Contract Packaging and Fulfillment Service Market Size (2024 - 2029)

The contract packaging and fulfillment service market is experiencing significant expansion, driven by increased demand from the food, beverage, and pharmaceutical sectors, as well as the global growth of e-commerce. This market's size is influenced by manufacturing firms' shift towards contract packagers for cost optimization and compliance with stringent labeling and packaging regulations. In developed regions like Europe and North America, the need for enhanced quality and shorter delivery times is transforming contract packaging providers into strategic partners. The COVID-19 pandemic has further accelerated market growth as more consumers turn to online shopping, prompting companies to outsource packaging services to meet rising demands.

Market Size of Contract Packaging and Fulfillment Service Industry

Contract Packaging and Fulfillment Service Market
Study Period 2019 - 2029
Market Size (2024) USD 98.31 Billion
Market Size (2029) USD 168.91 Billion
CAGR (2024 - 2029) 11.43 %
Fastest Growing Market Asia Pacific
Largest Market North America

Major Players

Contract Packaging and Fulfillment Service Market Major Players

*Disclaimer: Major Players sorted in no particular order

Contract Packaging and Fulfillment Service Market Analysis

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.

  • 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 Industry Segmentation

Contract packaging is basically the process of assembling products or goods into their final finished packaging. A fulfillment service is a third-party warehouse that helps other companies in preparing and shipping their orders. The market studied is an aggregation of services provided right from design, packaging & filling, till testing and fulfillment. The study tracks the service revenue accrued by the key contract packaging and fulfillment service vendors as part of their overall offering (both standalone and end-to-end). The study also covers the impact of the COVID-19 pandemic on the market.

Service Type
Packaging Design & Prototyping
Contract Packing (Bottling/Filling, Packaging, Labeling, Wrapping, etc.)
Package Testing
Warehousing and Fulfilment
Other Service Types
End-user Type
Food
Beverage
Pharmaceutical
Household & Personal Care
Other End-user Segments
Geography
North America
Europe
Asia Pacific
Latin America
Middle East & Africa
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Contract Packaging and Fulfillment Service Market Size Summary

The Contract Packaging and Fulfillment Service Market is experiencing robust growth, driven by increased demand from the food, beverage, and pharmaceutical sectors, which was further accelerated by the COVID-19 pandemic. The global expansion of e-commerce has also significantly contributed to the market's expansion. Companies are increasingly outsourcing packaging and fulfillment services to optimize costs and focus on core competencies, with many experts noting substantial savings in operational expenses. The market is further bolstered by stringent government regulations on packaging and labeling, particularly in developed regions like Europe and North America, where companies are seeking to enhance quality and efficiency. This shift has transformed contract packaging providers into strategic partners, capable of offering innovative solutions and faster delivery times.

The market is characterized by a diverse range of services, including primary, secondary, and tertiary packaging, with primary packaging holding a significant share due to its critical role in product protection and preservation. The rise of e-commerce, especially cross-border sales, has led to increased demand for fulfillment and warehousing services, particularly in Asia. Major players in the market are expanding their operations and investing in new facilities to meet the growing demand. The competitive landscape is moderately concentrated, with key players adopting expansion strategies to maintain their market position. Recent developments, such as solar installations and acquisitions, highlight the industry's focus on sustainability and regulatory compliance.

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Contract Packaging and Fulfillment Service Market Size - Table of Contents

  1. 1. MARKET DYNAMICS

    1. 1.1 Market Drivers

      1. 1.1.1 Companies Looking to Gain Competitive Advantage by Outsourcing Non-core Operations

      2. 1.1.2 Steady Demand from Key Verticals, such as the Food and Beverage Sector

      3. 1.1.3 Entry of Key Warehousing Vendors in the Field of Contract Packaging Expected to Drive Innovation

    2. 1.2 Market Restraints

      1. 1.2.1 Stringent Government Regulations

      2. 1.2.2 Competition from In-house Packaging

    3. 1.3 Industry Regulations and Standards

    4. 1.4 Evolution of Contract Packaging

  2. 2. MARKET SEGMENTATION

    1. 2.1 Service Type

      1. 2.1.1 Packaging Design & Prototyping

      2. 2.1.2 Contract Packing (Bottling/Filling, Packaging, Labeling, Wrapping, etc.)

      3. 2.1.3 Package Testing

      4. 2.1.4 Warehousing and Fulfilment

      5. 2.1.5 Other Service Types

    2. 2.2 End-user Type

      1. 2.2.1 Food

      2. 2.2.2 Beverage

      3. 2.2.3 Pharmaceutical

      4. 2.2.4 Household & Personal Care

      5. 2.2.5 Other End-user Segments

    3. 2.3 Geography

      1. 2.3.1 North America

      2. 2.3.2 Europe

      3. 2.3.3 Asia Pacific

      4. 2.3.4 Latin America

      5. 2.3.5 Middle East & Africa

Contract Packaging and Fulfillment Service Market Size FAQs

The Contract Packaging and Fulfillment Service Market size is expected to reach USD 98.31 billion in 2024 and grow at a CAGR of 11.43% to reach USD 168.91 billion by 2029.

In 2024, the Contract Packaging and Fulfillment Service Market size is expected to reach USD 98.31 billion.

Contract Packaging Fulfillment Service Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)