Packaging and Labeling Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,500 contract packaging establishments in the US generate revenue by charging fees (or a "toll") for packaging customer products in finished form. Turnkey packaging refers to projects in which the contract packager purchases inventory for the customer and takes responsibility for final packaging services. Firms may also generate revenue through telemarketing services or the resale of merchandise.
Unpredictable Work Flow From Customers
Demand for contract packaging firms can be extremely unpredictable.
Capital-Intensive Operations
Packaging operations require significant investments in plants, equipment and machinery.
Industry size & Structure
The average packaging contractor operates out of a single location, employs fewer than 20 workers, and generates $6-7 million annually.
- The packaging and labeling services industry consists of about 1,500 firms that employ 69,700 workers and generate $10 billion annually.
- Firms that generate less than $10 million annually account for 88% of industry participants but only 25% of revenue.
- Firms that generate between $10 million and $25 million annually account for 7% of participants and about 19% of revenue.
- Firms that generate more than $25 million annually account for 5% of participants and about 56% of revenue.
- Some large contract manufacturers, such as Aphena Pharma Solutions and Hearthside Food Solutions, have integrated contract packaging operations.
Industry Forecast
Packaging and Labeling Services Industry Growth
Recent Developments
Mar 21, 2024 - Pace of Industry Growth to Slow
- The packaging and labeling services industry is expected to experience slower sales growth in 2024 after a softening of demand in 2023 and some solid gains in the years following the onset of the pandemic. The industry’s year-over-year sales fell to -12 in 2020 before rising to 15.4% in 2021 and 7.9% in 2022, according to Inforum and the Interindustry Economic Research Fund, Inc. In 2023, sales growth fell to 6.1% and is expected to fall further to 2.9% in 2024 before rising an average of 3.8% per year between 2025 and 2027, according to Inforum and the Interindustry Economic Research Fund, Inc.
- In 2024, the global thermal printing market has an estimated value of $35.8 billion, and the industry is expected to experience an average annual growth rate of 4.3%, reaching sales of $44.2 billion in 2029, according to a recent report by market research firm Smithers. Thermal printing uses heat to print human- and machine-readable images on plastic films and papers. Primary applications include labels, tickets, tags, receipts, records, and others that require just-in-time printing of lot numbers, transaction data, or other crucial information.
- Some end users of packaging machinery are pausing orders for new equipment amid high interest rates and growing economic uncertainty, according to a recent State of the Industry Report by PMMI (The Association for Packaging and Processing Technologies). The report estimates packaging machinery shipments grew 3.4% in 2023, down from the 12.4% growth in 2022. However, the longer-term outlook is brighter. Demand for packaging machinery between 2022 and 2027 is forecast to experience average annual growth of 6.7%, led by pharmaceuticals (7.8% annual growth); food (7.3%); household, industrial, and agricultural chemicals (6.1%); personal care, toiletries, and cosmetics (6%), and beverages (5%).
- The global value of the print and printed packaging market is expected to rise from $889.4 billion to $1.16 trillion by 2028, according to a recent report by market research firm Smithers. Over the forecast period, inkjet printing is expected to post the strongest gains with a compound annual growth rate (CAGR) of 9.7%. Print volume is expected to increase from 44.1 trillion A4 size (the metric version of 8.5”x11” paper) prints to 44.7 trillion by 2028.
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