79% of US Manufacturers Say Labor Is Their #1 Problem.

Your Packaging Line Is Probably the Bottleneck.

The Hidden Cost of Your Labor Crisis

Ask a food and beverage COO what keeps them up at night in 2026, and you’ll hear the same answer across almost every operation: we can’t find people.

It’s not a perception problem. It’s a measurable, structural shift in American manufacturing, and it’s hitting F&B harder than most sectors because of what production lines require: consistent hands-on operators across packaging, palletizing, case packing, labeling, and line changeovers. You can’t outsource that work to AI. You can’t offshore it quickly. And you can’t replace it by posting more job listings.

But here’s what most F&B operations leaders are missing: the bottleneck usually isn’t your mixing line, your processing equipment, or your quality lab. It’s your packaging line. It’s the end-of-line operations that rely most heavily on the workers you can’t find — and it’s where every unfilled shift directly translates into unshipped product.

 

What the Numbers Actually Say

Let’s start with what’s verifiable. The data from late 2025 and early 2026 paints a consistent picture:

 

79% of manufacturing executives cite skilled labor shortage as their single greatest challenge (CADDi / SME, Jan 2026)

90% say manufacturing departments are the most affected by the labor shortage — operations takes the biggest hit

 

415K open manufacturing jobs in the US as of late 2025 (BLS data, January 2026)

69% of manufacturers are investing in robots, equipment, and hardware to fill the workforce gap — up 9% year-over-year

 

The story these numbers tell isn’t that manufacturing is growing. It’s that manufacturing is structurally short on workers — and the companies still trying to solve it by hiring harder are falling behind the ones solving it by restructuring the work itself.

 

Why Your Packaging Line Is Probably the Bottleneck

In most F&B operations, production is the glamorous part. It’s where recipe science, ingredient sourcing, and process engineering get all the attention. Packaging, by contrast, is treated as the back end — necessary but not strategic.

That’s exactly why it’s where your labor problem is hitting hardest.

Packaging operations tend to be the most labor-intensive part of an F&B plant. Case packing, hand-filling for small runs, manual labeling, variety pack assembly, POP display builds, shrink wrapping, palletizing, and inspection all require steady operator availability. When your production line can run semi-automated but your packaging line requires 8–12 people per shift, labor gaps at end-of-line become the choke point for your entire operation.

Here’s what that looks like in practice:

• You run production but can’t ship because packaging is three shifts behind on case packing.
• You turn down a promotional order from a retailer because you can’t staff up for the variety pack assembly.
• You miss a ship window on a seasonal product because your usual temp labor source couldn’t fill the request.
• You run your expensive production line at 60% capacity because the packaging line can’t keep up with its output.
• You quietly drop SKUs because the labor intensity of their packaging format isn’t worth the margin.

None of these show up as “labor shortage” on your P&L. They show up as lost revenue, missed customer commitments, underutilized capacity, and quiet strategic retreats from markets you should be winning.

 

Why This Is Worse for Food & Beverage Specifically

F&B operations face a compounding version of the labor problem that most other manufacturing sectors don’t:

1. Hygiene and Safety Compliance

F&B packaging isn’t just packaging. It’s packaging under USDA, FDA, and SQF-level standards. That raises the bar on who can even work on your line. Temp agencies that supply warehousing labor often can’t supply properly trained food-handling labor. The pool of qualified workers is smaller than the pool of warehouse workers — and shrinking faster.

2. Seasonal and Promotional Spikes

F&B demand isn’t flat. Holiday packs, summer promotions, private-label retail programs, and co-manufactured launches create spikes that require temporary labor surges. But the labor market that used to absorb those spikes — via staffing agencies, seasonal workers, retiree labor pools — has contracted sharply. You can’t plan a variety pack promotion around staffing you can’t secure.

3. Format Complexity

F&B packaging formats are more varied than most sectors: pouches, cartons, bottles, cans, cups, shrink sleeves, club packs, multi-packs, variety packs, display-ready cases, subscription boxes. Each format requires different equipment and different operator skill sets. When you’re short on labor, you typically can’t flex operators across formats the way a simpler operation might.

4. Margin Pressure

F&B margins are thin and getting thinner. Tariffs, ingredient inflation, and freight cost volatility have compressed operating margins across the category. Labor is the largest variable cost on most packaging lines. When labor gets more expensive and less available simultaneously, packaging line economics fundamentally change.

 

Three Ways to Break the Bottleneck

F&B operations leaders generally have three strategic options for solving the packaging labor crisis. Most companies default to the first, struggle with the second, and ignore the third — which is often the fastest path to relief.

Option 1: Hire Harder

This is the path of least resistance: recruit harder, pay more, retain better, improve culture. All of these are worth doing — but they’re also what every other manufacturer is doing, and the data shows it’s not working. With 415,000 open manufacturing jobs and a shrinking pool of qualified applicants, you’re competing for a labor supply that doesn’t exist at the volume needed. Wage inflation alone won’t solve a structural supply problem.

Option 2: Automate In-House

Bring in packaging automation — case erectors, case sealers, palletizers, shrink wrappers, stretch wrappers, labelers, cartoners, form-fill-seal equipment. This is what 69% of manufacturers are doing in 2026, and it works. But it comes with real friction:

• Capital expense: A single automated line can run hundreds of thousands to millions of dollars, depending on throughput and complexity.
• Equipment lead times: New packaging equipment currently has lead times of 6–18 months in many categories. You can’t automate your way out of a crisis that’s happening right now if your equipment arrives next year.
• Integration expertise: Buying the equipment is the easy part. Integrating it into an existing line, training operators, managing spare parts, and maintaining uptime all require specialized skills that many F&B plants don’t have in-house.
• Underutilization risk: If you buy equipment for a peak season and run it at 40% capacity the rest of the year, your ROI math gets ugly fast.

Option 3: Outsource the Bottleneck

The option most F&B operations leaders under-consider: outsource the labor-intensive parts of packaging to a contract packaging (co-packing) partner. The contract packaging market has grown from approximately $96.89 billion in 2025 and is projected to reach $213.09 billion by 2035 — an 8.2% compound annual growth rate. That growth isn’t happening because co-packing is trendy. It’s happening because it solves exactly this problem.

When you outsource packaging to a co-packer, you’re converting a variable labor problem into a fixed-cost service contract. You’re also offloading the equipment investment, the training burden, the quality certifications, and the seasonal staffing headaches to a partner whose core competency is exactly that.

 

What to Look For in a Food & Beverage Co-Packing Partner

Not all co-packers are equal. For F&B operations specifically, a serious partner should check these boxes:

THE CO-PACKER EVALUATION CHECKLIST Food-grade certifications: USDA, SQF, FDA, and ISO 9001:2015 as minimum credentials Capability breadth: Labeling, ink-jetting, pouch filling, tray and case packing, overwrapping, shrink wrapping, club and variety packs, POP display builds, subscription kitting, light assembly Real-time inventory visibility: A customer portal that lets you see inventory, throughput, and order status 24/7 — not monthly reports after the fact Integrated materials management: A partner that can manage inventory of both your product and the packaging materials, forecast raw material needs, and handle procurement alongside packaging execution Equipment modernization: A partner who invests in the newest packaging equipment (not decade-old machinery) gets you better throughput and pricing than one operating on aging assets Material sourcing integration: A co-packer who also sources the packaging materials themselves is more cost-effective than one who requires you to ship materials to them from a separate supplier

 

The Smart Move: A Hybrid Strategy

The F&B operations teams winning the labor battle in 2026 aren’t picking one option — they’re combining all three strategically:

1. Keep core production in-house for standard SKUs with stable demand — where existing line economics work and automation investments have clear ROI.
2. Selectively automate the highest-impact stations on in-house lines (palletizers, case sealers, labelers) where labor reduction ROI is strongest and where loaner programs or financing can bridge equipment lead times.
3. Outsource the labor-intensive, low-automation-ROI work — seasonal packs, variety packs, promotional displays, subscription kitting, private label runs, new product launches, club packs — to a co-packing partner.

This hybrid strategy lets you protect your core operation, free up your in-house team to focus on what they do best, and eliminate the packaging bottlenecks that are actually costing you revenue.

It also gives you something else that’s increasingly valuable: optionality. When a retailer asks for a promotional variety pack with a 6-week turnaround, you don’t have to say no because your line can’t staff it. When a new SKU launch hits, you don’t have to choose between canceling an existing run and disappointing a new retailer. The flexibility a co-packing partner provides is worth more than just the labor cost savings.

 

What This Looks Like in Practice

Consider a mid-size F&B company — say, $90M in revenue, roughly 120 employees across one manufacturing facility in the Midwest. They produce a core line of shelf-stable products with steady demand, plus seasonal promotional items and occasional private-label runs for retailers.

In 2025, they were running short-staffed on their packaging line roughly 40% of the time. The impact showed up quietly:

• They declined three retailer promotional programs in one year because they couldn’t staff up the variety pack assembly.
• They ran their main production line at about 65% capacity because packaging couldn’t keep up — even though production equipment had capacity available.
• They paid $180,000 in overtime and temp labor premiums to catch up on packaging backlogs during peak weeks.
• They quietly dropped two SKUs because the packaging format was too labor-intensive to make the margin work.

In 2026, they moved to a hybrid model. Core SKUs stay in-house, with selective automation upgrades (a new case sealer and palletizer, funded through an OpEx lease to avoid capital expense). Variety packs, promotional runs, subscription kitting, and private-label work all move to a co-packing partner. The core line now runs at 85% capacity because packaging isn’t the bottleneck. Overtime costs dropped. They took on two new retailer programs. And the SKUs they’d dropped came back — through the co-packer.

The total economic impact was well into seven figures, with most of it coming not from labor cost reduction but from revenue they were previously leaving on the table.

 

How Korpack Solves This

Korpack was built for exactly this moment. Founded by a packaging engineer and headquartered in Bloomingdale, Illinois, Korpack operates as a single-source partner for North American food and beverage companies that need to solve the packaging labor bottleneck without picking a single solution and hoping it works.

Here’s how Korpack’s capabilities map to each option in the hybrid strategy:

 

CONTRACT PACKAGING (CO-PACKING) Korpack’s contract packaging operation is USDA, SQF, FDA, and ISO 9001:2015 certified — the credentials F&B brands need to trust a partner with their product. Services cover the full labor-intensive spectrum: Labeling and ink-jetting Pouch and carton filling Tray and case packing Overwrapping and shrink wrapping Club packs, variety packs, combo pack-outs, and POP display builds Subscription box kitting, fulfillment, and light assembly Because Korpack also supplies the packaging materials themselves, you’re not coordinating across multiple vendors — one partner handles the materials, the labor, and the equipment.

 

AUTOMATION EQUIPMENT, PARTS & SERVICE For the in-house stations where automation makes sense, Korpack sells, services, and supports middle and end-of-line packaging machinery: Pouch filling and sealing, vertical and horizontal form-fill-seal (VFFS/HFFS) Cartoners, case erectors, case sealers, and case packers Shrink and flow wrappers, label applicators, ink jetters and coders Check weighers, X-ray machines, dimensioners Tier and robotic palletizers, strapping and bundling equipment, semi and auto stretch wrappers Three capabilities specifically matter for the lead-time and capital-expense problems: Loaner program: Bridges long lead times on new equipment purchases, so you can capture business now instead of waiting 12 months. Financing options: Convert capital purchases into OpEx leases to protect cash flow. Supply-contract subsidies: Korpack will subsidize part or all of the cost of machinery when tied to a supply contract — aligning the partner’s incentives with yours.

 

SUPPORTING INFRASTRUCTURE The parts of the operation that don’t show up on a line diagram but make the whole thing work: Vendor Managed Inventory (VMI): Packaging materials held for up to 90 days at no cost, with algorithmic min-stock-level recalculation — you never run out, and you free up warehouse space for finished goods. 3PL and warehousing: Nearly 200,000 square feet of Chicagoland warehouse capacity, with partner facilities across North America for continental reach. Real-time customer portal: 24/7 visibility into inventory, throughput, and order status — not monthly reports after the fact. Plant Audit Reviews (PAR): An engineering assessment that identifies where you’re over-specified, where throughput could improve, and where labor hours can be reclaimed — before you commit to any capital investment.

 

The advantage isn’t any single capability. It’s that they work together under one partner. When Korpack supplies your packaging materials, runs your co-packing operation, services your in-house equipment, and tracks inventory across all of it in one ERP, the labor problem stops being five separate fires. It becomes one integrated solution.

 

The Bottom Line

The labor shortage isn’t a hiring problem. It’s a structural shift in American manufacturing that requires structural solutions. For F&B companies, that almost always means rethinking how packaging gets done — because packaging is where the labor bottleneck is most acute and where the revenue cost of that bottleneck is highest.

You can hire harder. You can automate in-house. You can outsource to a co-packing partner. The companies that pick one are falling behind. The companies that strategically combine all three — keeping core production in-house, automating the highest-ROI stations, and outsourcing the labor-intensive work — are the ones turning the labor crisis into an operational advantage.

The question isn’t whether your operation has a labor problem. Every F&B operation does. The question is whether your packaging line is the bottleneck that’s limiting the rest of your operation — and what you’re willing to do about it.

 

IS YOUR PACKAGING LINE THE BOTTLENECK? Korpack offers USDA, SQF, FDA, and ISO 9001:2015-certified contract packaging services — plus new-generation automation equipment, integrated material sourcing, and real-time inventory visibility. Whether you need to offload seasonal work, scale a promotional program, or free up in-house capacity, we can help you turn your labor problem into an operational advantage. Schedule a consultation: 630.213.3600  |  korpack.com