Hi, I'm Liz Cuneo, Editor-in-Chief of Healthcare Packaging. I'm here with my colleague, Joseph Derr, editor of the Contract Manufacturing and Packaging supplement to Packaging World. Today we're going to discuss the results of our reader survey and give a sneak peek into contract manufacturing and packaging trends for the year. The full report is available at the short link you see on your screen now, and all of the links should be available on whatever channel you're viewing this through—whether it's our website, LinkedIn, YouTube, and so on.
Be sure to click that link to access the full report. Today, we want to give you a quick taste of some of the key results, and that's why I'm here with Joe, who wrote the 2026 Contract Manufacturing and Packaging Survey based on input from our readers. Hey Joe, thanks for joining me today.
Great to see you, Liz. I know our worlds don't often overlap, but here we are. Great to see you as well. Yeah, thank you. It's very exciting.
So Joe, maybe you could first tell us about the annual outlook report for contract manufacturing and packaging and why you did it.
Happy to do so, Liz. Packaging World conducted a benchmark study in 2025 of major trends in external manufacturing. This year, we came back with the same questions so we could do a year-over-year comparison and see what the contracting outlook for 2026 looks like. We surveyed a new group—a cross-section of Packaging World readers who are brand CPGs. These are the folks who told us they regularly work with external manufacturing partners. So we're talking about brands that outsource to contract manufacturers and contract packaging companies to get their products made or packaged.
That sounds interesting. So why don't you give us the big picture? What would you say is the defining theme of this year's outlook for external manufacturing?
I would say the defining theme—and it really jumps off the page—is confidence. Brand owners who took the survey told us they are more confident than last year in their external manufacturing partnerships. They know what they want, they know why they're outsourcing, and they're moving decisively. What we're also seeing from these results is that the mood of uncertainty lingering from the pandemic era is really starting to fade. It's evaporating.
That's a strong statement. What does your data actually show in terms of how brands are using contract services right now?
Among brands actively using contract services, the distribution of outsourcing levels is really interesting. About 25% of respondents don't outsource at all—these are brands handling everything in-house. Then there's another quarter outsourcing between 10% and 24% of their operations. The bulk of brands are allocating between 1% and 49% of their business to contract partners. That suggests light to moderate outsourcing is most common. Heavy dependence is rare—only about 3% of respondents are contracting out 79% to 89% of their business.
So if I'm hearing you correctly, brands are maintaining meaningful relationships with contract partners, but not handing over the entire operation.
Exactly. That seems to be the case. One particularly notable finding is that 21% of respondents identified as brand owners with no manufacturing or packaging facilities at all. These are pure-play brands that rely entirely on external partnerships to get their products on shelves. That tells you how important external manufacturing has become. In 2026, you don’t necessarily need to own a facility to compete as a CPG brand anymore.
That’s really interesting—and not something I would have thought of. So these companies have built their entire business model around contract relationships.
That’s right. Across snack foods, pet foods, beverages, and other CPG categories, external manufacturing models are finding success. The universe of companies using contract manufacturing is very broad today. I’d also add that CDMOs and CMOs in pharma and medical packaging, as well as providers in personal care and chemicals, are experiencing similar shifts, though this survey focused on key CPG sectors.
So that kind of leads into my next question—who is responding to this survey? Can you give a sense of the audience?
Our respondents are brand owner representatives—people from CPG companies across snack foods, proteins, pet foods, beverages, and other consumer packaged goods sectors. We’re hearing directly from the brand side, meaning the buyers of contract services. Even though the sample size is somewhat small, it provides valuable insight into what’s driving their decisions and where partnerships are working—or not.
That’s an important distinction. You’re not just hearing from co-manufacturers and co-packers—you’re hearing from their clients.
Exactly. That’s what makes the report so valuable. It’s useful both for brands evaluating their strategies and for contract manufacturers trying to understand their customers.
Let’s talk about where things are headed. What did brand owners tell you about their outsourcing plans for the near future?
This is where it gets really interesting. Forty-two percent of brands told us they plan to increase the amount of work they outsource over the next two to three years. That’s up from 30% last year—a 12-point jump.
That’s a noticeable shift.
It really is. Another key number is uncertainty. The percentage of brands unsure about their external manufacturing plans dropped from 14% last year to just 3% this year. That tells me brands have done their homework and now have clearer expectations and strategies.
So the hesitancy is nearly gone.
I would say so. About one-third expect to keep outsourcing steady, and around 21% foresee reducing their use of contract partners. But the overwhelming story is growth and clarity.
What’s driving that increased confidence?
The fundamentals haven’t changed much. The number one reason brands turn to contract manufacturers—cited by 64% of respondents—is access to specialized machinery and packaging formats they don’t have in-house.
That makes sense given the cost of equipment.
Exactly. Whether you're a startup or a large company, investing in and maintaining capital-intensive equipment is a major commitment. Accessing that capability through a partner is often more efficient.
What else is driving outsourcing?
Customization for short runs came in at 45%, essentially steady year over year. Capacity supplementation and product testing each drew about 30%. These are important but secondary. The headline remains access to specialized capabilities.
Do you have any real-world examples from the report?
Yes—this is some of the best material. One example is Maine Love, a company producing sustainably packaged water sourced in Maine. Their CEO explained how they partner with local brewers who already have infrastructure in place. It’s a win-win—lower overhead for them and diversified revenue for the brewers. She said they couldn’t have launched without those partnerships.
That’s a great example. Any others?
Another example comes from a halal meat CPG supplying retailers like Costco and Wegmans. Their partnership goes beyond capacity—it’s about expertise, food safety, quality, and consistency that would be nearly impossible to replicate internally at launch.
So it’s not something you can just build overnight.
Exactly. What’s striking is that brands now view contract partnerships as a long-term strategy, not just a startup solution. Even if they scale, they’d still rely on partners for specialized capabilities.
That’s a strong endorsement of the model.
It is. External partnerships are becoming a core part of long-term strategy across the industry.
There must be challenges too. What do brands want to see improve?
This is where feedback gets candid. The top issue is communication and responsiveness. One brand said contract partners are great at what they do but notorious for poor communication.
That’s a serious concern.
It is. Brands want dedicated liaisons and clear production timelines. They’re asking for accountability and consistency.
What else came up?
Transparency. Brands want clearer visibility into costs, pricing changes, and quality assurance. One said they’d like the ability to inspect production lines at any time.
Sounds like they want true partnerships, not just transactions.
Exactly. They want visibility and involvement because their brand reputation is on the line.
What about operational concerns?
Flexibility came up—especially the ability to respond quickly to demand changes and handle smaller runs. Brands want that flexibility without inconsistency.
That seems especially important in food and beverage.
Very much so. One respondent said first runs are always good, but later runs can become inconsistent. That gap in quality is a major concern. Brands also expect ongoing innovation from their partners.
So ultimately, this comes down to trust.
Yes. Brands expect contract partners to match the quality of in-house manufacturing. When they do, they create significant value—and that’s what’s driving growth and confidence in the sector.
Joe, this has been a really insightful overview. It’s clear the sector is maturing, growing, and becoming more strategic. And I love that the defining theme is confidence. Thank you so much for walking us through it.
Thanks, Liz. Great questions, and thanks to everyone who joined us. Don’t forget—the full report is available at PWGO.T/9052. It includes in-depth coverage of sustainability, automation, e-commerce, and more. Don’t miss it.
Thank you.
