FedEx Corp., gpa GLOBAL, Hanzo Logistics, Hollingsworth, Inizio, Marsden Packaging Ltd., Multi Pack Solutions LLC, PHARMA TECH INDUSTRIES, Reed Lane Inc., Silgan Holdings Inc., Summit laboratories Inc., Truvant Europe Sp. z o.o., and Verst Logistics Inc.
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report encompasses the entire market adoption cycle, ranging from the initial innovator phase to the subsequent laggard stage. It emphasizes adoption rates across various regions, determined by penetration levels. Additionally, the report outlines essential purchasing factors and factors influencing price sensitivity. This aids companies in assessing and formulating effective growth strategies.
Market Customer Landscape
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments.
The market is a significant segment in the broader packaging industry. Firms in this market specialize in providing customized packaging solutions to businesses, particularly those in the consumer goods sector. Firms use advanced technologies and materials, such as Third Party Logistics (3PL), Automation, and Sustainable Packaging, to offer cost-effective and efficient services. The industry is driven by factors like increasing consumer preferences for convenience and customization, the growing e-commerce industry, and the need for businesses to outsource packaging operations to focus on core competencies. Costs involve factors like materials, labor, and equipment, while production capacity and location are key considerations for firms. The market is competitive, with players like Contracs, C.O.S.T. Packaging, and Pactiv Corporation dominating the landscape. Firms must navigate regulatory environments and stay updated on industry trends to remain competitive.
Market Scope |
|
Report Coverage |
Details |
Page number |
171 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.54% |
Market Growth 2024-2028 |
USD 20.9 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.49 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 37% |
Key countries |
US, Canada, China, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aaron Thomas Co. Inc., Accu Tec, AmeriPac Inc., Bernard Laboratories Inc., CCL Industries Inc., Co Pak Packaging Corp., Deufol SE, FedEx Corp., gpa GLOBAL, Hanzo Logistics, Hollingsworth, Inizio, Marsden Packaging Ltd., Multi Pack Solutions LLC, PHARMA TECH INDUSTRIES, Reed Lane Inc., Silgan Holdings Inc., Summit laboratories Inc., Truvant Europe Sp. z o.o., and Verst Logistics Inc. |
Market dynamics |
Parent market analysis, market report, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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