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Middle East and Africa Contract Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 120 Pages
  • October 2021
  • Region: Africa, Middle East
  • Mordor Intelligence
  • ID: 5459117

The Middle East and Africa contract packaging market are expected to register a CAGR of 14.5% over the forecast period (2021 - 2026). With the outbreak of COVID-19, the contract packaging market has seen tremendous growth. The e-commerce market has exploded due to lockdown and social distancing norms. Most consumers prefer to shop online, and businesses are outsourcing their packaging end-to-end or as standalone services to meet the rising demand.

Key Highlights

  • The Middle East & African region have shown promising development in contract packaging services, especially in bottling and filling services. Also, for increased safety purposes, many companies outsourced their packaging due to the increased demand for food, beverage, pharmaceutical needs during the covid pandemic, owing to the demand for contract packaging.
  • Companies such as Suprapak, in October 2020, overcame an important series of technical challenges to create a shrinkable sleeve printed in flexography for Saudi Goody Products Marketing Co., one of the largest companies in Saudi Arabia's food and packaged goods industry. The label is used for Buencafé, Cofique coffee which is packaged in glass containers.
  • Many brands in the region are opting for co-packing instead of building their own manufacturing operations, including food safety and the need for financial and business agility. Co-packers are playing an important role for large food and beverage companies in the region that may not be able to justify spending on new equipment or to divert production from equipment in order to produce new and less profitable products.
  • A rigorous quality control process should be taken to manage the greater risk inherent in the packaging environment. The financial obstacle of a missed shipment is minor, as compared to an improperly packaged product, which could result in chargeback fines or recalls. The increasing adoption of automation and the benefits offered, like reducing labor costs and streamlining the operations, accordingly, are some of the factors that are impacting the contract packaging market.

Key Market Trends

Increase in Demand in E-Commerce will Significantly Drive the Market

  • E-commerce packaging companies are significant adopters and drivers of modern technology. The increasing number of e-commerce companies across the globe is also fueling the demand for packaging solutions by the industry to cater to the needs of customers in a better way. According to SEMrush, in June 2020, the average monthly visit to retail e-commerce websites accounted for 21.96 billion, driving the global eCommerce industry.
  • Moreover, with the high variability requirements from the CPG providing companies, customization along with speed in supply chain creates a challenge for the product offering companies through e-commerce, thereby escalating the requirements from the contract packaging companies for a customized e-commerce packaging solution, as they are built around flexibility, agility, and resourcefulness.
  • Contract packers and fulfillment services providers have smaller operations with limited volumes and fewer people involved in the decision-making process. This enables them to adopt e-commerce-ready packaging innovations more quickly. Moreover, by partnering with the e-commerce companies, it can streamline the path to optimized packaging for this significantly growing channel.
  • As technology, e-commerce, marketing, and consumer preferences continue to evolve, effective contract packagers enable their users to balance form and function. This is expected to boost the adoption of secondary contract packaging services.
  • The contract packaging services market is expected to grow owing to the rise of the e-commerce and food and beverage industries. According to Visa Middle East, the United Arab Emirates is considered the most advanced e-commerce market in MENA, with a penetration rate of 4.2%. E-commerce sales in the United Arab Emirates are estimated to grow by an average of 23% annually between 2018 and 2022.​ This increases the need for corrugated contract packaging services in the country and the rest of the world.

Beverage Industry is Observing a Significant Increase

  • With the increasing demand for essential infrastructure to process beverages and juices, beverage and juice manufacturers started focusing more on core activities, and as manufacturers are looking forward to packaging vendors that can have a dedicated area to store the raw material by providing the right technical expertise and timely and cost-effective solutions while keeping in mind hygienic processing standards, has given rise to the demand in contract beverage packaging services.
  • Many new-age beverages have widespread distribution but have limited volume, so these products often require manufacturing at multiple locations, involving volumes much too small to justify plant involvement. The demand for hot-fill products also has led large companies with big brands to turn to contract packers to meet their production needs.
  • Some services include contract bottle and can shrink bundling services, bottling and filling, pallet displays, promotional packaging, product displays, custom assembly, manual packaging, etc., for cans, bottles, jars, cartons.
  • For instance, StrongPack and Sidel partnered to create a co-packing hub for non-alcoholic beverages in Nigeria. In recent years, they recently started co-packing 60 cl PET bottles. Strongpak is looking forward to being a leading high-quality co-packer in Nigeria. It is the only beverage producer in Africa with Sidel’s Actis technology installed and can provide coated PET bottles for carbonated soft drinks (CSD). In August 2020, the company ordered a second PET line featuring this technology.
  • Industries such as the food and beverage and pharmaceutical industry are some 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 the primary contract packaging services across the globe.

Competitive Landscape

The Middle East and Africa Contract Packaging market are moderately fragmented. The development of regional markets and increasing shares of local players in foreign direct investments are the major factors promoting the fragmented nature of the market. Some of the players operating in the market are Central Glass, MJS Packaging, Stamar Packaging, TricorBraun, Premier Packaging, Sharp Packaging Services are some of the players.

  • August 2020 - An Indian company Shrinath Flexipack signed an agreement to build its first facility in Abu Dhabi-based industrial zone KIZAD in the UAE, which will have a total production capacity of up to 30,000 metric tons per annum. With the expansion of facilities in the Middle East, more manufacturing companies of food, beverage, household & personal care industries can outsource their packaging needs to co-packers.
  • Jan 2021 - Gulf Packaging Industries Ltd. (GPIL), a food packaging films company announced the expansion of its fourth BOPP (biaxially oriented polypropylene) line in its manufacturing complex located in Jubail Industrial City, with an additional capacity of 67,000 tons per yearannounced the expansion of its fourth BOPP (biaxially oriented polypropylene) line in its manufacturing complex located in Jubail Industrial City, with an additional capacity of 67,000 tons per yearannounced the expansion of its fourth BOPP (biaxially oriented polypropylene) line in its manufacturing complex located in Jubail Industrial City, with an additional capacity of 67,000 tons per year

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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 Industrial Value Chain Analysis
4.3 Industry Attractiveness - Porter's 5 Force Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat from new entrants
4.3.4 Threat of Substitute Products
4.3.5 Competitive rivalry within the industry
4.4 Industry Policies
5.1 Introduction
5.2 Drivers
5.2.1 Rapid Technology Advancements
5.2.2 Development in the Retail Chain
5.3 Restraints
5.3.1 In-house packaging
5.4 Opportunities
5.4.1 Pharmaceutical Industry
6.1 By Service
6.1.1 Primary Packaging
6.1.2 Secondary Packaging
6.1.3 Tertiary Packaging
6.2 By 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 Country
6.3.1 United Arab Emirates
6.3.2 Saudi Arabia
6.3.3 South Africa
6.3.4 Others
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