Market Trends of North America Contract Packaging Industry
This section covers the major market trends shaping the North America Contract Packaging Market according to our research experts:
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, the 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 a 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 also to 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.
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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 being used for protecting medicines and drugs against any unfavorable 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.
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