Food Contract Manufacturing Market

Global Food Contract Manufacturing Market Size (2024 to 2032)

As per our analysis report, the global Food Contract Manufacturing Market is expected to reach USD 301.23 Billion by 2032 from USD 145.74 billion in 2024, growing at a compound annual growth rate (CAGR) of 9.50% during the forecast timeline. The Asia-Pacific region is expected to grow at a faster CAGR in the food contract manufacturing market owing to an increase in population number, household income, and rapid industrialization. Dietary supplements are expected to have a significant market share owing to the vital requirement of the food contracts in the customization of dietary supplements.

MARKET DRIVERS

The growing emphasis on dietary supplements that are plant-based, gluten-free, and free from all allergic reactions is expected to drive the food contract manufacturing market growth in coming years.

Contract manufacturers are striving hard to meet these consumers' requirements. These are collaborating with the food companies to develop new formulations that cater to the prevailing health trends in the market, including the demand for organic, functional food products that have some special health benefits. The innovations in formulations and ingredients are driving the food contract manufacturing market at an expanding rate. The contract manufacturers are well knowledgeable about the local and international regulations governing food production and manufacturing. The commitment of the contract manufacturers towards the food products standards by ensuring the market safety, labelling, and requirements will drive the demand for them. 

The limited manufacturing capacity of the OEM and the new food manufacturing companies propelled the demand for food manufacturers and drove the food contract manufacturing market. The food contract manufacturers are offering value-added services like packaging, research, consulting, and warehousing facilities, which has enabled the food companies to grow at a rapid pace.

MARKET RESTRAINTS

The continuous rise in consumer expectations and change in the regulatory landscape, along with the vital role of quality assurance, is expected to restrain the value of the food contract manufacturing market. The reliance on a limited number of clients makes them more vulnerable to fluctuations in the clients’ demand. A decrease or loss in the number of orders from clients would significantly impact the revenue and financial stability of the company. The diversification of the clients is more important for a contract manufacturer business, and there is a need to avoid reliance on specific clients as they may sometimes result in loss to the company. Diversification in the client and industries is a key marketing strategy to avoid the risk associated with market fluctuations, consumer behavior change, or any unforeseen industry challenges. These factors may negatively impact the market growth in the coming years.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Food Contract Manufacturing Market Analysis By Services

The manufacturing services segment is expected to have a high share of revenue in the food contract manufacturing market. The key factors driving the segment growth are the increased focus of the food companies on enhancing value and efficiency, production capacity, the growth of e-commerce, and private equity investment. Along with the core service offerings of manufacturing, food contract manufacturers are offering different processes, including dry blending, spray drying, and extrusion. Some exceptional food recipes offered by some food companies boost market growth.

The packaging service majorly involves the primary forms of packaging, which are mostly used to protect the product from contamination. This packaging includes stand-up pouches, shrink wrapping, blister packs, and jars. These manufacturers create a one-stop shop for food manufacturing, and they are focusing on secondary packaging. 

Custom formulation and research and development are expected to grow at a faster CAGR during the forecast period in the food contract manufacturing market. There is no dedicated R & D team in small- and medium-scale food companies to create new products or identify consumer insights to develop the company further. Personnel, equipment, and expertise are present in the food contract manufacturers company.

Global Food Contract Manufacturing Market Analsyis By Products

Dietary supplements are expected to have a significant market share in the food contract manufacturing market during the forecast period. The dietary segment requires the customization of the food products as per the consumer's requirements, so the contract manufacturers play a vital role in the production of the custom formulation for the consumers. To tailor the unique formulation as per the specific health goals, ingredients, and nutritional requirements, collaboration with retailers, dealers, brands, or companies is required. There is a requirement for stringent adherence to food quality control standards and regulatory compliance in the production of dietary supplements. The contract manufacturers in the food industry sector are widely aware of the complex regulatory compliances to ensure that dietary supplements follow the safety and quality standards.

 REGIONAL ANALYSIS

The largest market share in the food contract manufacturing market is accounted for by the Asia-Pacific region. It is expected to grow at a fast CAGR rate during the forecast period. The increase in population number, household income, and rapid industrialization would transform the food industry. In this region, India and China are the most populous countries which have a huge requirement for food manufacturers. In terms of global demand for food products, China dominates the market share.

North America is in the transition phase, mostly seen in the U.S. For food formulation, quality control, and production capabilities, food companies in the U.S. are becoming more reliant on food contract manufacturers, which boosts the growth of the food contract manufacturing market.

Europe has a robust food processing equipment industry that benefits the food manufacturers. The BREXIT and the pandemic are both expected to propel the food companies to restructure their supply chains that are relying on the Asia-Pacific region, and it is expected to provide an expansion capacity for these industries in Europe. 

In Australia, the demand for convenience foods in the manufacturing service sector is expected to witness significant growth during the forecast period. The key factors driving the market in this region are favourable government support, the importance of quality, and the production of clean and natural food products. These will enhance the country's industrial growth.

KEY PLAYERS OF THE GLOBAL FOOD CONTRACT MANUFACTURING MARKET

Major Key Market Players in the Food Contract Manufacturing Market include Hindustan Foods Limited, De Banketgroup B.V., Kilfera Food Manufacturers Limited, Thrive Foods LLC, Omni blend, Orion Food Co., Ltd, Nutrasccience Labs, Inc, Cremica, Pacmoore Products Inc, SK Food Group, Christy Quality Foods (CQF), Hearthside Food Solutions LLC, Fibro Foods, Gopal Food Products

RECENT HAPPENINGS IN THE MARKET

• In 2023, a contract was signed between Annapurna Swadisht and Gopal Food Products. The manufacturing unit per month has the capacity of 1000 MT of biscuits, 150 MT of snacks, and 60 MT of namkeen. It caters to the market in the North West and Central India.
• In 2023, Thrive Foods announced the acquisition of Groneweg Group, which is also known as Freeze-Dry Foods. Thrive is a global manufacturer of dried freeze products. Air-dried and frozen ingredients are manufactured by the Groneweg Group, which is also a supplier of it.
• In 2023, SK Food Group will start its fourth production facility in the U.S. and is a premier leader in custom food manufacturing. By 2025, the manufacturing unit construction will be completed. It includes a special partnership with the PIE center to provide specialized employee training.

DETAILED SEGMENTATION OF THE GLOBAL FOOD CONTRACT MANUFACTURING MARKET INCLUDED IN THIS REPORT

This research report on the global food contract manufacturing market has been segmented and sub-segmented based on services, products, and region.

By Services

• Manufacturing Services
• Packaging Services
• Custom Formulation
• Research and Development Services

By Products

• Convenience Foods
• Bakery products
• Dietary Supplements
• Dairy products
• Confectionery products
• Others

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa