Contract packaging market is characterized by a service that is outsourced by product manufacturers from numerous industries in order to preserve, shield, and distribute the product to the retail platform. Contract packaging services are provided in various shapes and sizes for both liquid and rigid products.
End-users of contract packaging include food & beverage, pharmaceutical, consumer goods, and cosmetic industries. Food & beverage is one of the key sectors that employs contract packaging services. Growing population and urbanization globally has led to rapid demand for packed and ready-to-eat food, which is further expected to drive the global contract packaging market. Further, the high growth in the alcoholic and non-alcoholic beverage industry which employs closures, caps, bottle, can, and pouch is expected to be a driver for this industry over the next seven years. Food & beverage industry is followed by the pharmaceutical sector owing to the rising manufacturing of drugs globally.
By packaging type, the contract packaging sector is classified as primary, secondary and tertiary. Primary packaging, which is used as the first level of packaging to avoid punctures, dents, and abrasion of the product, holds the highest share in the global market. A few primary packaging products include bottles, beverage cans, tins, paper envelopes, wraps and blister packs. Primary packaging is followed by tertiary packaging and secondary packaging.
The adoption of contract packaging is expected to grow over the next few years, as manufacturers view contract packaging as a strategic imperative in order to narrow lead time for the product. Several regulations and standards imposed by government bodies in Europe and the Americas aiming to protect human health is one of the key challenges for contract packaging market.
For instance, regulations such as EC 1935 (2004) possess a challenge of limiting the use of raw materials such as ceramics and plastics in packaging, leading to lower volume of packaging offered by the contractors. Further, delay in production or early production schedules are expected to pose as a challenge for packaging contractors. New inventions in manufacturing technologies such as automation, is expected to amplify the adoption of contract packaging globally.
In terms of geography, North America occupies a dominant position in contract packaging market. This demand is contributed to majorly by food & beverage industry followed by consumer goods, which are distributed predominantly on e-commerce platforms. In addition, presence of major players such as Unicep and Summit Packaging Solutions in this region also contribute to the growth of contract packaging. Rapid growth of annual exports in several countries in Asia Pacific such as China, Malaysia and India, which are involved in larger global exports are expected to adopt greater contract packaging services in near future resulting in a faster growth rate.
Some of the prominent vendors include Sharp Packaging Systems, QAS COPAK Ltd., Summit Packaging Solutions, Unicep, GENCO SOLUTIONS, Stamar Packaging, GPA Global, AmeriPac, Nulogy Corporation, Aaron Thomas Company, CCL Industries Inc, Kelly Products Incorporated, Deufol, DHL International and Multi-Pack Solutions LLC. Some of other vendors include PHARMA TECH INDUSTRIES, Jones Packaging, Reed-Lane, Sonoco Products Company, and FedEx.
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