Contract Packaging Market is Poised to Reflect ~7% CAGR by 2027

June 24 16:28 2021
Contract Packaging Market is Poised to Reflect ~7% CAGR by 2027

Contract Packaging Market
Globally, revenue generated by the contract packaging market is anticipated to reach ~US$ 34 Bn in 2019 and is projected to expand at a CAGR of ~ 7% in terms of value during the forecast period, increased complexity of package requirements is expected to drive market growth.

According to the latest report by Transparency Market Research, the global contract packaging market is moving towards achieving a stellar valuation. The global market is growing at an impressive CAGR of 7% for the course of the given forecast time frame of 2019 to 2027.

Mergers and Acquisitions are Imperative for Market Players

Contract packaging offers manufacturers and brands with improved results as far as the overall channel fulfillment and packaging of the brand is concerned. These contract packagers are slowly becoming the mainstay in the overall distribution channel. The companies operating in the global contract packaging market are placed quite uniquely in the overall value chain. These companies are trying to expand their business offerings in order to cater to the several demands and changing needs of the end-use customers. The leading players in the global contract packaging market are providing a wide range of services such as last minute optimization to creative packaging. To state an example, Coregistics, a contract packaging company based out in Atlanta, announced that it has taken over Cano Packaging Corporation. This takeover allowed Coregistics to have a better and improved access the POP packaging services and lay down a strong foothold.

Contract packaging services make sure of optimization of managed and integrated services. It also provides great scalability for the producers who are facing a problem of production postponement. It thus helps in saving the overall cost of the production. Naturally, with such benefits, there has been a growing demand for contract packaging across it end-use application industries. This has thus been one of the biggest driving factors for the growth of the global contract packaging market.

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Shedding off the Old Passive Role

One of the emerging trends in the global contract packaging market has been of the movement from passive role to an active strategic role in the overall value chain. The leading companies in the global contract packaging market are now actively involved in the strategic decisions regarding value chain supply such as selection of vendor or vendor qualification. These companies are also involved in decisions regarding quality assurance, product formulation, product development, and branding among others. In addition to this, the leading companies in the global contract packaging market are quickly adopting to the omni-channel distribution tactics in order to make themselves stand out in eyes of their customers from both online as well as offline channels. Furthermore, contract packaging companies are slowly shifting their focus on value-added services, product innovation, and product specialization. Such trends indicate that the global market for contract packaging is on course to achieve a stellar growth in the coming years of the forecast period.

Some of the leading names in the global contract packaging market include names such as Sonoco Products Company, Pharma Tech Industries, Multi-Pack Solutions LLC, and Stamar Packaging Inc. among others.

Acquisition-oriented Growth Strategies – Pursuit of Scope and Quest for Scale

Co-packers rely on the horizontal growth strategy to strengthen their vertical market movements. Among the other horizontal growth tactics that include partnerships and collaborations, strategic acquisitions are found to have a profound influence on the growth of market players. At a granular level, acquisition is further segmented on the basis of scope and scale, and co-packers in the contract packaging market illustrates both these strategies.

The merger of Cloud Packaging Solutions LLC and Ryt-way Industries represents a scale-oriented acquisition strategy since both companies offer contract packaging services. This acquisition resulted in a better market position for these companies. On the other hand, scope-based acquisition involves two or more companies with different purviews and application areas. While the scale-based strategy offers broad geographical exposure, a scope-oriented strategy bundles the packaging services, which widens the application areas of these companies.

Other effective strategies to compete in the contract packaging market include the integration of automated processes and investments in packaging equipment, in order to optimize uptime by avoiding frequent maintenance and breakdown costs. In addition, efforts expended towards the development of customized and new design packaging models will help achieve higher retention of the clientele base.

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