Market Trends of Middle East and Africa Contract Packaging Industry
This section covers the major market trends shaping the MEA Contract Packaging Market according to our research experts:
Increase in Demand in E-Commerce will Significantly Drive the Market
- E-commerce packaging companies are significant adopters and drivers of modern technology. The increasing number of e-commerce companies across the globe is also fueling the demand for packaging solutions by the industry to cater to the needs of customers in a better way.
- Additionally, with high variability requirements from Consumer packaged goods (CPGs) providers, customization along with speed in the supply chain creates a challenge for product offering companies via e-commerce, thus escalating the requirements from contract packaging companies for a customized e-commerce packaging solution, as they are built for flexibility, agility, and resourcefulness.
- Contract packers and fulfillment service providers operate on a smaller scale with limited volumes and fewer people involved in decision-making. As a result, they can implement e-commerce-ready packaging innovations more quickly. Furthermore, collaborating with e-commerce companies can shorten the path to optimized packaging for this rapidly growing channel.
- The contract packaging services market in the region will to grow due to the growth of the e-commerce and food and beverage industries. According to Visa Middle East, the United Arab Emirates is considered the most advanced e-commerce market in MENA, with a penetration rate of 4.2%. E-commerce sales in the United Arab Emirates are estimated to reach USd 27.08 billion in 2021 from USD 12.34 billion in 2018 . This increases the need for corrugated contract packaging services in the country and the rest of the world.
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Beverage Industry to Witness Significant Growth
- The increasing demand for essential infrastructure to process, beverage, and juice manufacturers started focusing more on core activities. Manufacturers are looking forward to packaging vendors with a dedicated area to store the raw material by providing the right technical expertise and timely and cost-effective solutions while keeping in mind hygienic processing standards, which has given rise to the demand for contract beverage packaging services in the region.
- Many new-age beverages have widespread distribution but limited volume, necessitating multiple manufacturing locations for volumes far too small to justify plant involvement. Due to the high demand for hot-fill products, large corporations with well-known brands have turned to contract packers to meet their production requirements.
- Contract manufacturers also provide bundling services such as bottling and filling, pallet displays, promotional packaging, product displays, custom assembly, manual packaging, etc., for cans, bottles, jars, cartons, and others. The food, beverage, and pharmaceutical industries are some 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 region.
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