100 Common Industry Terms and Definitions in Contract Packaging and Contract Manufacturing
3PL / Logistics
Third-Party Logistics providers are companies that offer outsourced logistics and supply chain management services, including transportation, warehousing, and inventory management.
A substance that can cause an allergic reaction in some individuals. In the context of food packaging, allergens are often highlighted on the label to inform consumers.
Aseptic beverage production
A process in which beverages are sterilized and packaged in a sterile environment to prevent contamination and ensure longer shelf life without the need for preservatives.
A method of dispensing dry, powdered, or granular products into packaging using an auger, which is a rotating screw-like device.
A packaging process that involves placing products into bags or pouches and sealing them.
A type of packaging that uses a pre-formed plastic cavity to hold a product, which is then sealed with a paper or plastic backing.
The process of filling and sealing liquid products into bottles.
The practice of grouping multiple products together in a single package, often for promotional purposes.
Compound Annual Growth Rate is the rate at which an investment or business grows over a specified period, assuming that growth compounds year-over-year.
A preservation method that involves sealing food in airtight containers, usually cans, and then heating them to kill bacteria and extend shelf life.
Capital Expenditure is the money spent on acquiring, maintaining, or improving fixed assets such as buildings, equipment, or land.
A machine used in the packaging industry to form and fill cartons with products.
The process of placing products into cartons and sealing them.
The process of placing filled primary packages, such as cartons or bottles, into larger secondary packages or cases for shipping and distribution.
Chain of Custody
A system of documentation that tracks the handling and ownership of a product from its origin to its final destination, ensuring traceability and authenticity.
The percentage of customer volume that needs to be replaced each year as projects conclude or customers depart, is normally expressed as percent of overall business volume.
An economic model that aims to minimize waste and resource consumption by reusing, recycling, and regenerating materials in a closed loop.
A type of packaging made from a single piece of plastic that folds in half, creating a hinge and a secure closure, often used for retail products.
Club Store Packs
Large, multi-unit packaging designed for sale in warehouse club stores, where items are typically sold in bulk.
Collaborative robots, or cobots, are a type of robotic technology designed to work alongside human workers in various industrial and manufacturing settings. They are typically equipped with advanced sensors and safety features that allow them to interact with people and share the same workspace without the need for physical barriers.
A field of robotics that focuses on the development and application of collaborative robots, or cobots, which are designed to work alongside human workers in various industrial and manufacturing settings.
A kitchen specifically designed and equipped for large-scale food production, meeting the regulations and requirements for commercial foodservice operations.
The process of bringing a new product or service to market, from concept development to production, marketing, and distribution.
An assessment conducted to ensure that a company or product meets relevant standards, regulations, or best practices.
Packaging made from materials that can break down into natural components in a composting environment, reducing waste and environmental impact.
Contract manufacturing is an arrangement in which one company outsources the production of its products to another company, often to reduce costs or access specialized expertise.
Contract packaging is a service provided by a third party that packages products on behalf of another company, often to meet specific requirements or reduce costs.
Corporate Social Responsibility:
A company’s commitment to conducting business ethically, sustainably, and in a way that positively impacts society, the environment, and stakeholders.
Consumer Packaged Goods are items that are used daily by consumers and require regular replacement, such as food, beverages, and personal care products.
A warehouse or facility where products are stored, organized, and shipped to retailers or end customers.
Refers to the process and channels through which finished products are transported from a manufacturer or distribution center to retailers or end customers. This can include various intermediaries such as wholesalers, retailers, and e-commerce platforms.
Earnings Before Interest, Taxes, Depreciation, and Amortization is a financial metric used to evaluate a company’s operating performance, excluding non-operating factors such as interest, taxes, and depreciation.
A relatively new brand in the market that has shown potential for growth and is gaining consumer recognition and market share.
End-of-Aisle Display Building
The creation and placement of promotional displays at the end of retail store aisles, designed to catch the attention of shoppers and promote specific products.
Enterprise Resource Planning (ERP) system is a software solution that integrates and automates core business processes, such as finance, supply chain, procurement, manufacturing, and human resources, to streamline operations and provide real-time data and insights for better decision-making.
A business practice that involves ensuring the materials and services used in a company’s supply chain are obtained in a responsible and sustainable manner, respecting human rights, fair labor practices, and environmental standards.
A type of packaging made from pliable materials, such as plastic, paper, or foil, that can be easily molded or shaped to fit a product. Examples include pouches, bags, and shrink wrap.
A packaging process that involves wrapping a continuous sheet of film around a product, sealing it on both ends and creating a flexible, tight-fitting package.
Fast-Moving Consumer Goods are products that are sold quickly and at relatively low cost, such as food, beverages, toiletries, and other household items.
FSMA (Food Safety Modernization Act)
A United States law enacted in 2011 that aims to improve food safety by focusing on prevention and risk-based controls throughout the food supply chain.
Fully Landed Cost
The total cost of a product, including manufacturing, transportation, taxes, duties, and other associated expenses, when it arrives at its final destination.
A commercial kitchen that prepares and cooks food exclusively for delivery, without a traditional dine-in restaurant component.
A distribution channel consisting of grocery stores and supermarkets that primarily sell food and household items.
Hazard Analysis and Critical Control Points is a systematic and preventive approach to food safety that identifies, evaluates, and controls potential hazards at specific points in the food production and handling process. Developed to ensure the safety of food products, HACCP involves the identification of critical control points (CCPs) in the process where hazards can be eliminated, reduced, or controlled to acceptable levels. HACCP is widely recognized and used in the food industry as a key component of food safety management systems.
A machine used in the packaging process to apply heat and shrink plastic film tightly around a product, creating a secure and tamper-evident seal.
Horizontal Form Fill Seal is a type of packaging machine that forms, fills, and seals packages horizontally, often used for products like granola bars, cookies, and other small items.
Horizontal Pouch Packaging
A packaging method that involves forming, filling, and sealing pouches horizontally, often used for products like snacks and confectionery.
Hot fill beverage production
A process in which beverages are filled into containers at high temperatures and then cooled, helping to ensure product safety and extend shelf life without the need for preservatives.
A brand owned and marketed by a retailer, often positioned as a lower-cost alternative to national or regional brands. Also known as store brands or private labels.
Ingredients or components added to a product to enhance its texture, flavor, or appearance, such as nuts, dried fruits, or chocolate chips.
The process of assembling multiple components or products into a single package or kit, often for promotional purposes or to simplify the end-user experience.
Leadership in Energy and Environmental Design is a globally recognized green building certification system that evaluates the sustainability and environmental performance of buildings.
A production approach that combines the flexibility of custom-made products with the efficiency and cost benefits of mass production, enabling customers to personalize their products without significant delays or increased costs.
Established brands with a long history in the market, often characterized by stable or declining sales and a strong, loyal customer base.
Minority Business Enterprise is a certification given to businesses that are at least 51% owned, operated, and controlled by a minority group member or members.
A brand that is widely distributed and recognized across a country or region, often supported by extensive marketing and advertising efforts
Products derived from food sources with additional health benefits beyond basic nutritional value, including dietary supplements, functional foods, and fortified beverages.
Continued: 100 Industry Terms and Definitions in Contract Packaging and Contract Manufacturing
A retail strategy that integrates multiple sales and marketing channels, such as brick-and-mortar stores, e-commerce platforms, and social media, to provide a seamless and consistent customer experience.
In the context of food and agriculture, refers to products that are grown, processed, and handled without the use of synthetic chemicals, genetically modified organisms, or irradiation.
A company’s growth that results from internal business activities, such as increasing sales, improving operations, or expanding product offerings, rather than through mergers, acquisitions, or external investments.
Over-the-counter pharmaceutical products are medications that can be purchased without a prescription, such as pain relievers, cold remedies, and allergy medications.
A packaging process that involves applying a protective outer layer of film or paper around a product or package, often used for hygiene, tamper-evidence, or marketing purposes.
PET beverage production
Polyethylene Terephthalate (PET) is a type of plastic used for producing beverage bottles and containers, known for its strength, lightweight properties, and recyclability.
POP Point of Purchase Displays
Promotional displays placed in retail stores, often near the checkout area, designed to catch the attention of shoppers and encourage impulse purchases.
A supply chain strategy that involves delaying certain activities, such as packaging, labeling, or final assembly, until customer orders are received, allowing for greater customization and reduced inventory carrying costs.
A packaging process that involves filling and sealing products into pouches or bags, often used for flexible packaging applications.
The packaging material that directly contacts and contains the product, such as bottles, cans, or bags, designed to protect and preserve the product during storage, transportation, and use.
Private equity is a type of investment capital provided by firms or funds that invest in private companies, often with the goal of improving operations, expanding market share, or facilitating an exit strategy such as a merger, acquisition, or public offering.
A brand owned and marketed by a retailer or distributor, often positioned as a lower-cost alternative to national or regional brands. Also known as store brands or house brands.
An initial model or sample of a product or packaging, created to test and evaluate its design, functionality, and feasibility before moving to full-scale production.
A packaging design that features a range of colors, often used to differentiate product variants, flavors, or sizes within a product line.
A brand that has a strong presence and customer base within a specific geographic area, often appealing to local tastes, preferences, or cultural factors.
A type of packaging made from materials that maintain their shape and structure, such as glass, metal, or hard plastic. Examples include bottles, cans, and boxes.
Robotics as a Service (RAAS)
A business model that offers robotics solutions, such as automation equipment or software, on a subscription or usage-based pricing model, allowing companies to access advanced technology without significant upfront investment.
A type of packaging that involves filling and sealing small, single-use pouches or packets made from flexible materials, such as plastic, foil, or paper. Sachet packaging is commonly used for portion control, product sampling, and convenience, and can contain a variety of products, including powders, liquids, gels, or granules. Examples of sachet-packaged products include condiments, personal care items, and pharmaceuticals.
The packaging material that surrounds the primary packaging, such as cartons, boxes, or trays, designed to protect and group products for shipping, handling, and display.
Packaging designed to be easily placed on retail store shelves with minimal setup or additional materials, often featuring perforated or tear-away sections for easy access to the product.
SQF (Safe Quality Food)
A comprehensive food safety and quality management certification system that covers all aspects of the food supply chain, from farm to fork, ensuring that products meet rigorous standards for safety, quality, and traceability.
Stand-Up Resealable Pouch
A flexible packaging solution that allows a pouch to stand upright on its base, featuring a resealable closure, such as a zipper or a press-to-close seal, to maintain product freshness after opening.
Stick Pack Packaging
A slender, tube-like pouch used for single servings or small quantities of powder, granules, or liquid products, often used for dietary supplements, drink mixes, and condiments.
A brand owned and marketed by a retailer, often positioned as a lower-cost alternative to national or regional brands. Also known as house brands or private labels.
SURP (stand-up resealable pouch)
A flexible packaging solution that allows a pouch to stand upright on its base, featuring a resealable closure, such as a zipper or a press-to-close seal, to maintain product freshness after opening. This type of packaging is often used for food products, pet food, and other consumer goods.
A set of practices and processes aimed at minimizing the environmental impact of manufacturing activities, such as reducing energy consumption, waste generation, and emissions, while also considering social and economic factors.
A fee charged by a contract manufacturer or service provider for processing, packaging, or handling a company’s products or materials, often based on the quantity or volume processed.
The practice of openly sharing information about a company’s operations, supply chain, and business practices with stakeholders, such as customers, investors, and regulators, to build trust and demonstrate accountability.
Universal Product Code (UPC)
A standardized barcode system used to identify and track products in retail and distribution settings, consisting of a unique 12-digit number and a corresponding barcode symbol.
Vertical Pouch Packaging
A packaging method that involves forming, filling, and sealing pouches vertically, often used for products like liquids, powders, or granular materials.
Vertical Form Fill Seal is a type of packaging machine that forms, fills, and seals packages vertically, often used for products like snack foods, pet food, and granular products.
Women and Minority Business Enterprise is a certification given to businesses that are at least 51% owned, operated, and controlled by women or minority group members.
Warehouse Management System is a software solution that helps manage and optimize the operations of a warehouse or distribution center, including inventory tracking, order processing, picking and packing, shipping, and labor management.
A waste management goal or strategy that aims to divert all waste generated by a facility or operation from landfills, through means such as recycling, composting, or energy recovery.