May 18, 2024
Contract Packaging Market

Rising Outsourcing In Pharmaceutical Sector To Drive Growth In The Global Contract Packaging Market

The global Contract Packaging Market is estimated to be valued at US$ 66.37 Bn in 2023 and is expected to exhibit a CAGR of 9.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

The contract packaging market involves outsourcing of secondary packaging operations by pharmaceutical, food & beverages, personal care, and other industries to third-party packaging and logistic service providers. These service providers undertake vital packaging operations such as designing packaging, counting, sorting, packaging in trays, pouches, inserts, cartons, and palletizing for safe and efficient distribution. Contract packaging offers several advantages such as reduced cost of in-house packaging operations, freeing up of capital, greater flexibility, and access to advanced packaging technologies. It allows brand owners to focus on their core business while leveraging expertise of packaging specialists. The growing pharmaceutical industry relies heavily on contract packagers for meeting strict compliance standards for labeling, serialization, and distribution of drugs.

Market key trends:

One of the key trends in the contract packaging market is increased outsourcing of packaging operations by pharmaceutical companies. The pharmaceutical industry is under growing regulatory pressure for serialization and unique device identification. Contract packaging providers help pharmaceutical manufacturers comply with complex serializing and tracking requirements at lower costs than in-house operations. Their expertise allows pharmaceutical manufacturers to focus on drug development while leveraging real-time data tracking, advanced packaging automation, and operational efficiencies offered by contract packagers. This is expected to drive significant outsourcing growth in pharmaceutical packaging.

Porter’s Analysis

Threat of new entrants: Low capital requirements and availability of machinery and equipment from second-hand markets present low entry barriers. However, existing players have strong brand recognition and distribution networks which new entrants may find difficult to challenge.
Bargaining power of buyers: The bargaining power of buyers is moderate as leading players have strong production capabilities and supply contracts. However, availability of substitutes provides alternatives to buyers.
Bargaining power of suppliers: Suppliers have moderate bargaining power since raw materials required for contract packaging are common and widely available from numerous regional and global players. However, highly specialized requirements pose supplier constraints in some segments.
Threat of new substitutes: Threat from substitutes is moderate as switching to alternate packing solutions requires capital investments and depends on packaging specifications and regulations. However, e-commerce is providing new avenues.
Competitive rivalry: Intense as the market is fragmented with numerous global and regional players competing on pricing, innovation, and quality. Leading players differentiate through integrated offerings and sustainability.

Key Takeaways

The Global Contract Packaging Market Demand is expected to witness high growth, exhibiting CAGR of 9.7% over the forecast period, due to increasing demand from pharmaceutical and consumer goods industries. Stringent regulations and desire for efficiency are fueling outsourcing of packaging operations.

Regional analysis: North America dominates the global contract packaging market accounting for over 35% revenue share in 2023, driven by well-established pharmaceutical industry in the US. Asia Pacific is anticipated to be the fastest growing market exhibiting a CAGR of around 11% during the forecast period led by emerging markets of India and China with growing consumer goods sectors.

Key players: Aaron Thomas Company, Multipack Solutions, Pharma Tech Industries, Reed-Lane Inc., Sharp Packaging Services, UNICEP Packaging, Green Packaging Asia, Jones Packaging Inc., Stamar Packaging, Budelpack Poortvliet BV, and Complete Co-Packing Services Ltd are some of the prominent players operating in the global contract packaging market. Key players are focusing on new product development and collaborations to enhance their market share.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it