Personal care contract manufacturing market is anticipated to grow at a CAGR of 12.4% during the forecast period (2024-2031). The increasing demand for personal care products driven by growing urbanization, health and wellness trends, and customization has driven the growth of the global personal care contract manufacturing market. Contract manufacturers are meeting the demand with sustainable practices, product safety, and efficacy. E-commerce has broadened market reach, requiring efficient manufacturing and distribution. These manufacturers offer cost benefits and flexibility, enabling brands to focus on core strengths. Globalization and health-conscious consumers have boosted the need for personalized products. Strategic and technological partnerships are crucial for innovation and advanced manufacturing.

Market Dynamics

Technological Advancements and Innovation

Contract manufacturers have invested significant investments in research and development to maintain the leading edge of trends and produce innovative products that appeal to modern consumers which propel market growth. For instance, in April 2024, Federal Package expanded its manufacturing capabilities with the launch of FP Labs. The company offers a complete solution for beauty brands of all sizes, covering all aspects of contract manufacturing, from packaging to formulation. To support product innovation, manufacturing, supply chain support, claims, compliance, regulatory education, sustainability, and product optimization, FP Labs aims to develop through a fully integrated, agile strategic partner. 

Customization and Personalization

The increasing demand for personalized personal care products is boosting the demand for flexible manufacturing solutions, with contract manufacturers offering the ability to produce customized products. For instance, in July 2022, PolarSeal partnered with the global femcare and personal care market to offer innovative solutions for manufacturing, printing, and pouching feminine and personal hygiene products, reducing waste and environmental impact, and ensuring high volume, quality, and cost-effective production.

Market Segmentation

• Based on product type, the market is segmented into skincare, hair care, make-up & cosmetics, and others (fragrances, and bath and shower products).

• Based on service type, the market is segmented into R&D and formulation, manufacturing, and packaging & allied services.

Skin Care Holds a Considerable Market Share

Modern skincare product production technologies, including innovative testing models, are essential for verifying the effectiveness and safety of new ingredients, boosting consumer trust. This factor is a key contributor to the growth of this market segment. For instance, in September 2023, BASF Personal Care introduced a new cosmetic ingredient, 'Epispot', which has been tested on an advanced ex vivo 3D model to understand its effect on skin oiliness. The product, an extract of Epilobium angustifolium, is sourced responsibly and is suitable for various applications, including face care. The study used a sophisticated model of the pilosebaceous unit to visualize its functioning. 

R&D and Formulation Holds a Considerable Market Share

The demand for innovative and customized products is increasing, leading to the need for contract manufacturers to provide formulation development and customization services. For instance, in July 2024, Biotech firm Debut launched BiotechXBeautyLabs, a division focused on formulation development and contract manufacturing for white-label products and custom formulations. The division offers end-to-end services, including ingredient discovery, pre-clinical testing, and formulation development. 

Regional Outlook

The global personal care contract manufacturing market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America). 

Market Expansion and Consumer Trends In the North America Region

The global market for green and sustainable personal care products is expanding owing to consumer preferences and regulatory changes, requiring contract manufacturers to develop new formulations. For instance, in September 2022, BASF partnered with RiKarbon to develop green emollients from bio-waste for personal care formulations. The partnership builds on RiKarbon's successful R&D work, which aims to scale up RiKarbon's technology and drive innovation in the personal care market. The technology aims to produce clear, odorless emollients with soft, silky sensory properties.

Personal Care Contract Manufacturing Market Growth by Region 2024-2031

Asia-Pacific Holds Major Market Share

India's urban population is expected to drive a significant increase in the consumer base for personal care products, developing new opportunities for brands and contract manufacturers to cater to diverse consumer needs. According to the World Bank Org., in January 2024, India’s rapid urbanization means that by 2036, its urban population reach 600 million, or 40.0% of the total population, compared to 31.0% in 2011, with urban areas contributing nearly 70.0% to GDP. Managing this transformation effectively is crucial for India's goal of becoming a developed country by 2047, its 100th year of independence. Building the necessary infrastructure to create livable, climate-resilient, and inclusive cities will require significant investment, as almost 70.0% of the needed urban infrastructure is yet to be constructed. India needs to invest $840.0 billion in infrastructure by 2036, averaging $55.0 billion or 1.2% of GDP annually.?

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the personal care contract manufacturing market include A.I.G. Technologies, Inc., Albéa Services S.A.S., Cosmax Inc., McBride plc, and Voyant Beauty, among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers and acquisitions to stay competitive in the market. For instance, in April 2024. Cipla Health Ltd. acquired Ivia Beaute Pvt Ltd., acquiring the global distribution and marketing of Ivia's renowned brands Astaberry, Ikin, and Bhimsaini. Further, in November 2023, Reliance Retail acquired Sephora India rights, allowing the beauty retailer to expand into the growing market through Reliance Beauty & Personal Care Ltd.

The Report Covers-

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global personal care contract manufacturing market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.