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Contract Packaging and Fulfillment Service - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2019 - 2029

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  • 120 Pages
  • February 2024
  • Region: Global
  • Mordor Intelligence
  • ID: 5120010
The Contract Packaging and Fulfillment Service Market size is estimated at USD 98.31 billion in 2024, and is expected to reach USD 168.91 billion by 2029, growing at a CAGR of 11.43% during the forecast period (2024-2029).

The increased demand from food and beverage and pharmaceutical industries was further fuelled by the COVID-19 pandemic. Furthermore, growth of the e-commerce industry globally are among some of the major factors driving growth of the market studied over the forecast period.

Key Highlights

  • In recent years, the contract packaging and fulfilment services market has witnessed significant growth, owing to the changing preference of manufacturing firms toward contract packagers, as they are increasingly focusing on cost optimization, to enhance their core competency. Many industry experts claim that these services can reduce operational costs by 7-10%, due to the reduced maintenance costs of machines and labor costs.
  • Many governments are also mandating stringent laws and regulations on the labeling and packaging of drugs and food products, which is further expanding the scope of contract packaging. For instance, in the United States, due to similar laws, the companies have preferred to outsource their manufacturing and packaging due to capital and other regulatory barriers.
  • In developed markets, such as Europe and North America, the need to enhance quality is also forcing companies to invest in the studied market. In these regions, the role of contract packaging and fulfilment service providers shifted from temporary facility for external packaging to a strategic innovation partner, which ensures even shorter delivery times and can produce even smaller production batches.
  • The market is also witnessing the emergence of associations and organizations to create more awareness in the studied market. European Co-Packers Association and Contract Packaging Association are a few examples. There are around 1,000 contract packaging vendors active in Europe, out of which 40-50% are small companies.
  • With the outbreak of COVID-19, the contract packaging and fulfillment services market has witnessed tremendous growth as the e-commerce market has taken a boom owing to lockdown and social distancing norms where the majority of the consumer are preferring online channel for shopping and companies are outsourcing their packaging end to end or standalone services to meet the growing demand.

Contract Packaging and Fulfillment Service Market Trends

Contract Packing is Expected to Witness Significant Growth

  • Contract packing service holds one of the largest market shares in the studied market as it comprises of various operation ranging from Bottling/Filling, Packaging, Labeling, Wrapping, among other that are an essential part of contract packaging services. Also, the contract packing are divided into three parts- primary packaging, secondary packaging, and tertiary packaging. ​
  • Primary packaging involves direct contact with the product or is the first packaging layer in which the product is enclosed, which enables the user to protect and preserve the product from external contamination, damage, and spoiling. ​
  • Primary contract packaging provides 'mission-critical' capabilities that may be inaccessible to manufacturers, especially when it comes to projects that require short runs or frequent changeovers, such as new or niche products, or seasonal demand, that are usually outside of primary manufacturing economies.​
  • The primary packaging typically includes blister packs, clamshell packaging, paperboard packaging, unit dose packs, and shrink-wrapping. Players, such as the Wasdell Packaging Group, provide primary contract packaging services that include blister packing, container filling, strip packs, and sachet filling and packing.​
  • The rising demand from other end-user industries, such as food and beverages and personal care, for the primary packaging, has left the players to increase the production of their end products, thereby making it essential for them to reduce the time to markets by outsourcing the packaging activities. This is expected to boost the primary contract packaging market over the forecast period.​

Asia-Pacific to Witness Highest Growth

  • The pandemic has fueled E-commerce growth, including the cross-border online sales between Chinese sellers and European buyers. According to CNBC, China’s cross-border e-commerce sales rose to 31.1% in 2020, while warehouses grew by 80%. Some of the Chinese market's big giants, such as Alibaba, have been expanding their cross-border e-commerce business through the AliExpress platform and Cainiao logistics arm. This is expected to drive the Fulfillment and warehousing services in the region. ​
  • According to Alibaba, cross-border e-commerce has contributed a 51% year-on-year surge in Cainiao’s revenue to USD 1.74 billion in the last three months of 2020. Revenue from the company’s international commerce wholesale rose 53%, accounting for USD 577 million during that time. This increases opportunities for the vendors in the market to expand the warehousing services in the Asian market. ​
  • Also, co-packing services are increasing in China, with more and more vendors venturing into the business. For instance, Sofeast, a chines-based company, offers Co-packaging for Chinese buyers with local suppliers and enable the customers to outsource the labeling and packaging services by eliminating the need for IP, pricing, or distribution channel information, ​
  • Furthermore, trends like same-day deliveries and catering orders from various online marketplaces, like Amazon, eBay, flipkart, and snapdeal, have helped organizations gain expertise. Also, Amazon, Flipkart, is expanding its foothold in the developing economy by opening its fulfillment center. For instance, in July 2020, Amazon India announced to expand its fulfillment network in India, with ten new Fulfillment Centers (FC) and an expansion of 7 existing buildings. With this, Amazon expands its operations network to sixty fulfillment centers across 15 states in India to increase the storage capacity by 20% to total more than 32 million cubic feet. This helps in faster delivery and growth of packaging, logistics, and transportation. ​

Contract Packaging and Fulfillment Service Industry Overview

The Contract Packaging and Fulfillment Service Market is highly competitive owing to the presence of multiple players in the market operating their business in domestic and international markets. The market appears to be moderately concentrated with the major players adopting strategies like expansion among others in order to stay competitive and expand their reach. Some of the major players in the market are Aaron Thomas Company, ActionPak Inc., Assemblies Unlimited among others.
  • March 2021 - ActionPak Inc. announced that it completed the 196-kW rooftop solar installation on its new 175,000 sq ft, packaging facility located in Camden, New Jersey, to do both primary and secondary packaging of food and OTC products under strict SQF and FDA guidelines. The 491 solar panels are said to offset 20% of the electric usage at the newly constructed building.
  • May 2020 - Sharp (UDG Healthcare PLC) announced the acquisition of a pharmaceutical packaging facility from Quality Packaging Specialists International LLC (QPSI). The facility is 160,000 sq. ft and has full regulatory approval. It encompasses 12 primary production suites, space for multiple secondary packaging lines for offering both primary and secondary pharmaceutical packaging including bottling, blistering, vial labeling and medical device kitting as well as serialization services.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Threat of New Entrants
4.3.3 Bargaining Power of Buyers/Consumers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Assessment of COVID-19 Impact on the Market
5.1 Market Drivers
5.1.1 Companies Looking to Gain Competitive Advantage by Outsourcing Non-core Operations
5.1.2 Steady Demand from Key Verticals, such as the Food and Beverage Sector
5.1.3 Entry of Key Warehousing Vendors in the Field of Contract Packaging Expected to Drive Innovation
5.2 Market Restraints
5.2.1 Stringent Government Regulations
5.2.2 Competition from In-house Packaging
5.3 Industry Regulations and Standards
5.4 Evolution of Contract Packaging
6.1 Service Type
6.1.1 Packaging Design & Prototyping
6.1.2 Contract Packing (Bottling/Filling, Packaging, Labeling, Wrapping, etc.)
6.1.3 Package Testing
6.1.4 Warehousing and Fulfilment
6.1.5 Other Service Types
6.2 End-user Type
6.2.1 Food
6.2.2 Beverage
6.2.3 Pharmaceutical
6.2.4 Household & Personal Care
6.2.5 Other End-user Segments
6.3 Geography
6.3.1 North America
6.3.2 Europe
6.3.3 Asia Pacific
6.3.4 Latin America
6.3.5 Middle East & Africa
7.1 Company Profiles
7.1.1 Aaron Thomas Company, Inc.
7.1.2 ActionPak Inc.
7.1.3 Assemblies Unlimited, Inc.
7.1.4 PAC Worldwide, Inc.
7.1.5 AmeriPac Inc
7.1.6 Kane Logistics
7.1.7 FW Logistics
7.1.8 Warren Industries, Inc.
7.1.9 Swan Packaging Fulfillment, Inc.
7.1.10 Multi-Pac Solutions LLC
7.1.11 Sharp (UDG Healthcare plc)
7.1.12 Boughey Distribution Ltd
7.1.13 Budelpack Poortvliet B.V
7.1.14 Wasdell Packaging Group
7.1.15 Sonoco Products Company

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Aaron Thomas Company, Inc.
  • ActionPak Inc.
  • Assemblies Unlimited, Inc.
  • PAC Worldwide, Inc.
  • AmeriPac Inc
  • Kane Logistics
  • FW Logistics
  • Warren Industries, Inc.
  • Swan Packaging Fulfillment, Inc.
  • Multi-Pac Solutions LLC
  • Sharp (UDG Healthcare plc)
  • Boughey Distribution Ltd ​
  • Budelpack Poortvliet B.V
  • Wasdell Packaging Group
  • Sonoco Products Company