Top 7 Benefits of Contract Packaging

Cosmetic Packaging Companies

In a world where the aesthetics are equally as important as a product’s functionally, packaging is now far more important than it used to be. Packaging is no longer seen as simply an extension of the manufacturing process; it has emerged as a critical component of marketing strategy. As a result, contract packaging has gained popularity, especially among small and medium scale businesses.

Contract packagers, also known as co packers, are specialists in the art of packaging. They not only provide packaging services, but also offer equipment and / or facilities related to packaging such as labour, automated machines, etc.

Usually packaging companies focus on a particular type of market or industry and excel in providing highly-customised packaging solutions for that specific industry. As of late, pharmaceuticals, consumer packaged goods (CPG), and food product manufacturers have resorted to outsourcing product packaging work to contract packagers in order to focus on the core activities of the business. This trend has caught on across the globe. Analysts at Technavio predict that the global contract packaging market will record a CAGR close to 11% by the year 2020.

7 Benefits of Contract Packaging

#1. Less investment, greater profit

Since co packers already provide staff, production facilities, equipment, and materials, businesses do not have to invest in any of these things or bear the operational and maintenance costs associated with packaging machines. The money saved can be channelled into increasing production.

Also, as most contract packaging companies are experts in packing products for a particular business vertical, businesses can be assured that their products will be in-sync with the latest packaging trends. Ultimately, not only are they saving money, but they are also able to invest in the future of the company.

#2. More flexibility

It is often the case that businesses are unable to experiment with packaging options due to a lack of infrastructure, machines and / or a creative team. By opting for contract packaging, they can easily determine different packaging options for their products with plenty of flexibility. This not only saves money, but also helps in boosting product image and company credibility.

#3. Quicker output

Another benefit to using contract packaging services is increased rate of output, especially if manufacturers include these services from the very beginning of the product development process. This allows co packers to easily roll out the packaging work as soon as the product is created, thereby reducing lead-time.

#4. Best option for short-term / seasonal packaging

Many businesses aim for seasonal packaging that is creative but also cost-effective. It doesn’t make much sense for them to use their own staff and facilities for these types of short-term requirements. That’s where co packers come in. As experienced professionals, they have the ability to understand the specific packaging requirements, and offer the most effective and budget-friendly packaging solutions for whatever the occasion.

#5. Reduces need for manpower

Once you outsource packaging services, you can easily downsize your workforce, cut costs associated with training, maintaining and upgrading machinery, as well as eliminate facility fees. This not only helps you save on your investment, but also improves the efficiency of your organization.

#6. Optimization of manufacturing process

Most contract packagers offer value-added services such as bar coding, thermoforming, contract sewing etc. This makes it possible for businesses to optimize complex, high-end manufacturing processes. Also, all attention can be directed toward advancing manufacturing techniques, thereby creating a competitive edge.

#7. Guarantees sustainability

Most organizations are working toward manufacturing products and rendering services that contribute to building a sustainable work environment. When it comes to packaging, there is a good chance that it may difficult to come up with or invest in sustainable resources. Contract packaging, on the other hand, provides sustainable and environmentally-friendly solutions without being a financial burden.

Some of the leading contract packaging companies include Deufol, GENCO, Stamar Packaging, Unicep Packaging and Summit Container.

View the 2016-2020 Global Contract Packaging Market Report