Food Contract Manufacturing Market Research Report: By Ingredient Type (Dairy & Dairy Alternatives, Fruits & Vegetables, Meat, Poultry & Fish, Bakery & Cereals, Oil & Fat), By Packaging Type (Frozen, Refrigerated, Aseptic, Canned, Dry), By Product Type (Ready-to-Eat Meals, Dairy Products, Meat Products, Frozen Meals, Baked Goods), By Customer Type (Food & Beverage Companies, Retailers & Distributors, Restaurants & Food Service, Industrial & Institutional Users), By Service Type (Manufacturing & Processing, Formulation & Development, Packagi

Global Food Contract Manufacturing Market Overview

Food Contract Manufacturing Market Size was estimated at 156.9 (USD Billion) in 2022. The Food Contract Manufacturing Industry is expected to grow from 166.95(USD Billion) in 2023 to 291.83 (USD Billion) by 2032. The Food Contract Manufacturing Market CAGR (growth rate) is expected to be around 6.4% during the forecast period (2024 - 2032).

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Key Food Contract Manufacturing Market Trends Highlighted

The Food Contract Manufacturing Market is experiencing significant growth, driven by factors such as increasing demand for convenience foods, globalization of food chains, and rising disposable income in emerging markets. The market is also characterized by the emergence of new technologies, such as artificial intelligence (AI) and automation, which are streamlining production processes and enhancing efficiency.

Manufacturers are increasingly focusing on developing innovative products and services to cater to the changing dietary habits of consumers. Opportunities for growth lie in the expansion of niche markets, such as clean-label products, gluten-free foods, and plant-based alternatives. The trend towards personalization and customization is also creating new opportunities for contract manufacturers to offer tailored solutions.

Recent market trends include the increasing adoption of sustainable practices as consumers become more environmentally conscious. Contract manufacturers are responding to this trend by investing in renewable energy sources, reducing waste, and using eco-friendly packaging. The growing popularity of e-commerce is also influencing the market, as contract manufacturers partner with online retailers to provide direct-to-consumer delivery.

Food Contract Manufacturing Market Drivers

Changing consumer preferences

The food industry is constantly evolving to meet the changing needs of consumers. In recent years, there has been a growing demand for healthier, more convenient, and more sustainable food products. This has led to a surge in the popularity of food contract manufacturing as companies look for ways to outsource their production to meet these demands. Food contract manufacturers can provide a wide range of services, from product development and formulation to packaging and distribution.This allows companies to focus on their core competencies and leave the manufacturing to the experts. The growing demand for healthier, more convenient, and more sustainable food products is expected to continue to drive the growth of the food contract manufacturing market in the coming years.

Rising costs of food production

An important factor that contributes to the development of the food contract manufacturing market is the increasing cost of food production. Nowadays, food manufacturers are under strong pressure to cut costs to stay afloat. A food contract manufacturer can help a company reduce their costs by optimizing its production processes and providing access to an economy of scale. Furthermore, FCMs can help a company reduce its risks by sharing their know-how and expertise and providing access to the latest technology.

Increasing demand for food safety

Increasing desire and demand for the safety of food are also the factors that continue to drive the growth of food contract manufacturing. With time, consumers are more sophisticated and careful about the food they eat, and thus, food companies are forced to employ new technologies and approaches to make sure the foods they produce are safe. Overall, food contract manufacturers can be beneficial for companies since they provide them with needed technologies in terms of manufacturing and sanitation with respect to increasingly common regulations.

Food Contract Manufacturing Market Segment Insights:

Food Contract Manufacturing Market Ingredient Type Insights

Introduction Ingredient Type segments the Food Contract Manufacturing Market into Dairy Dairy Alternatives, Fruits, Vegetables, Meat, Poultry Fish, Bakery Cereals, and Oil Fat. Among these segments, the Dairy Dairy Alternatives segment is projected to dominate the market, claiming a revenue share of approximately 30% by 2032. This development is associated with the wide adoption of manufacturing under the contract by dairy companies as a way to cut down operational expenses and enhance operational efficiency. Besides, due to the growing customer demand for convenience, the rise in popularity of plant-based products should also foster segment growth.Moreover, the Fruits and Vegetables segment is expected to facilitate the most prominent overall increase due to the rising demand for minimally processed and ready-to-eat food. Here, contract manufacturers in the food industry are partnering with companies to produce frozen, canned, and dried fruits and vegetables. The Meat, Poultry Fish segment is also expected to underline steady growth as a response to the rise in processed meat products demand and the growing consumer appetite for convenient and value-added products. Contract manufacturers are going to work on presenting innovative and sustainable options.Lastly, the Bakery Cereals segment's moderate progress should be linked to the increasing need for packaged and baked goods. The underlying contract manufacturers should assist the bakeries in optimizing their heavy-duty and broadening the product lines. The Oil Fat segment should show stable growth as the food and beverage industry expands. Contract manufacturers with expertise keep being critical for running safe production at optimal costs and presenting innovative solutions to the companies in the industry.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Food Contract Manufacturing Market Packaging Type Insights

The Food Contract Manufacturing Market is segmented based on Packaging Type into Frozen, Refrigerated, Aseptic, Canned, and Dry. Among these, the Frozen segment accounted for a leading market share in 2023 and is foreseen to continue leading throughout the assessment period. The Frozen segment is expected to grow on account of the increasing demand of consumers for frozen food products in order to save time and for being refrigerated for a longer period. The Refrigerated segment is also expected to experience growth from the consumer side owing to their increased demand for consuming readymade food as well as perishable food.The Aseptic sector is likely to witness steady albeit slow growth on account of its extended shelf life without the addition of preservatives. The Canned sector is expected to sit on the rather stagnant side as canned packaging finds utilities in a vast range of food in this food industry, such as processed fruits, vegetables, and meat. The Dry sector is expected to bring in moderate growth as its demand is centered upon the packaging of food such as cereals, snacks, and powdered soft drinks.

Food Contract Manufacturing Market Product Type Insights

The product type segment of the Food Contract Manufacturing Market exhibits diversity, with each type catering to distinct consumer needs. Ready-to-eat meals, for instance, gained significant traction in 2023, accounting for a revenue share of 28.1%. The convenience and time-saving aspects of these meals align with the fast-paced lifestyles of consumers. Dairy products followed closely, capturing a 24.7% revenue share, driven by the growing demand for processed dairy products such as cheese, yogurt, and milk powder. Meat products, with a 20.9% revenue share, showcase the increasing popularity of processed meat products, including sausages, bacon, and cold cuts.Frozen meals, holding a 17.6% revenue share, benefit from advancements in freezing technologies, ensuring product quality and extending shelf life. Lastly, baked goods, with an 8.7% revenue share, cater to the growing demand for convenience foods and sweet treats.

Food Contract Manufacturing Market Customer Type Insights

The Food Contract Manufacturing Market is segmented by Customer Type into Food Beverage Companies, Retailers, Distributors, Restaurants, Food Service, and Industrial Institutional Users. - Food Beverage Companies held the largest share of the market in 2023, accounting for over 40% of the total revenue. This segment is expected to continue to grow at a steady pace in the coming years, driven by the increasing demand for processed and packaged food products. - Retailers Distributors are another major customer type in the Food Contract Manufacturing Market, accounting for around 30% of the total revenue in 2023.This segment is expected to grow at a moderate pace in the coming years, driven by the increasing demand for private-label products and the growth of e-commerce. - The Restaurants Food Service segment is expected to grow at a relatively faster pace in the coming years, driven by the increasing number of food service establishments and the rising popularity of eating out. The industrial Institutional Users segment is expected to grow at a steady pace in the coming years, driven by the increasing demand for food ingredients and additives from various industries.

Food Contract Manufacturing Market Service Type Insights

The Food Contract Manufacturing Market is segmented into various service types, including manufacturing and processing, formulation and development, packaging and distribution, quality control and assurance, and logistics and transportation. Among these, the manufacturing and processing segment held the largest revenue share in 2023, owing to the increasing demand for outsourced manufacturing services from food and beverage companies. This segment is expected to continue its dominance throughout the forecast period, with a projected revenue of USD 102.34 billion by 2032.The formulation and development segment is another significant service type in the Food Contract Manufacturing Market, with an estimated revenue of USD 26.54 billion in 2023. This segment involves the development of new food products and the optimization of existing formulations, which is crucial for companies to keep up with changing consumer preferences and market trends. Packaging and distribution is also a key service type in the Food Contract Manufacturing Market, with an estimated revenue of USD 22.15 billion in 2023. This segment includes packaging design, production, and distribution services, which are essential for ensuring product safety, quality, and shelf life.Quality control and assurance is another important service type in the Food Contract Manufacturing Market, with an estimated revenue of USD 15.86 billion in 2023. This segment involves implementing quality control measures throughout the manufacturing process to ensure compliance with food safety regulations and standards. Logistics and transportation are also key service types in the Food Contract Manufacturing Market, with an estimated revenue of USD 11.23 billion in 2023. This segment involves the transportation and storage of food products, which is essential for ensuring timely delivery and maintaining product quality.

Food Contract Manufacturing Market Regional Insights

The Food Contract Manufacturing Market is segmented regionally into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. North America is expected to hold the largest market share in 2023, owing to the presence of a large number of food and beverage companies and the growing popularity of convenience food in countries like the United States and Canada. Europe is expected to be the second-largest market due to the region's strong food processing industry and increasing demand for healthy and sustainable food products.The Asia-Pacific region is expected to be the fastest-growing market, driven by the rising disposable incomes and the growing middle class in countries such as China and India. South America, the Middle East, and Africa are expected to witness moderate growth in the Food Contract Manufacturing Market during the forecast period.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Food Contract Manufacturing Market Key Players And Competitive Insights:

Major players in the Food Contract Manufacturing Market industry are constantly striving to gain a competitive edge by investing in research and development, expanding their product portfolio, and acquiring smaller players. Leading Food Contract Manufacturing Market players are focusing on developing innovative products that meet the evolving needs of consumers, such as clean-label and sustainable products. The competitive landscape of the Food Contract Manufacturing Market is expected to remain highly competitive in the coming years, with key players continuing to invest in their capabilities and market strategies. Food Contract Manufacturing Market development is being driven by the growing demand for convenience foods, the increasing popularity of e-commerce, and the rising demand for healthy and sustainable products.A leading company in the Food Contract Manufacturing Market is ADM. ADM is a global leader in the production of food ingredients, including sweeteners, starches, and flavors. The company has a strong presence in the food contract manufacturing market, offering a wide range of services to its customers. ADM's capabilities include product development, manufacturing, and packaging. The company also has a global network of manufacturing facilities, which allows it to meet the needs of its customers around the world. ADM is committed to innovation and sustainability, and it is constantly investing in new technologies and products.A competitor company in the Food Contract Manufacturing Market is Ingredion. Ingredion is a global provider of food ingredients, including starches, sweeteners, and texturizers. The company has a strong presence in the food contract manufacturing market, offering a wide range of services to its customers. Ingredion's capabilities include product development, manufacturing, and packaging. The company also has a global network of manufacturing facilities, which allows it to meet the needs of its customers around the world. Ingredion is committed to innovation and sustainability, and it is constantly investing in new technologies and products.

Key Companies in the Food Contract Manufacturing Market Include:

• The Kellogg Company


• PepsiCo, Inc


• CocaCola Company


• Danone SA


• NESTLE SA


• Mondelez International, Inc


• Fonterra Cooperative Group


• Ferrero SpA


• General Mills, Inc


• Britannia Industries Ltd


• Kraft Heinz Company


• Mars, Incorporated


• Unilever PLC

Food Contract Manufacturing Market Industry Developments

The Food Contract Manufacturing Market is projected to grow from USD 187.14 billion in 2023 to USD 291.83 billion by 2032, exhibiting a CAGR of 6.4% during the forecast period. The rising demand for convenience foods, growing population, and increasing disposable income are key factors driving market growth. Furthermore, the adoption of advanced technologies such as automation and robotics is expected to enhance efficiency and productivity in the food contract manufacturing sector. Recent developments include the acquisition of Kerry Group by International Flavors Fragrances (IFF) and the partnership between Corbion and Agropur to expand their plant-based protein offerings.

Food Contract Manufacturing Market Segmentation Insights

• Food Contract Manufacturing Market Ingredient Type Outlook
  
  
  
  • Dairy Dairy Alternatives
  
  
  • Fruits Vegetables
  
  
  • Meat, Poultry Fish
  
  
  • Bakery Cereals
  
  
  • Oil Fat
  
  
  
  

• Food Contract Manufacturing Market Packaging Type Outlook
  
  
  
  • Frozen
  
  
  • Refrigerated
  
  
  • Aseptic
  
  
  • Canned
  
  
  • Dry
  
  
  
  

• Food Contract Manufacturing Market Product Type Outlook
  
  
  
  • Ready-to-Eat Meals
  
  
  • Dairy Products
  
  
  • Meat Products
  
  
  • Frozen Meals
  
  
  • Baked Goods
  
  
  
  

• Food Contract Manufacturing Market Customer Type Outlook
  
  
  
  • Food Beverage Companies
  
  
  • Retailers Distributors
  
  
  • Restaurants Food Service
  
  
  • Industrial Institutional Users
  
  
  
  

• Food Contract Manufacturing Market Service Type Outlook
  
  
  
  • Manufacturing Processing
  
  
  • Formulation Development
  
  
  • Packaging Distribution
  
  
  • Quality Control Assurance
  
  
  • Logistics Transportation
  
  
  
  

• Food Contract Manufacturing Market Regional Outlook
  
  
  
  • North America
  
  
  • Europe
  
  
  • South America
  
  
  • Asia-Pacific
  
  
  • Middle East and Africa