Global Personal Care Contract Manufacturing Market is Segmented By Formulation (Liquids, Creams, Lotions, Oils, Gels, Others), By Service (R&D and Formulation, Manufacturing, Packaging & Allied Services), By Application (Skincare, Haircare, Color Cosmetics, Fragrances & Deodorants, Others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2023-2030
Personal Care Contract Manufacturing Market Size
Global Personal Care Contract Manufacturing Market reached USD 20.8 billion in 2022 and is expected to reach USD 40.5 billion by 2030, growing with a CAGR of 8.7% during the forecast period 2023-2030. The increasing global demand for customised cosmetic products be a prominent factor in driving global personal care contract manufacturing market growth during the forecast period.
Contract manufacturers have substantial expertise in formulation development, allowing cosmetic brands to offer customized products are economical price points.
Middle East and Africa is expected to become an important market for global cosmetic companies over the forecast period. Many contract manufacturers are expanding their operations in the region. In November 2022, the Polish Investment and Trade Agency, Poland’s government agency promoting investment, announced plans to expand contract manufacturing facilities in the UAE, for polish cosmetic companies.
Personal Care Contract Manufacturing Market Scope
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Metrics |
Details |
|
CAGR |
8.7% |
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Size Available for Years |
2021-2030 |
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Forecast Period |
2023-2030 |
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Data Availability |
Value (US$) |
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Segments Covered |
Formulation, Service, Application, and Region |
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Regions Covered |
North America, Europe, Asia-Pacific, South America, and Middle East & Africa |
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Fastest Growing Region |
Asia-Pacific |
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Largest Region |
Asia-Pacific |
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Report Insights Covered |
Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and Acquisitions, New Equipment Type Launches, Growth Strategies, Revenue Analysis, Porter’s Analysis, Pricing Analysis, Regulatory Analysis, Supply-Chain Analysis and Other key Insights. |
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Personal Care Contract Manufacturing Market Dynamics
Growing Demand From Emerging Countries
Rapid economic growth over the past two decades in emerging regions such as Asia-Pacific, has led to profound socio-economic changes. It has led to the emergence of a large middle class which has becoming increasingly self-conscious and is driving the demand for various personal care products. New digital marketing strategies implemented by cosmetic brands based on social media trends are also driving demand, especially from the younger demographics.
India and China, with their large and younger populations are key markets for domestic and global cosmetic brands. However, consumers in these markets are also highly price sensitive and higher prices can have a significantly negative impact on sales. Therefore, many global cosmetic brands are outsourcing production to contract manufacturers to keep costs down and ensure competitive pricing to drive sales.
New Product Launches
The global cosmetics industry is rapidly evolving, with new emerging trends. Cosmetic brands have to stay on top of the latest emerging trends to create and launch new products in order to drive growth. With relentless competition and new brands entering the market, expansion of product lines is a major strategy used by brands to stay competitive.
Companies are also increasingly launching new organic cosmetic products due to growing consumer preference for cosmetic formulations with natural ingredients. Cosmetic companies are currently expanding their range of organic products and contract manufacturers play a major role in this expansion. Utilizing contract manufacturers allows companies to shorten their go-to-market time and ensure widespread product availability due to high production volumes.
Poor Quality Control
Reputed multinational cosmetic brands typically outsource cosmetic production to contract manufacturers in an effort to keep production costs down, thus ensuring competitive pricing. However, some contract manufacturers many not adhere fully to all necessary regulatory requirements and industrial sanitary protocols. Outsourcing production to contract manufacturers always carries a risk of substandard production due to poor quality controls, thus damaging brand reputation.
Over the years, many contract manufacturers have been found to make substandard products and lacking basic sanitation. Furthermore, lab analysis of many products manufactured by some contract manufacturers have found significant heavy metal contamination. To contain damage to brand reputation, many cosmetic brands are undertaking their own manufacturing. Poor quality control will present a major challenge for the global market growth.
Personal Care Contract Manufacturing Market Segment Analysis
The global personal care contract manufacturing market is segmented based on formulation, service, application and region.
Skincare Products are the Biggest Application for Personal Care Contract Manufacturing
Skincare is expected to account for nearly a third of the market share of application segment. The rise of various dermatological conditions, such as skin allergies as well as the increasing awareness about sun damage is prompting greater consumer demand for skincare products. It has consequently lead to an increased usage of multi-functional skincare products. Modern skincare formulations offer multiple benefits such as sunscreen protection and moisturization.
In order to increase market penetration, cosmetic brands are positioning their products throughout the entire pricing spectrum, thus ensuring access to people of all socio-economic backgrounds. Furthermore, brands are also diversifying packaging sizes, ranging from single-use sachets to large family-sized bottles. Cosmetic brands therefore, utilize contract manufacturing to achieve their aims.
Global Personal Care Contract Manufacturing Market Geographical Share
Asia-Pacific is Expected to Account for the Largest Share of the Global Market
Asia-Pacific is expected to account for nearly half of the global market and will also witness a faster CAGR of 9.2% 0ver the forecast period. Asia-Pacific is a rapidly developing region with a large and young population, representing major expansion opportunities for regional and multinational cosmetic companies.
Although the region is undergoing rapid growth, disposable incomes are relatively low and the Asia-Pacific market tends to be highly price sensitive. Therefore, major brands typically outsource production and distribution to local contract manufacturers to keep production costs low and keep their products competitive. As multinational cosmetic brands expand their presence in the region, contract manufacturers are expected to witness lucrative growth in the coming years.
Contract manufacturers are undertaking various strategies to generate more business from multinational brands. For instance, in May 2023, an International Contract Manufacturing & Private Label (CMPL) expo was held in Mumbai, India, with various local contract manufacturers pitching their capabilities to cosmetic brand representatives and industry insiders.
Personal Care Contract Manufacturing Market Companies
The major global players include A.I.G. Technologies, Inc., PLZ Corp, McBride, Formula Corp, Skinlys, Covalence Laboratories, Fareva, Albea, Tropical Products and Sarvotham Care.
COVID-19 Impact Analysis
The pandemic created opportunities as well as challenges for the global market. With shutdown of physical stores, many cosmetic brands adopted e-commerce to continue operations. Although demand for essential skin and haircare products remained relatively unchanged, contract manufacturers struggled to increase output due to supply chain bottlenecks and movement restrictions.
Furthermore, due to reduced consumer spending in wake of the economic uncertainty brought on by the pandemic, many cosmetic brands refocused their operations. Many single brand contract manufacturers were forced into bankruptcy. The post-pandemic period has witnessed a relatively healthy rebound for the global market.
AI Impact Analysis
Artificial intelligence (AI) is expected to have significant impact on the global market. With increasing levels of automation, contract manufacturers can significantly upscale production and carry out tasks such as dispensing, packaging and labeling without any human intervention. Increasing automation levels will be highly beneficial for market growth.
Another aspect where AI-based technologies can impact the market is in quality control processes. Sophisticated AI algorithms can be utilized by manufacturers to analyze manufactured cosmetic formulations to ensure the maintenance of quality standards. Inclusion of AI will help improve quality control and will generate more business for contract manufacturers from cosmetic brands.
Russia- Ukraine War Impact Analysis
The Russia-Ukraine conflict has mainly affected both the countries at war, rather than the global market at large. Ukrainian cosmetics demand witnessed a dramatic decline and the destruction of Ukraine’s industrial infrastructure over the course of the war has completely crippled personal care contracting manufacturing in the country.
The Russian market is also facing various challenges, particularly due to sanctions imposed upon it by Western countries. Many western cosmetic brands have exited the Russian market due to the sanctions. However, under new legislative changes, the Russian government has allowed them to continue operations without paying royalties for using trademarks of cosmetic brands.
By Formulation
- Liquids
- Creams
- Lotions
- Oils
- Gels
- Others
By Service
- R&D and Formulation
- Manufacturing
- Packaging & Allied Services
By Application
- Skincare
- Haircare
- Color Cosmetics
- Fragrances & Deodorants
- Others
By Region
- North America
- U.S.
- Canada
- Mexico
- Europe
- Germany
- UK
- France
- Italy
- Russia
- Rest of Europe
- South America
- Brazil
- Argentina
- Rest of South America
- Asia-Pacific
- China
- India
- Japan
- Australia
- Rest of Asia-Pacific
- Middle East and Africa
Key Developments
- In October 2022, Bryhel Cosmetic Labs, an Israeli contract cosmetics manufacturer, announced plans to launch its operations in the U.S. market. The company announced plans to open a new facility in Miami, Florida, U.S.
- In November 2022, the U.S.-based contract manufacturer Dynamic Blending announced the expansion of its production facility in Vineyard, Utah, U.S.
- In June 2023, Jotim Daily Chemical, a Chinese contract cosmetic manufacturer, started construction of a new factory in Hangzhou, China.
Why Purchase the Report?
- To visualize the global personal care contract manufacturing market segmentation based on formulation, service, application and region, as well as understand key commercial assets and players.
- Identify commercial opportunities by analyzing trends and co-development.
- Excel data sheet with numerous data points of personal care contract manufacturing market-level with all segments.
- PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
- Product mapping available as Excel consisting of key products of all the major players.
The global personal care contract manufacturing market report would provide approximately 57 tables, 62 figures and 190 Pages.
Target Audience 2023
- Cosmetic Companies
- Industry Investors/Investment Bankers
- Research Professionals
- Emerging Companies
