15.7 GW
8-9 Percent
Category Intelligence on Repacking Services England and Germany covers the following
Europe is expected to witness a growth rate of 8–9 percent between 2018 and 2022. Rising demand from end-use segments, like food & beverage, pharmaceutical & automotive is a major driver for co-packaging services in Europe.
In-House Packaging With External Labor
Hiring seasonal/temporary labors for packaging activities at the buyers' site. Though not a preferred practice, some buyers use it for lower order volume destined for shorter distance deliveries.
When is it used?
In cases of low order volume packaging, which involves delivery to few locations, external labor can be hired for packaging in-house. In cases of seasonal promotional activities for a specific region alone, this model can be used.
Pros
Cons
Fully Outsourced Model
The co-packaging activity is entirely outsourced to a contract packager. Contract packagers are nowadays forward integrated towards logistics and distribution.
When is it used?
Pros
Cons
Embedded Model
The co-packager installs packaging line at the buyers' site or the buyer leases their entire warehouse to a co-packager who manages the end-to-end function from sourcing of materials to distribution of products.
When is it used?
Pros
Cons
Partially Outsourced Model
The co-packaging activity is entirely outsourced, except sourcing of packaging materials, which the buyers provides to the contract packager.
When is it used?
Pros
Cons
Cost Structure: Co-Packaging Services
Labor constitutes a major portion of co-packaging cost. Any change in the labor market will have a direct impact on the cost of co-packaging services. The need to reduce dependency on labor is a major reason for increasing demand and investments for new automations in co-packaging.
Labor
Labor cost is one of the major drivers that impacts the average package cost, as labor costs contribute substantially to the overall cost, the average package cost might increase if the service provider does not use technology optimally to reduce labor costs.
Warehousing
Warehousing/storage costs form the second largest component of the co-packaging service costs. The share of warehousing/storage costs while engaging with a traditional co-packager might be low compared to a large integrated player/3PL, owing to relatively higher market power that the integrated players hold
Packaging materials
Packaging materials are either sourced by the co-packager or the buyer provides the packaging materials. Any fluctuations in the raw material prices of packaging materials may induce price variations in the overall packaging cost
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