Latin America Contract Packaging Market Size (2024 - 2029)

Latin America Contract Packaging Market Analysis

The Latin America contract packaging market is expected to register a CAGR of 8.2% over the forecast period.

• The e-commerce market grew rapidly owing to the restrictions and social distancing rules during the pandemic. It created significant demand, resulting in many businesses outsourcing their end-to-end packaging solutions to meet the sudden increase in demand.
• The increasing focus of companies on adopting the latest and innovative packaging solutions and focus on their core business is also anticipated to foster market growth helping the companies to minimize the investment required to set up packaging infrastructure with the latest technology deployment and the continuous need to upgrade it.
• The need for specialized production has increased as drugs and medications become more specialized. Further, in most of the packaging requirements where the regulations are stringent, the end-users like to engage with packaging vendors who have prior experience, expertise and equipped for handling the volume requirement of the clients. The region has witnessed a rise in demand for contract packaging owing to the inability of in-house packaging facilities to meet high standards needed for pharmaceutical packaging.
• The growing pharmaceutical industry in the region is another factor driving the market. Pharmaceutical companies outsource packaging activities to third parties in emerging countries such as Brazil, Mexico, etc. Further, rising pricing pressure on pharmaceutical companies is boosting the industry's demand for contract packaging services. However, the increasing adoption of in-house packaging facilities by the end-user industries is hampering the market growth.
• Due to the COVID-19 pandemic, there was increased demand for food, beverages, and pharmaceutical drugs, which led companies to outsource their packaging activities to co-packers, thus, increasing the demand for contract packaging in the region. For instance, Mexico City's primary wholesale market continuously detected several coronavirus cases daily, creating the need for hygienic and safe packaging services. Further, the Russia-Ukraine war has an impact on the overall packaging ecosystem with the increased raw materials and energy prices cost.

Latin America Contract Packaging Industry Segmentation

In a contract packaging model, an end-user business entity hires a packaging company to manage its packaging and supply chain needs. This includes inventory management, packaging finished goods, point-of-purchase display builds, and distribution to the market or the consumer. Outsourcing the packaging operation to a contract packaging vendor that specializes in supply chain management allows the business to focus on its core capabilities. Contract packaging companies must have the ability and expertise to manage all aspects of the supply chain needs fully. Outsourcing the packaging line allows a company to save money by negating the need to purchase lots of expensive packaging machinery and materials and investing it into core business segments.
The study tracks the market based on packaging service type across Latin America. The scope of the study excludes the design, testing, fulfillment, and other segments that are outsourced under the contract packaging segment. The study also covers the impact of the COVID-19 pandemic on the market.

The Latin America contract packaging market is segmented by service (primary packaging, secondary packaging, tertiary packaging), end-user vertical (beverages, food, pharmaceuticals, household and personal care), and geography.

The market sizes and forecasts are provided in terms of value (USD billion) for all the above segments.