United States Contract Packaging Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

United States Contract Packaging Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

United States contract packaging market is expected to register a CAGR of 9.79% over the forecast period, 2021-2026. Growth in United States contract packaging market is mainly determined by the changing preference of manufacturing firms toward contract packagers, as they are increasingly focusing on cost optimization, to focus more on their core business. The operational costs can be reduced by 7% to 9% through such strategy, due to the reduced maintenance costs of machines and labor costs.

• Owing to the stability, rising demand, and changing the preference of manufacturing firms toward contract packagers, United States contract packaging market is expected to witness steady growth.
• The companies are also becoming aware of the intense global competition, cost pressures, and highly variable demand from OEMs. This environment is rapidly boosting the contract packaging market in United States. Many European companies, like the Langen Group and Persson Innovation, are investing in United States segment.
• The contract packaging sector in United States is rapidly growing due to the increasing demand for packaging in segments, like food and beverages, pharmaceuticals, beauty care, and other segments. Contract packaging companies in United States have learned to adapt to challenging business conditions.
• Also, the US government has placed various laws and regulations on the labeling and packaging of the drugs. This could lead to an increase in the demand for contract packaging, owing to the inability of an in-house packaging facility for few pharmaceutical companies in this region.
• Coronavirus outbreak is expected to have a positive impact on the contract packaging industry in United States over the coming year. The demand for packaging, which limits the risk of contamination by reducing the exposure, is expected to be favored. Also, the packaged products can be easily cleaned with the packaging on in case of any surface contact. ​
• However, the industry is currently facing a considerable impact on its supply chain system and production facilities due to the unfavorable conditions. Stringent isolation rules across the world have resulted in short supply of raw materials and workforce.

• United States has emerged as the largest market for drugs and accounts for almost half of the R&D spending in pharmaceutical and biotechnology markets. Hence, contract packaging organizations play a critical role in this market and have invested in new facilities and technologies to cater to a wide range of outsourcers.
• The escalating adoption of innovative packaging methods to satisfy rapidly changing consumer preferences and rising environmental concerns have stimulated the demand for contract packaging in the pharmaceutical industry in the region. In addition, the increasing penetration of automation in pharmaceutical contract packaging has minimized risks of human handling errors, thereby catalyzing market growth in the region.
• United States also dominates the pharmaceutical market, both in consumption and development. According to STAT, prescription drug spending in the nation is considered to add up to USD 600 billion by 2023, up from an estimated USD 500 billion in 2019, which is further expected to drive United States contract packaging market.
• As of 2019, there are more than 800 active Investigational New Drug (IND) waiting for approval with the FDA. These burgeoning approvals and drug-developing pipelines are expected to promise more opportunities to this market in the future. Nevertheless, many of the drugs approved had an orphan designation, which suggests that they are targeted for people with rare diseases.

• United States is one of the strongest packaging markets worldwide and consists of many key players in the food and beverage industry. As the economy is continuously growing in the country, increasing consumer spending on food and beverages is driving the demand for United States contract packaging market. In 2018, the food industry accounted for around 5% of the US GDP and is still growing, owing to the higher demand for packaged food.
• In United States, packaged food is gaining high traction, owing to busy work schedules, rising number of working women, and shift toward on-the-go consumption, which is, in turn, expected to ascend the utilization of innovative and sustainable packaging across the food sector. This is likely to fuel the market's growth over the forecast period.
• For Food and Beverage products, for the same brand name, the sales are highly dependent on the impact created by packaging on the customer during the point of purchase. Thus, contract packagers work along with the product manufacturing companies and are regarded as an extension of their arm.
• Apart from this, high disposable incomes, coupled with rising consumer health awareness, are propelling the demand for food and beverage contract packaging in United States.

United States contract packaging market is highly fragmented, with the presence of many small and large vendors. Some of the key players include Aaron Thomas Company​, Multipack Solutions​, Pharma Tech Industries, Reed-Lane Inc., and Sharp Packaging Services. Companies are increasing their market presence by expanding their business footprint across various end-user markets. Some of the key developments in the market are:

• October 2019 - UNICEP Packaging expanded its services to include refined custom design and quick turn prototype capabilities. These services will be available with Unicep’s single-use modified blow-fill-Seal product line. This new adaptation allows for a custom design with less cost and wait time for traditional processes.

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