Personal Care Contract Manufacturing Market: Global Trends & Challenges

Author : Mrudula Karmarkar | Published On : 15 Jan 2024

San Francisco, 15 January 2024: The Report Personal Care Contract Manufacturing Market Size, Share & Trends Analysis Report By Service (Manufacturing, Custom Formulation and Packaging) By Region, And Segment Forecasts, 2023 - 2030

The global personal care contract manufacturing market size is anticipated to reach USD 37,114.2 million by 2030, exhibiting a CAGR of 8.1% during the forecast period, according to a new report by Grand View Research, Inc. Rising demand for manufacturing capabilities from OEMs, coupled with increasing requirement of personal care products, is anticipated to drive the industry growth.

Growing demand for organic and natural personal care products on account of increased awareness of the harmful effects of chemical products is likely to boost growth in the sector over time. Furthermore, the COVID-19 pandemic has resulted in increased demand for personal hygiene products, which, in turn, positively impacts the industry growth.

The rapid growth of the personal care industry especially in China, India, and Brazil is projected to propel the growth of the contract manufacturing market. The need for companies to cater to this rising demand for fast-moving personal care products such as shampoos, soaps, and creams has enhanced their production capabilities, which is projected to drive the contract manufacturing market.

Changing consumer trends associated with increased digital disclosure, personalized shopping experience, and availability of abundant information on personal care products are anticipated to drive the demand globally. Furthermore, the rise in demand for skincare and make-up products, especially from the millennials, is expected to drive the industry.

The market trend suggests a shift in the focus of manufacturers toward innovative products, coupled with the all-encompassing availability of these products. Companies are engaging in extensive commercialization of personal care products through marketing and branding that involves heavy advertisements. Hence, companies are opting for contract manufacturing.

The shifting focus of significant companies producing personal care products from in-house production to R&D and other promotional activities is projected to boost the contract manufacturing of these products. The personal care industry witnessed a significant decline in the first two quarters of 2020 due to the COVID-19 pandemic. Factors such as reduced discretionary spending, rising unemployment rates, lockdown restrictions, and altered consumer behavior have reduced the consumption of personal care products. However, easy accessibility of e-commerce platforms, swift vaccination drives, fiscal stimulus packages, and improving consumer demand are expected to drive industry growth.

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It is worth mentioning that the U.S. was one of the worst-hit countries due to COVID-19, with personal care players switching to manufacturing hand sanitizers to meet demand. The personal care industry which saw a decline in 2020 is expected to see a rise on account of vaccine rollouts, ease of restrictions, increasing consumer spending, and fostering partnerships among key players for innovative products.

The rising awareness about the side effects resulting from the use of skincare, hair care, and cosmetic products made of chemical components has impacted the rise in demand for organic products in personal care, thereby increasing the growth of the PCCM market of these products.

Personal Care Contract Manufacturing Market Report Highlights

• The skincare segment in manufacturing service is expected to grow at a CAGR of 8.9% over the forecast period, on account of the increasing demand for premium products along with increasing consumer preference for spray-on antiperspirants
• Packaging service accounted for 8.2% of the global revenue share in 2021, on account of its ability to increase the aesthetic value of the product, thereby promoting the product and influencing the customer’s purchasing decision significantly
• Asia Pacific accounted for a 37.4% share of the global revenue in 2022, on account of the presence of low-cost, high-quality packaging along with logistics, and sales provided by contract manufacturers
• Germany is expected to grow at a CAGR of 8.4% during the forecast period from 2022 to 2030, on account of the increasing demand for women's facial products such as lip-gloss and nail paints in the country
• The major players in the industry are focusing on regional expansion in the high demand regions of the Asia Pacific and North America, to obtain a competitive edge over their competitors

The increase in the millennial trend and its impact on their followers to buy the products advertised by the millennials has impacted the growth of personal care contract manufacturing. Furthermore, the increase in social media beauty specialist retailers and e-commerce websites has provided huge opportunities for the sales of personal care products.

Contract manufacturing is a highly competitive, difficult, and low-margin business, which needs to be actively managed. The presence of a vast number of contract manufacturers, striving over low-profit margin to offer the formulators a favorable deal, has steered the business into a very narrow pass for being profitable. High investment costs, coupled with low margins, also tune up the risk factor in the business, making it a big restraint for industry growth.

The skincare segment in manufacturing service is expected to grow at a CAGR of 8.9% during the forecast period. Rising demand for skincare products, particularly from the millennials to delay the signs of aging is expected to propel the demand. In addition, increasing R&D expenditure on producing specialty formulations involving organic ingredients is expected to propel the global personal care contract manufacturing market growth.

Personal Care Contract Manufacturing Market Report Scope

The companies in the personal care contract manufacturing market are highly competitive and compete on the basis of prices and regional expansion. The companies provide high-performance products with customized solutions in terms of services.

The players give a competitive edge to their competitors based on various factors like product prices, product performance, product formulation, raw materials used for the product manufacturing, packaging, reputation, and availability. The companies employ various strategies to stay on top of the market such as new product launches, R&D investments, distribution network expansion, and mergers & acquisitions.

List Of Key Players Of Personal Care Contract Manufacturing Market

• Cosmetic Group USA
• McBride
• Knowlton Development Corporation
• HCT Group
• KIK custom products
• PakLab
• Fareva
• Albea
• SeaCliff Beauty Packaging &Laboratories
• WWP Beauty