Please fill out the following form to submit a Request for Quote to any of the following companies listed on
Get Your Company Listed on this Power Page
Introduction
This article takes an in-depth look at contract packaging.
In this article, we will look at topics such as:
What is Contract Packaging?
Types of Contract Packaging
Equipment Used in Contract Packaging
Deciding on Contract Packaging as a Business Strategy
Advantages of Contract Packaging
And much more…
Chapter 1: What is Contract Packaging?
Contract packaging is a process that uses a contracted company to package products for shipment and sale. Also known as co-packing or co-packaging, contract packaging companies are hired to package, store and distribute another company's products, e.g. units of medicine. The form of the packaging can be a simple clamshell or a more complex form depending on the needs of the client and the type of product. There isn’t one standardized way to complete contract packaging. In most cases, it is customized to fit the specific needs of the product.
Contract packaging can take several forms and may be chosen by producers due to the producer not having the equipment or facilities to package products themselves. Every contract packaging company provides a wide assortment of services to help producers meet their packaging needs. Contract packaging companies have the equipment, resources, organization, and knowledge to package a product, manage the supply chain, and supervise shipping.
Services provided by the contract packaging companies include:
Sterilization
Blister packaging
Cardboard package design
Shrink wrapping
Military grade packaging
Liquid dispensing and packaging
As specialists, contract packagers can assist a company in developing attractive and cost-effective packaging systems. They offer numerous packaging options to the contracting company based on their experience and exposure to various types of packaging. Contract packaging is for retailers and wholesalers, bulk manufacturing, cargo shipping, and industrial equipment.
All contract packagers have an assortment of packaging methods but may focus on specific types of services. Small contract packagers focus on small-scale and detail-oriented projects, while larger contract packagers concentrate on high-volume packaging.
For companies that do some of their own packaging, contract packagers provide additional support that goes beyond the capacity of the hiring company. In some cases, a contract manufacturer will serve as a contract packager for creating and packaging products for a hiring company.
Chapter 2: Types of Contract Packaging
Unlike in-house packaging completed by a manufacturer, contract packaging companies offer a set of services that are designed to meet the needs of the contracting company. Although there are crossovers in the services provided by contract packaging companies, each provides a specialty that differentiates them from other companies.
While some contract packagers may focus on blister packaging, another company may specialize in label printing and shrink wrapping. The wide range of services provided by contract packaging includes store displays, medical packaging, and protective coverings. Each method is suited for the best presentation and protection of a product.
Packaging Design
Packaging design is vital as the packaging is used not only for the protection of the contents but promoting the brand of the company. Packaging design considers brand graphics and packaging sizes in the contract packaging operations.
The packaging design has to consider aesthetics. The look of a product packaging is of value just as the product itself because a poor packaging design has a negative effect on sales.
When designing packaging, some considerations need to be taken into account. These considerations include ease of storage, protection of the contents, information display, and catching customers' attention on the shelf.
The functions of product packaging are elaborated below:
Protection: The primary purpose of product packaging is to protect the contents from damage either in storage, in transit, or on the shelves. Therefore, product packaging needs to be robust and not prone to tampering.
Information: The product has to have information describing it and information about the contents or expiry dates. A customer can then make informed decisions about the product or can further enquire about the product.
Attraction: The aesthetics of a product on the shelf need to be attractive to the customer to gain attention. Customer attention can be accomplished by intricate designs, color themes, or customized packaging.
Differentiation: The packaging design is also essential in differentiating assorted products or brands using colors, logos, or shapes. Better and innovative packaging designs can stand out and attract more customers.
Importance of Innovative Packaging Designs
Packaging design can paint a picture of the manufacturer and the brand it represents. Through the packaging design, customer-first experience is with the package which can entice them to buy the product or not.
Some of the reasons why packaging design matters include:
A Good First Impression
A product's first impression matters and can make a product stand out amongst other products. The packaging design must be eye-catching to stand out on the store shelves or e-commerce website pages. Package design is a tool for brand awareness.
Developing and Supporting Brand Identity
The packaging design tells a story about the brand, informing the product's identity. Package design is what the consumer first experiences before knowing much about the brand. The packaging is designed to tell an honest and good story about the brand. Details such as the company logo, trademarks associated with the company, fonts, and colors are essential.
Communicating With the Customer
As much as the packaging design should be innovative, it should be informative. The packaging design has to inform the consumer about the key information of the product inside. Some of the critical questions that the packaging design should provide answers to are:
What is the product?
Who is the product created for?
When was it manufactured?
When does it expire?
What's so good about the product?
What to Consider When Creating Attractive Product Packaging
Three key questions can help a packaging designer create a product that aligns with the image and values of the brand.
What is the product being sold?
The unique value proposition sets the base of the packaging design. Product type, size, and material type will influence the packaging design.
Who is the intended target market?
Knowledge of the target market helps make the product appealing to the intended customer. Therefore, the packager should have these considerations in mind.
What is the aesthetic of the brand?
The design and aesthetics of the product need to be clear to the contract packager since the packaging design is a representation of the brand. Thus, in designing the product aesthetics, the contract packager needs to consider the product, the budget, the competition, and the market.
Therefore, the packaging design can then be evaluated based on aspects such as:
Understandability: The consumers should be able to understand the product at first glance. It should be clear what the product is and its purpose without confusing consumers.
Integrity: The packaging design should represent the product honestly. Graphics and pictures used should be realistic though they should be the best.
: The product should have the potential for future expansion and exploration opportunities. The packaging design should be versatile and able to accommodate additional products.
Packaging Testing
Packaging testing is put in place to test the robustness of the packaging before it can be used or shipped to the final destination. The testing measures can be standard or customized and help to ensure the effectiveness and quality of the packaging. The testing can be carried out by either the hiring company or the contracting company.
Once the product goes to market, the packaging design cannot be iterated in real-time with ease. Therefore, huge costs are associated with repeating the packaging design during production. The prices are even worse if the iterations have to be done after the product has reached the market. In addition, changes would involve recalling the product and redesigning when there is a negative customer reception.
The packaging testing process has to be balanced with speed to market as this must consider storage, shipping, and marketing. In addition, the return on investment on the packaging design must be protected and maximized. The packaging testing should advise on this.
Importance of Product Packaging Testing with Consumers
The packaging design has to be tested with the consumers before the product launch to align with their needs. Coupled with an alignment with the packaging trends and be the next big innovative idea. Testing helps companies make informed decisions before the finished product can be launched.
Real-time insights from the target consumers are advantageous in that informed and appropriate decisions can be made. In addition, the consumer feedback. Feedback helps the brand be fine-tuned and iterated to a better design to understand the why.
There are core considerations or questions that the design process and testing process together with the consumer engagement process must answer.
There are core considerations or questions that the design and testing processes and consumer engagement processes must answer. These fundamental questions are:
Is the first impression of the packaging attractive to the consumer?
Is the packaging capable of driving the purchasing intent?
Is the packaging representative of the brand positively and consistently?
The packaging design testing is the last phase of the product innovation cycle. At this phase, the company can understand if and why the packaging design will be successful in the market. Meticulousness is the testing phase that will help with the significant investment pit in product development.
Product Packaging
The gist of contract packaging is essentially the physical packaging and assembly of products. Some examples of product packaging are blister packaging which involves heat sealing printed cardboard using a plastic blister, and flow wrapping, which is the wrapping of a product using a protective film.
Types of Product Packaging
Various contract packagers have their niche and specialize in their industry. In addition, there are multiple types of product packaging with different applications.
The primary packaging types are:
Blister Packaging
They are also known as blister carding. It is best applied in small consumer products. Blister packaging is when a plastic blister is heat-sealed to printed cardboard. There is an easy view of the product as it is placed between the two materials. Blister packaging is commonly used in small electronic gadgets, over-the-counter pharmaceuticals, chewing gum, etc. It takes the shape of a bubble or blister, which is a 'blister' that covers the product completely.
The conventional blister packaging type is the face seal blister with a cardboard backing. The blister can be made into any shape, either uniform to protect uniformly shaped products or can be unusual to protect unevenly shaped products.
Blister packs are best suited for:
Toys
Batteries
Electronic accessories, e.g., headphones and cables
Stationery, e.g., pens and super glue.
Pharmaceutical products, e.g., capsules
DIY tools, e.g., screwdrivers and bolts
Toothbrushes
Delicate components
Other than protecting a product, Blister packaging can keep products uncontaminated and clean—the reason why they are chosen in packaging pharmaceutical tablets. Blister packs are also tamper-proof, thus protecting the consumer from buying products tampered with.
The commonly used blister packaging types are:
Face Seal Blister: This is the most common one and involves molding a plastic blister around the product. It is heat-sealed to a backing made of cardboard. The significant advantage of this type of blister packaging is that it is inexpensive and can be used for high volume production.
Full Face Seal Blister: This is when a blister is used to cover the product and the cardboard backing. They were accomplished by heat-sealing the plastic to the cardboard or sliding the plastic through extra plastic pieces on either side. The advantage of this blister type is that it makes the packaging stronger and gives the product a better look.
Full Card Blister: This is similar to the full-face seal blister. The difference is that the plastic has flanges wrapping around the cardboard rather than heat-sealing it. The cardboard can be slid or stapled into position.
Trapped Blister Packaging
This is also similar to the face seal blister in many ways. The difference is that the plastic sticking to the cardboard has another cardboard fitted in front and around the blister shape. Thus, the blister is trapped between the two cardboards where the top cardboard piece is die-cut according to the product bister. This approach is cheaper than most methods because it does not use heat sealing. It will be evident if the package's front cardboard has been tampered with. The look is better as the cardboard covers the plastic.
Flow Wrapping
They are also known as fin sealing. Flow wrapping is the wrapping of a product using a protective film. The film's appearance can be customized to be transparent, opaque, and colored. Flow wrapping is mainly recommended in applications that do not prioritize superior aesthetics, for example, industrial products, business-to-business products, and items shipped directly to the customer. In some cases, the second layer of wrapping is applied, known as overwrapping.
Clamshell Packaging
Clamshell packaging has improved security compared to blister packaging and involves sealing a product within two preformed plastic sheets. Clamshell products are much harder to open and thus more tamper-proof. Electronics and other expensive products use clamshell designs, which provide extra security. It is also known as clam packs or clam packaging and does not use a cardboard backing. Different clam packs have different orientations. Some can stand upright when placed on shelves. Others have a hole that enables them to be hung on racks. The bubble can either be uniformly sized in the front and back or uniquely shaped to match the product shape.
Clamshell packaging is mainly suited for products that do not fit well in blister packs or on sets that have numerous parts. Some examples include:
Gift sets
Small sets of tools
Cosmetic sets
Light bulb sets
Shrink Wrapping
Involves a plastic polymer film that is shrunk over a product. Heat is applied to the shrink film, thus molding it around the product. Examples of shrunk products include meats, beverages, books, and appliances.
Shrink wrapping can be done using various ways. For example, smaller items can be put in a shrink wrap bag, then heated using a hand heat-gun. In addition, when using adjustable shrink wrap, more oversized products can shrink wrap easier. Thus, environments with bigger items to shrink wrap can use shrink wrap machines that typically wrap, then heat and seal simultaneously.
Shrink Wrapping Advantages
Protection: A very tight seal is created when heat is applied to the shrink wrap. The tight seal protects the shrink-wrapped product and makes it less vulnerable to dirt, dust, or moisture damage. Some shrink wraps have UV protection capability, protecting products from the sun's rays.
Branding: The shrink wrap can be designed with pictures, colors, logos, and words that help market the brand. The shrink wrap becomes a marketing tool that can enhance brand awareness, making the brand more visible to customers.
Durability: The plastic used to make the shrink wrap durable and sturdy. It cannot be punctured or torn easily. Contrary to other materials, shrink wrap does not weaken or become brittle when exposed to extreme cold or sun. It does not loosen or sag once it has been heated and sealed over the product.
Affordability: Shrink wrapping is typically cheaper than many packaging materials. It minimizes space usage. It also bundles up items together, making the packaged product less bulky than using boxes. The space saved translates to storage and transport money saved.
Tampering: The shrink wraps seals and maintains their shape once applied, thus tamper-proof. Numerous food manufacturers and pharmaceutical companies now shrink wrap their products for this reason. Some shrink wrap types can change color when the plastic has been stretched and become evidence that the sealed items have been tampered with. Government agencies and banks use such shrink wraps.
Convenience: The most significant advantage of shrink wrap is that it can be used on any size project. Items as small as electrical wires can be shrink-wrapped to mitigate exposure to moisture. Bigger items such as boats and greenhouses can also use shrink wrap. Buildings can also be shrink-wrapped when preventing exposure to hazardous materials or preventing chemical leaks.
Preservation: Shrink wrap can also be used to preserve foods during transit and extend shelf life. In such cases, food-grade shrink wrap is used.
Dry or Liquid Filling
Numerous contract packagers specialize in packaging powder or liquid products. Injection and funneling equipment are used for packaging the product into tubes, bottles, pouches, etc. Such products include consumer drinks, glue, baby powder, etc.
Labeling Services
Labeling services can either be stand-alone or can be part of the shipping process. Labeling helps with inventory control that is vital in the manufacturing and shipping consumer goods. This is accomplished by the two main types of contract labeling services, namely radio frequency identification (RFID) and barcoding.
Barcoding uses a series of lines with different widths and can be read by checkout or warehouse tools. The barcode is unique to that product or stock-keeping unit (SKU) and has pricing and product category information.
RFID tags can either be on the product itself or on shipping containers. They allow for real time tracking of the product and provide visibility of the product’s movement from the time it dispatches from the warehouse.
Shipping Services
Contract packaging may be limited to just packaging while the hiring company does the shipping. However, the contract packager can package and ship the product to the final destination in some cases. Tracking services for the product may also be offered.
Leading Manufacturers and Suppliers
Chapter 3: Equipment Used in Contract Packaging
Various machinery, sometimes used within automated lines, are utilized in packaging processes to yield faster production and shorter turn-around times. For example, liquids such as soft drinks can be bottled using automated bottling lines. Dry products like powders and seeds can be packaged using auger filling machines.
Other complex machines, such as vertical form fill sealing machines and automated assembly lines, can be used in contract packaging. The vertical form fill and seal machines make stand-up pouches from a flat reel. They then fill the pouches with the product and seal them. Such a machine can be used for solid or liquid products.
The machinery used depends on the type of product packaging needed. For example, if shrink-wrapping is required, then a heat tunnel on a conveyor can be used. On the other hand, if blister packs are necessary, then a thermoforming machine and other packaging formats in sealed trays, clamshells, and stand-up sachets would be used.
Chapter 4: Deciding on Contract Packaging for the Business Strategy
Contract packaging has become a strategic business decision due to dynamic consumer demands and sustainability. To stay competitive, many companies utilize contract packagers in their supply chains. Contract packagers come as collaborative partners who offer or facilitate the development of sustainable packaging, which then gets tested on the lines.
How Contract Packaging Can Align with Business Strategies
The increasing consumer demand for sustainability and manufacturers' need for eco-friendly and economical packaging designs means more companies are turning to contract packagers.
Strategic business decisions in favor of contract packaging can be made based on:
More Capitalization, Less Capital
Contract packagers help in saving resources in two fundamental ways. Firstly, contract packagers have the expertise, production facilities, and materials to cope with various packaging requirements. Lean manufacturing techniques are employed to minimize waste, thus reducing carbon footprint and increasing cost savings. Secondly, contract packaging helps the hiring company not invest in production materials and facilities. Therefore, the overhead is kept low and leads to a higher ROI.
Contemporary Industry Trends
Contract packagers have the capability of producing economic packaging solutions that conserve resources. These packaging solutions use resources, time, and space efficiently. Close collaboration between the hiring company and the contract packager facilitates research and development, enabling better products to the market. Conventionally, consumer preference had moved from paper and cardboard to plastic, but of late, this is now moving back to paper as this is the eco-friendlier option.
Sustainability
The single-use packaging is currently providing an environmental burden. The amount of packaging produced is overwhelming the current waste collection and recycling systems. Sustainable packaging should be fit for purpose with a lesser carbon footprint and save on resources. Packaging design and production should be efficient and effective to achieve sustainability and move towards a circular economy.
The packaging design needs to be reusable, biodegradable, or recyclable. Furthermore, consistent with a circular economy, the materials should circulate in a closed loop with no waste. Manufacturers thus need to respond to regulatory requirements and consumer demands by adopting sustainable packaging best practices. As a result, sustainability has become a point of competitive advantage.
Chapter 5: Advantages of Contract Packaging
Contract packagers are mostly preferred to test runs, promotional products, or short production runs. Short production runs help the hiring company to avoid procuring equipment that may be expensive and only used intermittently. Benefits of contract packaging are also seen in existing products that use promotional packaging in an interim.
There are four essential advantages of using contract packaging. These are:
Innovation – It helps brands to innovate much quicker. Contract packagers, as specialists in the business, are more flexible to expand in research and development, pilot labs and lines, and have the capacity for co-innovation programs. Collaborating and partnering with a contract packager can increase the product innovation levels for different brands and private labels.
Efficiency – Contract packaging can offer high productivity and yields. The efficiency and effectiveness make automation investments a viable option and provide further flexibility.
Capacity – Contract packagers invest in automation, new sites, and new lines and can offer non-stop run times. This provides much capacity for hiring companies to choose from.
Speed to market – Contract packagers can offer a faster turn-around time to deliver to market.
When Can a Contract Packager be Used?
Depending on circumstances, a contract packager may be necessary if:
The in-house lines of the hiring company are at capacity or are being prioritized for other projects.
The hiring company has no capabilities to carry out the required packaging operations.
There are specific regulatory requirements that cannot be done with ease by the hiring company.
The product uses a new format which the hiring company's packaging lines cannot support.
It is more cost-efficient to ship the product as components which are then packaged near the point of sale.
The development and/or packaging format is meant to run for a short while, and the hiring company is not willing to invest in equipment for this short run.
The hiring company is downsizing and has no adequate resources for the packaging project.
Considerations in Choosing a Contract Packager
The project's scope needs to be clearly defined before consulting a contract packager. This is important in choosing a suitable investment, collaboration, and partnership. Key considerations when selecting a contract packager include:
Equipment – Consider a contract packager with the right equipment and facilities for the project. Packaging requirements are different for different products. Depending on the contract packagers, some can run military-grade products or FDA-regulated products.
Expertise – Consider a contract packager with the experience and knowledge to meet the project's needs. A review of the contract packager's portfolio and a review from some of the serviced customers is necessary.
Cost – Consider a balance between cost and appropriate equipment and experience. It is essential to note the value offered by each contract packager, from design services to the quality of the packaging to product support.
Communication – Consider a contract packager willing to negotiate, discuss and advise on the available option and select the best for your needs.
Location – Freight costs can be reduced when a contract packager close to the hiring company's facilities is selected. Selecting a contract packager close to the point of sale can also be more beneficial if it is cheaper to ship bulk components to this location than shipping the packaged products.
Conclusion
Contract packaging involves putting a specific product into its completed packaging using a contracting business. A business can hire another business entity for the production of its packaging, product assembly and potentially even offer storage and distribution of these finished products.
Most companies take this route because they do not have the capacity in terms of equipment and knowledge. It is necessitated by a lack of time and resources to develop their packaging facilities or invest in expensive equipment. They then hire a packaging company on a contract that has the equipment, knowledge, and resources to manage the packaging supply chain on their behalf.
It is critical to make the right choice of a contract packager as this will be key in business strategy and brand awareness.
Leading Manufacturers and Suppliers
Related Posts
Blister Packaging
Blister packaging, or blister packs, are pre-formed packaging materials composed of a thermoformed plastic cavity and a pliable lid. In this type of packaging, the product is placed in deep-drawn pockets or cavities resembling a blister...
Thermoforming
Thermoforming is the process of heating thin plastic sheets to its forming temperature and stretching it over a mold which takes its shape. After cooling and setting of the molded plastic sheet, each part will be separated from its batch to form a single unit or product...