Australia Contract Packaging Market Size

Australia Contract Packaging Market Analysis

The Australia Contract Packaging Market size is estimated at USD 396.45 million in 2024, and is expected to reach USD 631.56 million by 2029, growing at a CAGR of 9.76% during the forecast period (2024-2029).

• In recent years, contract packaging services in Australia have witnessed significant growth, owing to the changing preference of manufacturing firms toward contract packagers, as they increasingly focus 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.
• Supply chains, notably in the end-user industries, faced significant disruption and difficulty during COVID-19 when governments closed their borders or imposed trade restrictions. On the other hand, sales through online retail channels significantly contributed to market penetration. The increased demand from the food and beverage and pharmaceutical industries was further fueled by the pandemic. The growth of the e-commerce industry in Australia is expected to be one of the major factors driving the Australian contract packaging market.
• Packaging regulations are evolving rapidly, especially for food and beverage products. Meeting such stringent rules and norms requires several inspection and quality check operations. By outsourcing packaging activities, the hectic task of meeting such regulations (also known as mil-spec packaging) is passed on to the contract packaging agency, motivating more manufacturers to prefer contract packages over in-house packaging activities. According to the article published by the Food Packaging Forum in Australia in August 2023, Australian environment ministers have agreed to reduce the use of toxic chemicals in food packaging, develop packaging design guidelines and objectives, and harmonize curbside recycling schemes. Several new packaging guidelines across the country are likely to strengthen the demand for contract packaging across the country.
• However, contract packaging can be time-consuming, as products are transported several times between manufacturers and packagers, thus increasing the potential for damage. In the case of a liquid product, the percentage would be higher since damage to one bottle can destroy multiple cases. The Australian contract packaging market is witnessing stringent demand from in-house packaging manufacturers.
• The growth of the e-commerce sector in Australia is also emerging as one of the major factors driving the market’s growth. This trend also motivates contract packaging and logistic companies to utilize the packing opportunity to gain control over the value chain.