Europe Contract Packaging Market Size

Europe Contract Packaging Market Analysis

The Europe Contract Packaging Market size is estimated at USD 24.90 billion in 2024, and is expected to reach USD 37.53 billion by 2029, growing at a CAGR of 8.55% during the forecast period (2024-2029).

• The packaging of any tangible product is crucial. However, there are numerous resources and upfront costs associated with product packaging. As a result, manufacturers use contract packaging companies, sometimes called third-party packaging companies, to handle the packaging of their products to address this issue. Additionally, contract packaging provides the knowledge and tools needed for packaging. Thus, it is projected that the growth in small and medium-sized enterprises worldwide and the advantages offered by contract packaging companies will fuel the market for contract packaging.
• The expansion of the e-commerce sector has also contributed to an increase in the need for tertiary packaging globally, which favors the contract packaging business. Additionally, due to increased disposable income, population growth, and business-friendly government regulations in many nations, demand for various packaging-intensive industries, including pharmaceutical, consumer goods, food & beverage, and electronics, is rising. Thus, the growth of the industries mentioned above is projected to favorably impact the contract packaging market.
• 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. Around 1,000 contract packaging vendors are active in Europe, of which 40-50% are small companies. According to the European Co-Packers Association (ECPA) data, the European contract packing market is growing significantly, with 81% of vendors having reported growth between 2016 and 2018 and 30% planning to invest in several packaging lines by 2022.
• End-user companies, like Unilever, Mars, and Kraft, also opt for the full-service concept, where contract packaging companies purchase materials and raw materials to take care of logistics and contract packaging. ECPA claimed that around 83% of the contract packaging vendors examined these regional offers. Notably, according to the Federation of E-commerce and distance selling, e-commerce sales in France were expected to reach EUR 146.9 billion (USD 159.98 billion) in 2022. This is a nearly 14% growth over the previous year, when online sales were slightly over EUR 129 billion (USD 140.48 billion).
• European businesses are outsourcing their packaging requirements to contract packaging companies to concentrate on their core operations while reducing operational expenses and expanding their market share. Vertical integration has been eagerly anticipated by consumer packaged goods (CPG) vendors to provide packaging solutions, including raw material procurement and logistics, and establish themselves as a single-source provider of contract packaging solutions.
• As a result, it is anticipated that the established packaging players' primary focus on outsourcing their operational and production activities will likely propel the market for contract packaging and open up a vast opportunity for product innovations in the sector. From the beginning, COVID-19 positively impacted the market as a whole. This is because online and e-commerce sales have increased demand for food and beverages.