Market Trends of Europe Contract Packaging Industry
Pharmaceutical Industry to Propel Market Growth
- In Europe, increased pharmaceutical spending on research and development (R&D) is driving significant growth in new medicine development. This surge is increasingly relying on support from contract packagers across various European nations. According to data from the European Federation of Pharmaceutical Industries and Associations (EFPIA) and the Pharmaceutical Research and Manufacturers of America (PhRMA), from 2014 to 2018, pharmaceutical R&D in Europe grew at a rate of 3.7%. However, between 2019 and 2023, this annual growth rate surged to 6.7%.
- Pharmaceutical industries in the region are accelerating their adoption of technological advancements. Increasing awareness of smart packaging, which monitors storage and temperature conditions, is driving innovation in contract packaging services. Additionally, advancements in sensor technologies and the development of the Internet of Things (IoT) are enhancing smart packaging through cloud platforms.
- In 2023, Pharmapack Europe announced plans to launch two new zones at its 2024 event. This initiative is aimed at meeting the increasing demand for biologics, mRNA therapeutics, and contract packaging. Additionally, to help the industry find ideal partners and sustain demand growth, Pharmapack is introducing dedicated zones for exhibitors specializing in these solutions.
- Several vendors operating in the market are engaging in strategic partnerships. For instance, in January 2024, SteriPack, a contract packing organization serving the pharmaceutical industry, strategically partnered with SHL Medical, a provider of advanced drug delivery systems. This collaboration establishes a pre-validated, highly flexible final assembly and secondary packing service at SteriPack's facility in Poland. This service will support SHL's second-generation Molly 1.0 ml autoinjector platform, enhancing SteriPack's small to mid-volume offerings in Europe.
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The United Kingdom Expected to Witness Significant Growth
- The packaging industry in the United Kingdom has been experiencing significant growth due to increased manufacturing activities. Additionally, rising e-commerce sales, higher demand from food and beverage producers for eco-friendly and recyclable packaging, a growing interest in product personalization, and an expanding industrial packaging sector are driving the country's contract packaging market forward.
- According to the Office of National Statistics (United Kingdom), in November 2023, internet sales as a percentage of total retail sales in Great Britain stood at 30.7%, indicating a significant increase compared with the previous month when online retail sales accounted for 26.30% of total retail sales. The rise further boosts the demand for contract packaging in the region.
- To establish themselves as comprehensive contract solution providers, vendors of consumer-packaged goods (CPG) in the country are increasingly pursuing vertical integration. This strategy includes offering packaging solutions, acquiring raw materials, and managing logistics. Due to constraints in OEMs' manufacturing capacities and the rise in food producers, manufacturers are turning to outsourcing. This shift enables food enterprises to expand rapidly, leveraging the value-added services provided by food contract manufacturers, such as packaging, research, consulting, and warehousing.
- In the United Kingdom, pharmaceutical contract packaging is rapidly embracing diverse methods to meet shifting consumer preferences. Growing environmental concerns are prompting the pharmaceutical industry to adopt sustainable contract packaging solutions. Additionally, the increasing use of automation in pharmaceutical contract packaging is reducing human errors, thereby driving market growth in the country.
- The United Kingdom is also now committed to environmental conservation and sustainable development at the highest levels of government. Contract packaging is a good combination of efficiency and effectiveness for CPG companies aiming to avoid significant capital expenditure and instead focus on innovation, sustainable practices, customer experience, and speed-to-market. Supply chain efficiencies contribute to material and structural improvements such as cost reduction, waste reduction, and production cycle optimization. According to a report by Sustainable Plastics in September 2023, online shoppers across the United Kingdom showed a clear preference for high-quality packaging that is recyclable or reusable while also minimizing unnecessary waste.
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