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 1,600 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.
Industry size & Structure
The average packaging contractor operates out of a single location, employs fewer than 20 workers, and generates $8-9 million annually.
- The packaging and labeling services industry consists of about 1,600 firms that employ 65,000 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
Jan 27, 2025 - Shift to Paper Packaging Continues
- Amid mounting regulatory requirements and consumer demand, more brands are shifting away from plastic packaging in favor of fiber-based alternatives, according to Packaging Dive. The United Nations Environment Program estimates that nearly all single-use plastic products are made with fossil fuel feedstocks, and production, use, and disposal of single-use plastics will account for almost 20% of the global carbon budget by 2040. So far, most of the shifts toward paper packaging have been food and shipping. Several brands are working with packaging firms to develop a paper-based bottle that is durable enough to contain liquids and can be easily recycled.
- US retail sales, a demand driver for packaging and labeling services, increased 0.6% in December 2024 compared to the previous month. The jump in December retail sales was led by a 4.3% increase in miscellaneous retailer sales, followed by sporting goods, hobby, musical instrument, and bookstores (+2.6%); furniture and home furnishings stores (+2.3%); clothing and accessories stores (+1.5%); and food and beverage stores (+0.8%). The upbeat retail data followed robust government reports showing strong hiring activity and falling unemployment, according to Reuters. Some sentiment surveys suggested consumers might be stocking up ahead of potential tariffs by the Trump administration. However, other industry observers noted there was little evidence that tariff concerns had led to increased spending.
- The global market for packaging printing was valued at $512 billion in 2024 and is projected to post average annual growth of 6.3% through 2029, reaching a value of $695 billion, according to market research firm Smithers. Key demand drivers include population growth and increased urbanization. Populations migrating to cities tend to boost packaged goods consumption, especially for food and beverage products. As the ranks of the global middle class grow, higher discretionary income, particularly in Asia, is expected to boost demand for printed packaging.
- Amid higher advertising costs and struggles for shelf space, some smaller consumer product brands are differentiating themselves through unconventional packaging, according to The Wall Street Journal. Examples include sunscreen in whipped cream canisters, gin in a motor oil can, and water in tallboy aluminum beer cans instead of plastic bottles. Packaging that surprises consumers can help new brands stand out on crowded shelves and even generate free advertising if they catch fire on social media. However, unusual packaging design is primarily confined to start-up brands. Established brands are often limited by large runs on standardized production lines, and jarring shifts in packaging design can confuse or turn off existing customers.
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