The co-packing market has become increasingly important in recent years and offers packaging companies an exciting opportunity to tap into new growth opportunities in a dynamic business environment. The market is not only fast-growing, but also difficult to navigate. Professional orientation in this area is therefore crucial.
Challenges in the packaging industry
The European packaging industry is facing major challenges: stagnating growth, rising operating costs, volatility and increasing regulatory requirements are putting companies under considerable pressure. At the same time, the market is demanding more and more flexibility and adaptability. In such an environment, it is essential to identify new opportunities and further develop your own business model.
Co-packing: a growth market
In contrast to stagnating markets, the co-packing sector is showing impressive growth. At B+P Consultants, we observe that the market for co-packing is expected to double by the end of this decade. For many packaging companies, this market offers an opportunity to expand beyond their traditional business and tap into new revenue streams. You can:
- enter a neighbouring industry,
- contribute existing expertise and assets,
- offer new services and
- diversify your sources of income.
Particularly companies that are facing slow growth in their core markets in Europe should carefully examine the potential of the co-packing market.
But why is the market growing so rapidly? To answer this question, we have summarised the five most important trends in the co-packing market for you.
Trend #1: Need for flexibility and adaptability
- The growing number of SKUs (Stock Keeping Units), ever shorter product life cycles, increasing product diversity and faster market launches are forcing brand owners to be more flexible and agile in their increasingly diverse packaging requirements. Co-packers are proving to be an efficient solution.
- The increasing number of SKUs reflects the growing complexity that brands are facing to cater to heterogeneous and diversifying consumer preferences. This complexity increases the importance of co-packing services as they enable the efficient management of multiple SKUs.
- Co-packers who can adapt quickly to changing product requirements are well positioned to benefit from this increasing demand.
Trend #2: Focusing on core competences by outsourcing non-core functions
- The drive for cost efficiency and a focus on core competences is prompting more and more product manufacturers and brand owners to outsource non-core functions such as packaging to specialised co-packers.
- In a highly competitive environment, operational efficiency is crucial and outsourcing allows product manufacturers to improve their operations and focus even more on their core business activities. This allows processes to be streamlined and costs to be optimised.
Trend #3: New market players are driving demand for specialised services
- The emergence of new market players, especially start-ups, is driving demand for co-packing services with their new products.
- Especially in the food and beverage sector, start-ups often do not have the necessary resources to manage packaging internally. Co-packers offer these newcomers essential packaging services that enable them to scale.
- This also represents an opportunity for packaging companies to enter into long-term partnerships with up-and-coming brands that are geared towards growth.
Trend #4: Responding to regulatory requirements through innovation
- Increasing regulatory requirements are accelerating the introduction of new technologies by manufacturers. New directives and regulations such as the Packaging and Packaging Waste Regulation (PPWR) or the Single Use Plastic Directive (SUPD) are forcing brand owners to look for innovative solutions.
- Co-packers are well-positioned to meet these challenges by offering advanced packaging technologies and compliance solutions. This enables product manufacturers and brands to stay at the forefront of regulatory compliance and sustainability within the important and high-profile area of packaging.
Trend #5: Building resilience in an uncertain world
- Recent (and current) global supply chain disruptions emphasise the importance of reliability and resilience in business processes. Co-packers, who also have expertise in logistics, are therefore increasingly becoming indispensable partners for brand owners. They help to ensure continuity and efficiency in packaging processes, even in the face of major challenges in the supply chain.
- Reducing the number of links in the supply chain is an important factor for brand owners, and co-packers are well positioned to meet this need.
Conclusion: Tapping into new growth potential
The co-packing market is a dynamic growth market that offers exciting opportunities for companies in the packaging industry. It is not so much a question of whether you should enter this market, but rather how to plan the right strategic steps to capitalise on these trends. The market is complex and requires in-depth market analysis and professional orientation.
We would be happy to discuss with you how we can help you realise the full potential of the co-packing market. Get in touch with us.
