How Contract Packers Can Help CPG Brands Weather Tariffs and Rising Costs

As the United States has implemented tariffs across the globe, brands and consumers are feeling the pressure. Rising costs for packaging materials, shipping disruptions, and an unpredictable trade environment have forced many brands to rethink their supply chains.

CPG brands are looking for more than a co-packer – they’re looking for a strategic supply chain partner to navigate these challenges, eliminate costly steps in the process, and simplify the path to market.  

Packaging Materials & Tariffs: Hardest Hit

Tariffs on imported goods like aluminum, plastics, steel, and paperboard have made it significantly more expensive to source essential packaging components.  What’s more, much of the packaging supply chain relies on China for some of its raw material base. For brands that already operate on tight margins, these cost increases aren’t just painful—they’re unsustainable.

Worse, fluctuating trade policies and material shortages are making it harder to plan ahead. Many companies are asking: How can we protect our margins without compromising product quality or delivery timelines?

One answer: work smarter with the right contract packing partner.

How Co-Packers Are Stepping Up

Contract packers have always been valuable partners for CPG brands. But today, their role is expanding. Here’s how co-packers are helping brands stay ahead in a tough market:

1. Smarter Sourcing & Onshoring

Work with partners to localise the sourcing strategy to reduce lead times, transportation costs, and source the best materials at the best prices. Many have long-standing relationships with a diverse network of suppliers, allowing them to:

• Quickly pivot to domestic or tariff-free sources.

• Use their buying power to negotiate better material costs.

• Recommend alternative materials that meet quality standards but reduce expenses.

Real-world example:
When aluminum tariffs drove up can prices, a beverage brand worked with their co-packer to shift to U.S.-manufactured cans—securing supply and minimizing cost increases.

2. Packaging Innovation

Sometimes, the best way to manage rising material costs is to rethink the packaging itself. Many co-packers offer in-house engineering and design support, helping brands:

• Use less material without sacrificing durability.

• Switch to more affordable or sustainable alternatives.

• Streamline designs for easier, faster production.

Real-world example:
A snack brand swapped bulky rigid tubs for lightweight flexible pouches. Not only did they cut packaging costs by nearly a third—they also saved on shipping.

3. Flexibility and Scalability

Building out in-house production capacity is expensive and risky—especially when market conditions are changing fast. Co-packers offer a flexible solution:

• Scale production up or down based on demand.

• Launch new products quickly, without major capital investment.

• Adapt to new markets and new regulatory requirements on the fly.

Real-world example:
A personal care brand entering the Canadian market partnered with their co-packer to create bilingual packaging, avoiding costly delays and compliance headaches.

4. Risk Management

In today’s environment, supply chain resilience is just as important as cost control. The best co-packers offer:

• Multiple production sites for geographic flexibility.

• Backup supplier networks in case of disruptions.

• Faster turnaround when plans need to change quickly.

Real-world example:
A food brand facing unpredictable shipping delays from Asia worked with a co-packer that could produce in both the U.S. and Mexico—allowing them to shift production as needed and keep products on shelves.

The Bigger Opportunity

The smartest CPG companies aren’t just outsourcing production. They’re building true partnerships with their co-packers—working together on smarter sourcing, better packaging solutions, and stronger supply chains.

It’s not about weathering the storm; it’s about using the current challenges as a springboard for smarter, leaner operations.

In a world where cost pressures and trade uncertainty are the new normal, brands that treat their co-packers as strategic partners—not just vendors—are the ones most likely to thrive.

Final Thoughts

Tariffs and rising costs aren’t going away anytime soon. But with the right contract packing partner, CPG brands can protect their margins, strengthen their operations, and even find new opportunities to grow.