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North America Contract Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 120 Pages
  • October 2021
  • Region: North America
  • Mordor Intelligence
  • ID: 5458912

The north america contract packaging market is expected to register a CAGR of 12.5% over the forecast period (2021 - 2026). With the outbreak of COVID-19, the contract packaging 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 prefer online channels for shopping, and companies are outsourcing their packaging end to end or standalone services to meet the growing demand.

Key Highlights

  • Increasing demand and the changing preference of manufacturing firms toward contract packagers, along with the U.S. government imposing various laws and regulations on the labeling and packaging of food, beverages, and pharmaceutical drugs, there is a positive impact on the demand for contract packaging in the region.
  • Contract packaging for household and personal care industry has seen an increasing demand in the region with the pandemic, as there was a shortage in supply of hand sanitizers, disinfectant liquids, etc., which has compelled the U.S. cosmetics manufacturing industry to retrofit their facilities to produce these necessities which, while providing opportunities, may have also slowed production of the usual range of products.
  • Many governments are also mandating stringent laws and regulations on the labeling and packaging of drugs and food products, 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
  • In the current scenario, manufacturers require a variable cost structure based on the volume. This volume might differ from a small quantity ranging from 100 liters quantity to a large one. However, packaging a minimum order might result in a loss for contract packagers, owing to the total costs, which could lead to manufacturers shying away from outsourcing their projects. Regulatory barriers.

Key Market Trends

Food and Beverage Industry is one of the Significant Factor for Growth of Market

  • With the rising demand and changing preference of food production firms toward contract packagers, and the food companies increasingly focusing on cost optimization and their core business, most of them have been outsourcing their packaging services activities to third party contract food packagers, owing to the demand in the market studied.
  • Also, 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 the contract packaging market. For instance, United States witnessed an increase in the demand for contract packaging in the food, industries, owing to the inability of an in-house packaging facility for few companies in this region.
  • Rising demand for online shopping, and added layers for packaging protection for online purchases, along with the increasing demand for packaging in food and beverage, pharmaceutical needs, household, and personal items, majorly during the covid-19 pandemic, has increased the demand for contract packaging in the region. With the pandemic, CPG companies in the region have pushed their supply chains for even faster turnarounds and flexibility to adjust to sudden shifts in demand. Many of them have supplemented their manufacturing capabilities through contract packagers, which allowed them to also expand and innovate their products or to focus on their core products.
  • Contract beverage packaging ensures the reliable distribution of beverages in the value chain and reduces post-production damage. Contract packaging is aimed to protect the product from external and environmental damage. One of the main factors driving the growth of the contract beverage packaging market is the changing consumption patterns of the consumer with an increasing preference for RTD beverages.
  • The cannabis industry is anticipating growth in food and beverage, health and wellness, cosmetics, skincare & topicals, pet supplements, and pharmaceuticals, which shows the potential of contract packaging in the cannabis industry. As the industry continues to grow, cannabis companies are gaining the capacity and knowledge to offer contract packaging services. Some of the companies with experience and expertise have contracted out labeling services and other secondary packaging services. However, Under section 244 of the Cannabis Regulations, licensed processors must notify Health Canada of their intent to sell a cannabis product they have not previously sold in Canada.

Primary Packaging Holds a Significant Share

  • 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.
  • Industries such as the food and beverage and pharmaceutical industry are one of the biggest adopters of primary packaging, therefore, the growth in the overall production capacity of these industries is expected to drive the adoption of primary contract packaging services across the globe.
  • The primary packaging products have gained significant importance in the pharmaceutical sector during the last few years as they are the being used for protecting the medicines and drugs against any unfavourable external elements such as biocontamination, physical damage, degradation and counterfeiting. The contract packaging market expansion is primarily being driven by increased research and development activities, newer innovations in packaging materials, growth in the global generics market, to name a few, as well as the rapidly rising demand for reusable and eco-friendly packaging products.
  • The rising demand from end-user industries, such as household 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 over the forecast period.

Competitive Landscape

The North America Contract Packaging market is Moderately Fragmented. The North America Contract Packaging Market is competitive and consists of some influential players. In terms of market share, some of these important actors currently manage the market. These influential players with a noticeable share in the market are concentrating on expanding their customer base across foreign countries. These businesses are leveraging strategic collaborative actions to improve their market percentage and enhance their profitability.

  • Feb 2021- The Association for Contract Packagers and Manufacturers (CPA) partnered with Nulogy. The partnership will grant CPA members complimentary access to Nulogy University, a proprietary online training platform for contract packaging and contract manufacturing (CP/CM) businesses.
  • March 2021- ActionPak Inc. has 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 2021 - Sharp, a subsidiary of UDG Healthcare plc, a global leader in contract packaging and clinical supply services, has invested USD17 million in its Conshohocken, PA location. The new 4-acre plot is directly adjacent to Sharp’s two enduring commercial pharmaceutical packaging buildings, which collectively form the organization’s Blistering Centre of Excellence and is the most developed addition to an ongoing capacity development project at the Conshohocken campus.

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Table of Contents

1.1 Study Assumptions
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Intensity of Competitive Rivalry
4.2.5 Threat of Substitutes
4.3 Impact of COVID-19 on the Contract Packaging Industry
5.1 Market Drivers
5.1.1 Growth in End-Use Industries
5.1.2 Rapid Technological Advancements
5.1.3 Development in the Retail Chain
5.2 Market Restrains
5.2.1 In-House packaging
5.2.2 Increasing Lead time & Logistics Cost
5.3 Market Opportunites
5.3.1 Pharmaceutical Industry
5.3.2 Design of the Products
6.1 By Service
6.1.1 Primary Packaging
6.1.2 Secondary Packaging
6.1.3 Tertiary Packaging
6.2 By End - User Vertical
6.2.1 Beverages
6.2.2 Food
6.2.3 Pharmaceuticals
6.2.4 Home and Fabric Care
6.2.5 Beauty Care
6.2.6 Others
6.3 By Geography
6.3.1 United States
6.3.2 Canada
7.1 Company Profiles
7.1.1 Berkeley Contract Packaging
7.1.2 Central Glass
7.1.3 Unicep
7.1.4 MJS Packaging
7.1.5 Stamar Packaging
7.1.6 TricorBraun
7.1.7 Premier Packaging
7.1.8 DHL
7.1.9 Sharp Packaging Services
7.1.10 Multipack

Companies Mentioned (Partial List)

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

  • Berkeley Contract Packaging
  • Central Glass
  • Unicep
  • MJS Packaging
  • Stamar Packaging
  • TricorBraun
  • Premier Packaging
  • DHL
  • Sharp Packaging Services
  • Multipack