The Contract Packaging Association recently reported that the contract packaging industry has doubled since 2008. Between the ongoing surge for more sustainable packaging and the increased demand for cost and process efficiencies, those within this industry must continue to strive for innovative and cost effective solutions. With that said, here are some key trends and highlights in the industry today that are driving that innovation and growth.

• Collaboration within the supply chain among the contract packagers and their manufacturer clients have spurned new packaging concepts that provide more innovative designs at improved cost margins. Within arrangements like this the contract packagers can reap the benefit of new designs while the manufacturers can reduce costs by relying less heavily on internal R&D efforts. Not only are their customers reducing costs through these efforts but they are able to reduce their risk.

• Industries that continue to see the highest volume from contract packagers are food and beverage, personal care and pharmaceutical segments are expected to see a significant increase in the coming years. • Since between 73% and 85% of purchase decisions are made at the point of sale, innovative and attractive packaging designs are critical to a brand’s ability to sell to new customers.

• The service offering of contract packagers has expanded in recent years to include more end to end processes such as early stage design capabilities through the management of the product throughout its lifestyle. This trend lends itself to more streamlined activities from their customers allowing them to focus on fewer suppliers to produce their goods. • Even with the above trend noted, some industries, such as pharmaceutical, still rely on various suppliers to fulfill their needs throughout the packaging process.

• Contract packagers that have adopted progressive technology are leading the growth within the industry; technologies include serialization concepts, advanced robotics, and digital printing.

• While serialization is at the forefront of contract packaging processes, there is a lack of clarity around the regulations surrounding this process ultimately leading packagers to question the value of implementing such services.

• Packaging consumers are not only concerned with sustainable packaging, they want to be more involved in how the products are developed and want to know where they are coming from. The functionality aspect of packaging has also become a greater concern for consumers.

• Social media and technology have led to increased transparency in products including ingredients, prices, and reviews, thus alleviating some of the need to label packages differently. Social media sites like Pinterest have led to a substantial increase in visibility into products that otherwise would not been found by the average consumer base.

Overall contract packaging will continue to grow as companies using their services reduce headcount and budgets for these services. The need to outsource this stage of the supply chain will increase in the coming years along with the industries that use the services. It will be key for the different segments of the business to partner in order to maintain innovative and cost effective solutions that meet the fluctuating demands of the consumer.
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Jennifer Ulrich

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