Australia Contract Packaging Market Size, Share, Growth, Analysis & Trends (2025 - 2030)

Australia Contract Packaging Market Analysis

The Australia Contract Packaging Market size is worth USD 435.14 Million in 2025, growing at an 9.76% CAGR and is forecast to hit USD 693.19 Million by 2030.

The Australian contract packaging industry is experiencing a significant transformation driven by evolving consumer preferences and sustainability initiatives. According to recent research by Veolia, 80% of Australian consumers now consider packaging composition in their purchasing decisions, with 62% willing to pay premium prices for environmentally responsible packaging solutions. The Australian Packaging Covenant Organization (APCO) reported a 15% increase in the use of recyclable and eco-friendly materials in food packaging between 2020 and 2022, reflecting the industry's rapid shift toward sustainable practices. This transformation has prompted contract packaging providers to invest in eco-friendly materials and processes, while also developing innovative solutions for waste reduction and circular economy initiatives.

The retail sector's robust growth has significantly influenced the contract manufacturing and packaging landscape, with supermarket and grocery store revenue reaching USD 92.70 billion in 2023. The retail trade industry demonstrated remarkable financial performance, with gross operating profits reaching AUD 8.18 billion in the quarter ending June 2023, compared to AUD 5.18 billion in June 2019. This growth has led to increased demand for sophisticated packaging solutions, particularly in the food and beverage sector, where health and wellness trends are driving the need for specialized packaging capabilities for fresh and processed foods.

Technological advancement in the contract packaging sector has become increasingly prominent, with companies investing in automation and digital solutions. In January 2023, Nulogy's implementation of cloud-based software at CEVA Logistics' Melbourne facility exemplifies this trend, enabling enhanced visibility and real-time production monitoring for automotive spare parts packaging. The integration of digital technologies has become crucial for improving operational efficiency, ensuring quality control, and meeting the evolving demands of modern supply chains.

Industry consolidation and strategic partnerships have emerged as key trends shaping the market landscape. Notable examples include PakTech's establishment of a contract manufacturing and packaging facility in Victoria in 2023, through a strategic partnership with Visy, aimed at meeting the rising demand for sustainable packaging practices. In September 2023, Melbourne co-packer Alepat Taylor's USD 25 million investment in expanding its beverage packaging plant, including the installation of a new KHS Innofill Compact C filling system, demonstrates the industry's commitment to expanding capabilities and meeting growing market demands.

Australia Contract Packaging Market Trends

FMCG Domain Remains a Key Driver for the Growth of Co-Packing Services

The Fast-Moving Consumer Goods (FMCG) sector continues to be a primary growth catalyst for packaging services in Australia, driven by seasonal fluctuations in demand and the need for scalable packaging solutions. The sector's dynamic nature requires flexible packaging operations that can readily adapt to varying demand levels during festivals and promotional periods, making third-party packaging services an ideal solution for businesses seeking to optimize their operations without substantial infrastructure investments.

The retail trade industry's robust performance, particularly in the supermarket and grocery store segment, has created significant opportunities for packaging services. With annual retail revenue showing consistent growth and reaching record levels in 2023, FMCG companies are increasingly turning to outsourced packaging services to manage their packaging needs more efficiently. This trend is further reinforced by the sector's heavy reliance on effective supply chain operations, where contract packaging providers offer specialized services that enhance productivity and enable companies to adapt to changing market conditions while maintaining cost efficiency.

Growing Emphasis on Outsourcing Non-Core Operations by Product Manufacturers in Australia to Drive Demand

Australian manufacturers are increasingly recognizing the strategic value of outsourcing their packaging operations to specialized service providers, enabling them to focus on their core competencies such as product development and marketing. This shift is driven by the potential for cost optimization, with industry experts estimating that contract packaging services can reduce operational costs by 7-10% through decreased machinery maintenance and labor expenses. The trend is particularly evident in the retail sector, where annual retail turnover has shown significant growth, reaching AUD 411.51 billion in 2022, up from AUD 369.39 billion in 2021.

The outsourcing trend is further strengthened by the growing complexity of packaging requirements and regulatory compliance needs. Contract packaging providers offer expertise in managing various aspects of packaging, from design and fulfillment to logistics, helping organizations improve profit margins and achieve better supply chain visibility. The adoption of cutting-edge technologies such as RFID tracking and automation by contract packagers has enhanced their appeal to manufacturers seeking improved efficiency and accuracy in their packaging operations. This technological integration enables quicker, higher-quality service delivery and better responsiveness to customer demands, making outsourcing an increasingly attractive option for Australian manufacturers.

Segment Analysis: By Type

Primary Segment in Australia Contract Packaging Market

The primary packaging segment maintains its dominant position in the Australian contract packaging market, commanding approximately 49% market share in 2024. Primary packaging involves direct contact with the product or serves as the first packaging layer, enabling protection and preservation from external contamination, damage, and spoiling. This segment's leadership is primarily driven by the growing demand from industries such as food and beverage, pharmaceutical, and personal care sectors. The segment's prominence is further reinforced by the increasing adoption of single-serve and reusable packaging solutions like pouches, particularly in the snacking industry and the rising demand for ready-to-drink beverages and dairy products. Primary contract packaging provides critical capabilities that may be inaccessible to manufacturers, especially for projects requiring short runs or frequent changeovers, such as new or niche products or seasonal demand, that typically fall outside primary manufacturing economies.

Secondary Segment in Australia Contract Packaging Market

The secondary packaging segment is experiencing the most rapid growth in the Australian contract packaging market, with a projected growth rate of approximately 11% during the forecast period 2024-2029. This remarkable growth is driven by the increasing demand for electronic and pharmaceutical products, which require additional protection from damage during transportation and storage. The segment's expansion is further supported by recent developments such as PakTech's launch of a contract manufacturing facility in Victoria and its commitment to manufacturing 100% recycled and sustainable packaging. The growth trajectory is also bolstered by the rising export value of medical and pharmaceutical products, which has created additional demand for secondary packaging solutions. The segment's evolution is characterized by innovative approaches to sustainability, with companies increasingly focusing on eco-friendly materials and recyclable packaging options to meet both regulatory requirements and consumer preferences.

Remaining Segments in Contract Packaging Market by Type

The tertiary packaging segment plays a vital role in the Australian contract packaging market, focusing on the highest level of packaging used to protect manufactured goods during shipping or storage. This segment serves a crucial function in safeguarding not only the product but also the secondary and primary packaging layers. The segment's significance is particularly evident in the pharmaceutical and industrial sectors, where proper handling and transportation of bulk quantities are essential. Tertiary packaging solutions, including large cardboard boxes, pallets, and stretch wraps, continue to evolve with technological advancements and increasing focus on supply chain efficiency. The segment's development is also influenced by the growing emphasis on sustainable practices and the need for more efficient logistics solutions in the Australian market.

Segment Analysis: By End-User Type

Food Segment in Australia Contract Packaging Market

The food contract packaging segment maintains its dominant position in the Australian contract packaging market, commanding approximately 42% market share in 2024. This leadership position is driven by the increasing demand for sustainable and eco-friendly packaging solutions in the food industry, with a significant focus on recyclable and compostable materials. The segment's growth is further supported by the rising consumer awareness of environmental impact, with recent studies showing that 80% of Australian consumers consider packaging composition in their purchasing decisions. Additionally, the expansion of food contract packaging capabilities across the country, particularly in urban centers like Sydney, Melbourne, and Perth, has strengthened this segment's market position, with companies offering specialized services for various food categories including snacks, ready-to-eat meals, and premium food products.

Pharmaceutical Segment in Australia Contract Packaging Market

The pharmaceutical contract packaging segment is emerging as the fastest-growing sector in the Australian contract packaging market, with a projected growth rate of approximately 12% from 2024 to 2029. This remarkable growth is primarily driven by Australia's expanding pharmaceutical manufacturing sector, which includes more than 500 MedTech and 400 locally-owned biotechnology companies. The segment's growth is further accelerated by significant government initiatives supporting pharmaceutical manufacturing, including substantial tax incentives and research funding. The increasing demand for specialized packaging solutions for various pharmaceutical products, from traditional medications to advanced therapeutic products, continues to drive innovation in this segment. Contract packaging providers are investing in advanced technologies and automated solutions to meet the stringent quality and compliance requirements of pharmaceutical contract packaging.

Remaining Segments in End-User Type

The beverage contract packaging, home care and personal care, and other end-user segments collectively represent significant opportunities in the Australian contract packaging market. The beverage segment is experiencing substantial growth driven by the increasing demand for sustainable packaging solutions and innovative packaging formats. The home care and personal care segment is witnessing evolution through customized packaging solutions and eco-friendly materials, particularly in response to changing consumer preferences for natural and organic products. The other end-user segment, which includes automotive, industrial, chemical, textile, and furniture industries, continues to contribute to market diversity through specialized packaging requirements and innovative solutions for various industrial applications.

Segment Analysis: By Service Type

Bagging Services Segment in Australia Contract Packaging Market

Bagging services have emerged as a dominant segment in Australia's contract packaging market, driven by widespread adoption across multiple industries including e-commerce, injection molding, medical, food, aerospace, apparel, and electronics sectors. The segment's prominence is attributed to its versatility in handling various product types and its ability to meet diverse packaging requirements ranging from direct packaging bags used in FMCG to secondary packaging applications in pharmaceuticals and cosmetics. The growing retail food sector has particularly bolstered demand for bagging services, with supermarkets and grocery stores experiencing significant revenue growth. The segment's strength is further reinforced by the increasing adoption of digital printing capabilities on bags, which creates opportunities for brand recognition, visual appeal, sorting, and shipping warnings, making it an essential service for both industrial applications and end-user products.

Liquid Filling Services Segment in Australia Contract Packaging Market

The contract filling services segment is experiencing rapid growth in the Australian contract packaging market, driven by expanding demands from pharmaceutical and cosmetic industries. This service category has shown remarkable expansion potential due to its diverse applications in filling beverages, pharmaceuticals, cleaning fluids, cosmetics, toiletries, and wineries. The segment's growth is particularly accelerated by the pharmaceutical industry's increasing requirements for vial and ampoule filling, alongside the cosmetic industry's demands for filling various products including syrups, lotions, aerosols, fragrances, bath oils, hand washes, shampoos, conditioners, liquid soaps, shower gels, nail polishes, and mascara. The segment's expansion is further supported by investments in both flexible and rigid packaging capabilities, catering to primary, secondary, and tertiary packaging needs across different industries.

Remaining Segments in Contract Packaging Service Types

The contract packaging market in Australia encompasses several other significant service segments including contract labeling, boxing, repacking/assembling, and finishing services. Labeling services play a crucial role in providing product information, branding, and regulatory compliance, with a growing emphasis on sustainable and digital labeling solutions. Boxing services have gained prominence with the rise of e-commerce, offering various options for retail, cosmetic, gift, and industrial packaging needs. Repacking and assembling services provide valuable solutions for damaged packaging rectification and product reorganization, while finishing services complete the packaging process with specialized treatments and quality controls. These segments collectively contribute to the comprehensive service offerings in the contract packaging industry, meeting diverse client requirements across various sectors.

Segment Analysis: By Material

Flexible Packaging Segment in Australia Contract Packaging Market

Flexible packaging has emerged as the dominant segment in the Australian contract packaging market, driven by its versatility and cost-effectiveness across multiple industries. The segment encompasses various materials including plastic films, papers, foil, and other materials used for wrappings, sacks, and sealed or unsealed bags. The food and beverage industry represents the largest user base for flexible packaging services in Australia, particularly due to changing consumer lifestyles and preferences for convenient packaging formats. The segment's growth is further bolstered by innovations in production processes that have reduced water and energy consumption, greenhouse gas emissions, and volatile organic compounds. Additionally, the lighter weight of flexible packaging contributes to reduced transportation-related energy consumption and environmental pollution, making it particularly attractive for e-commerce applications and sustainable packaging initiatives.

Rigid Packaging Segment in Australia Contract Packaging Market

The rigid packaging segment is experiencing significant transformation in the Australian contract packaging market, particularly in the pharmaceutical and beauty sectors. This growth is driven by continuous development of innovative pharmaceutical products like self-administered drug delivery devices, which require specialized rigid packaging solutions including pre-filled syringes and unit dose vials. The segment is also witnessing increased adoption of RFID technologies and QR-enabled packaging, enhancing supply chain visibility and product authentication. The pharmaceutical packaging companies within this segment are benefiting from the perception that packaging is an integral part of the drug delivery system, especially given rising safety and counterfeit concerns. Furthermore, the beauty and personal care sector's increasing demand for sustainable rigid packaging solutions, including recyclable, biodegradable, and compostable materials like glass and aluminum, is contributing to the segment's growth trajectory.

Remaining Segments in Material Segmentation

Metal packaging continues to play a crucial role in the Australian contract packaging market, particularly in the food and beverage sector. This segment is characterized by its high recyclability and durability, with tin-plate steel, beverage aluminum, and mid steel being the primary components. The segment benefits from established recycling infrastructure and strong consumer acceptance. Metal packaging's ability to provide superior product protection and extended shelf life makes it particularly valuable for certain applications where product integrity is paramount. The segment is also seeing innovations in lightweight solutions and enhanced coating technologies, addressing both sustainability concerns and performance requirements.