Contract Packaging Market Foreseen To Increase Exponentially By 2030 Contract Packaging Industry The

Rahul Nikade

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Contract Packaging Market Foreseen To Increase Exponentially By 2030

Contract Packaging Industry

The global contract packaging market was valued at USD 69.35 billion in 2023 and is projected to expand at a compound annual growth rate (CAGR) of 6.2% from 2024 to 2030. This growth is primarily driven by the increasing trend of outsourcing among companies across various industries, which is fueling the demand for contract packaging solutions worldwide. Additionally, the rising need for customizable packaging formats is expected to further accelerate market growth. The trend of outsourcing in the global packaging sector is significantly influencing the market's expansion. Numerous companies, particularly within the food and beverage, pharmaceuticals, cosmetics, and consumer goods sectors, are increasingly turning to contract packaging organizations to meet their packaging needs.

This outsourcing trend has been motivated by the need to reduce operational costs, enhance efficiency, and gain access to specialized packaging expertise and cutting-edge technologies. Companies often face challenges in managing fluctuating demand for their products, making it difficult to maintain efficient in-house packaging operations. Contract packaging providers offer the flexibility to scale packaging operations in line with demand, which helps companies avoid the risks associated with overcapacity or undercapacity in their own facilities. Consequently, the variability in demand and production needs is expected to benefit the market as a whole. To remain competitive and address the diverse requirements of their clients, contract packaging companies are investing in advanced, automated packaging equipment, technologies, and processes.

By utilizing these advanced technologies, companies can benefit from state-of-the-art capabilities without making substantial capital investments. For example, in May 2023, Linney invested in an automated fulfillment and co-packing system to support the growth of e-commerce. This investment aims to improve operational efficiency and accelerate order processing while aligning with Linney’s environmental, social, and governance (ESG) objectives, particularly through reduced energy consumption. As a result, access to these advanced packaging technologies is expected to be a key driver of market growth throughout the forecast period. Contract packaging service providers are also expanding their global reach through mergers and acquisitions. They can enter new markets by offering localized packaging solutions and leveraging the established infrastructure, knowledge of local regulations, and market preferences of their acquired partners.

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For example, in October 2023, Sharp Services, LLC acquired Berkshire Sterile Manufacturing, a Massachusetts-based contract development and manufacturing organization (CDMO) specializing in the sterile filling of vials, syringes, and cartridges for the biotech and pharmaceutical industries. This acquisition allows Sharp Services, LLC to expand its offerings to include fully integrated small- to medium-scale sterile injectable services, complementing its existing clinical supply, packaging, and distribution solutions. By combining Sharp’s commercial pharmaceutical packaging expertise with Berkshire’s sterile manufacturing capabilities, the acquisition enables them to provide global, integrated CDMO services to biopharma clients.

Key Contract Packaging Company Insights

Key players in the contract packaging market are implementing diverse strategies, including expansions, mergers and acquisitions, and geographic expansions, to enhance their market presence and stimulate growth.

In March 2024, PoppyPac, a UK-based, flexible packaging contract manufacturer, invested 675,000 USD in a new facility to add filling lines and boost production following a new contract win with an existing customer. This investment allowed them to increase supply to the market and expand their business. The company recruited additional operators, team leaders, and engineers to support the project and meet the growing demand across various product lines. In addition, PoppyPac’s strategic investments aim to drive sustainability-driven growth by expanding into new markets and market segments, with plans for production plants in India, MENA countries, and the U.S.
In September 2023, Kinaxia Logistics Ltd., significantly expanded its contract packing operations by increasing the size of its cleanroom facilities at its site in Trafford Park, Manchester, UK. This expansion includes the creation of two additional cleanrooms, bringing the total to three cleanrooms spanning 5,000 sq ft. These cleanrooms are equipped with air filtration systems to maintain a controlled environment for packing food, drink, and pharmaceutical items. The company aims to enhance efficiency and scalability in its co-packing business through the installation of a Nulogy cloud-based software system. This system provides real-time reporting on production line efficiency and availability, contributing to improved production performance.

Key Contract Packaging Companies:

The following are the leading companies in the contract packaging market. These companies collectively hold the largest market share and dictate industry trends.