Food Contract Manufacturing Market Size, Share, & Trend Analysis Report, By Service (Manufacturing, Packaging, Custom Formulation And R&D), By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global food contract manufacturing market was valued at USD 120.96 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9.5% during the forecast period. Increasing demand for outsourcing food manufacturing is expected to have a positive impact on the industry growth. The rising prevalence of coronavirus coupled with the increasing R&D spending is expected to have a positive impact on the food contract manufacturing market during the forecast period. Furthermore, factors such as panic buying of comfort food for the duration of the pandemic and rising private equity investment in contract manufacturing are expected to boost industry growth.

The COVID-19 pandemic led to prolonged lockdowns which resulted in a considerable surge in buying convenience foods as consumers were stuck inside their houses. Increasing demand for processed food has resulted in creating opportunities for the new contracts designed for the food contract manufacturers. The pandemic also prompted the restructuring of supply chains, which is expected to augment the industry growth.

OEMs and upcoming food manufacturers have limited manufacturing capabilities due to which contract manufacturing is on the rise. Moreover, food contract manufacturers have started to offer different value-added services such as packaging, research, consulting, and warehousing which has enabled food companies to grow rapidly.

As demand surged in 2020, food-processing companies were unable to produce at such a scale due to which they had to rely on contract manufacturers. Many contract manufacturers have been able to bag long-term contracts bringing them to the forefront. Moreover, private equity investment has enabled contract-manufacturing companies for capacity expansion or provide other vital services.

Over the years, the food companies have become smarter to leverage contract manufacturers in a move to distance themselves from the incremental costs that are attached to the manufacturing. It also allows food companies to free up their cash flows, which played a key role during the pandemic, making it a favorable environment for the manufacturers to succeed.

Service Insights

The manufacturing service led the market and accounted for 66.5% of the global revenue share in 2021. Food companies looking to enhance value and efficiency, production constraints, the rise of e-commerce, and private equity investment have been the key factors in augmenting the industry growth.

Food contract manufacturers, through their manufacturing as a core service, offer different processes, which include dry blending, spray drying, and extrusion. Some food companies also offer a specific recipe for food processing, which is expected to boost the industry's growth.

The packaging service for these products majorly involves primary forms of packaging those mainly used to protect the product from contamination. These include stand-up pouches, shrink-wrapping, blister packs, and jars. These manufacturers are also focusing on adding secondary packaging to create a one-stop shop for food manufacturing.

Custom formulation and R&D are estimated to witness growth at a CAGR of 11.2% from 2022 to 2030, in terms of revenue. Small and medium-scale food companies often do not have a dedicated R&D team to formulate new products or the consumer insights needed to further growth. Food contract manufacturers have the personnel, equipment, and expertise to assist them.

Regional Insights

Asia Pacific led the market and accounted for over 52.7% of the global revenue in 2021. Rising population, increase in household income and industrialization has rapidly transformed the food industry. This has created a huge requirement for food manufacturers in the region. China dominates the market share due to the global demand for food products. 

North America especially in the U.S. is under a transition phase. Food companies are becoming more reliant on contract manufacturers for product formulation, quality control, and production capabilities. Moreover, this industry consolidation is happening rapidly which is expected to boost industry growth.

Manufacturers are benefiting from the robust food processing equipment industry in Europe. The BREXIT and the pandemic are expected to prompt food companies to restructure their supply chains relying on Asia Pacific countries, which is expected to open up capacity expansions for this industry in Europe.

The demand for convenience foods in the manufacturing service in Australia is estimated to witness growth at a CAGR of 9.1% during the forecast period. Favorable government support, focus on quality and producing clean and natural food products are some of the factors, expected to result in augmenting the industry growth within the country.

Key Companies & Market Share Insights

Major manufacturers are witnessing rapid consolidation across the value chain. Moreover, companies have started providing additional value-added services such as packaging, R&D expertise, and storage, which has triggered industry growth. Moreover, the pandemic is highlighted supply chain issues, which also expected to prompt capacity expansion.

Food contract manufacturers have set up innovative strategies leading to co-development opportunities. Food companies have increasingly started to adopt a renewed supply chain strategy where manufacturing plays a central role, creating a competitive advantage. This results in mitigating cross-border risks and maximizing sales. Some prominent players in the global food contract manufacturing market include:

• Fibro Foods

• Hindustan Foods Limited

• Hearthside Food Solutions LLC

• Nikken Foods 

• Christy Quality Foods (CQF)

• De Banketgroep B.V.

• HACO AG

• SK Food Group

• Pacmoore Products Inc.

• Cremica

• Kilfera Food Manufacturers Ltd

• Nutrascience Labs, Inc

• Thrive Foods LLC.

• Orion Food Co., Ltd

• Omni blend 

Food Contract Manufacturing Market Report Scope

Segments covered in the report

This report forecasts revenue growth at global, regional & country levels, and provides an analysis on the latest trends and opportunities in each of the sub-segments from 2017 to 2028. For this study, Grand View Research has segmented the global food contract manufacturing market report based on the service and region:

• Service Outlook (Revenue, USD Million, 2017 - 2030)

  • Manufacturing

    • Convenience foods

    • Bakery products

    • Dietary supplement

    • Confectionery

    • Dairy products

    • Others

  • Packaging

    • Convenience foods

    • Bakery products

    • Dietary supplement

    • Confectionery

    • Dairy products

    • Others

  • Custom formulation and R&D

    • Convenience foods

    • Bakery products

    • Dietary supplement

    • Confectionery

    • Dairy products

    • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • Italy

    • UK

    • Spain

  • Asia Pacific

    • Australia

    • China

    • India

    • Japan

    • South Korea

  • Central & South America

    • Argentina

    • Brazil

  • Middle East & Africa

    • Saudi Arabia

    • South Africa

    • UAE