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The global personal care contract manufacturing market size is projected to be worth USD 37.11 billion by 2030, progressing at a CAGR of 8.1% from 2022 to 2030. The growing demand for personal care and cosmetic products from consumers, on account of the various skin and health benefits they offer, has resulted in a steady increase in research and production capabilities by manufacturers. This is expected to be a significant factor driving the growth of the contract manufacturing industry in this area. Companies are shifting towards R&D as well as other types of promotional activities from in-house production, which is expected to boost the contract manufacturing of such products in the coming years.
Personal care contract manufacturing involves the outsourcing of a segment of production activities, such as packaging operations or manufacturing of products, among others. This aids companies in the cosmetics and personal care space to remove obstacles such as costly in-house production as well as manufacturing facility operations. There has been a steady rise in demand for organic and natural products by consumers, on account of the widely-acknowledged harms of their synthetic counterparts, which is expected to force a shift towards novel products and portfolios by manufacturers. Many of these personal care products are part of fast-moving consumer goods, which witness high sales, especially in rapidly developing economies such as India, China, and Brazil. As such, the industry is expected to expand on a substantial scale through 2030.
Consumers are steadily moving towards trends that constitute personalized shopping experiences, increased transparency when it comes to packaging, and improved digital disclosure. This again is expected to positively impact the growth of the PCCM industry during the forecast period. Manufacturers, on their part, are trying to ensure that their products are innovative and effective while being available on a wide scale. With more and more commercialization options for personal care items being explored via branding and marketing, it is expected that the demand for contract manufacturers should witness healthy growth in the near future.
The COVID-19 pandemic led to a significant impact on the personal care industry, as there was a substantial decline in revenue in the first half of 2020, as supply chain issues and lockdown restrictions, along with restrictive spending, led to a noticeable drop in demand for these products. While sales of products through offline channels dropped during this period, there has been healthy growth in the use of online channels for buying products, which has helped in keeping the market steady during the pandemic phase. Another aspect that has helped in advancing the industry is the rising awareness regarding personal hygiene products. Governments across the globe have undertaken initiatives to propagate the benefits of these products to the public, which has driven their demand, and thus production. This is another factor aiding the growth of the personal care contract manufacturing market.
Research Support Specialist, USA