Packaging and Labeling Services

The 1,600 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.

Sep 25, 2026 - Label Market Growth Favors Digital Printing

• The global printed labels market is valued at $44.5 billion in 2026 and is projected to reach $55.1 billion by 2031, according to market research firm Smithers. Food, beverage, and healthcare applications account for more than three-quarters of label volume and value, while pressure-sensitive labels represent nearly half of global volume and more than 60% of value. Sleeves are forecast to be the fastest-growing label format through 2031, and digital printing continues to gain share. Packaging and labeling service providers may benefit from investing in digital production, short-run capabilities, variable printing, and sleeve-label capacity as customers demand greater customization, faster turnaround times, and labeling that can adapt more readily to regulatory and product changes.
• Labels & Labeling reports that vendors showcased a wide range of new printing, finishing, automation, RFID, inspection, and workflow technologies at the recent Loupe Americas 2026 trade show. Equipment suppliers demonstrated digital and hybrid presses, automated color and quality controls, laser die-cutting, variable-data printing, RFID converting, and systems designed for faster job changeovers and shorter production runs. Packaging and labeling service providers could use these technologies to increase throughput, reduce setup and tooling costs, handle more customized jobs, and expand into higher-value services such as embellishment, serialization, and RFID-enabled labels. Greater automation may also help converters manage labor constraints while improving consistency across increasingly complex label and packaging applications.
• North American containerboard prices were unchanged in August from July for a second consecutive month, according to Packaging Dive, citing Fastmarkets RISI. Producers had already announced another round of increases scheduled for September, ranging from $80 to $140 per ton, while the first two rounds recognized by Fastmarkets RISI added a net $100 per ton in 2026. Packaging and labeling service providers that purchase corrugated materials could face higher substrate costs as the latest increases work their way through the supply chain. Firms may need to adjust quotes, renegotiate customer pricing, or improve material efficiency if higher containerboard costs persist, particularly for corrugated packaging jobs with tight margins.
• A recent report by market research firm Smithers and UPM Specialty Materials projects that sustainability mandates, extended producer responsibility (EPR) fees, and recycling compatibility will increasingly shape food packaging through 2045. Based on responses from more than 230 packaging professionals, the study forecasts that fiber-based packaging's market share will rise from 37% in 2025 to 42% by 2045, while polymer-based packaging's share will fall from 53% to 33%. Plastics are expected to remain important but shift toward simpler, recyclable mono-material formats. Advances in barrier coatings should expand the use of fiber in food applications, although cost, performance, and compatibility with recycling systems remain challenges. Respondents expect recycling rates to improve, but collection, sorting, consumer participation, and infrastructure investment will limit progress. Packaging strategies must account for regional regulations, EPR exposure, and the recyclability of coatings, labels, adhesives, and other components.

Industry size & Structure

The average packaging contractor operates out of a single location, employs fewer than 40 workers, and generates $8-9 million annually.

• The packaging and labeling services industry consists of about 1,600 firms that employ 64,400 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.