Global Luxury Packaging Market - 2021-2028
Luxury Packaging Market Overview
Nowadays, the packaging is no longer done to protect products from damage but has become an integral part of luxury brands, as it has become a classification for setting up a brand value. Luxury brand companies are investing in packaging as a plan to enhance their brand image. The global luxury packaging business is thus growing in this environment. Moreover, while designing luxury packaging, each brand adopts a unique style. This helps consumers to associate products with a particular brand. Generally utilized by high-end products, luxury packaging is used in medical, FMCG, household and healthcare products. This is increasing the growth of the global luxury packaging market.
Furthermore, luxury brands want to make sure they are hitting all the points regarding their packaging. Not only is it a consideration of the quality of their products, but it is also an ideal opportunity to promote their products as well. If a luxury company can design high-quality luxe packaging, people immediately know what the brand is; when people lead around with the box, bag, etc., their clients turn into walking publications.
The global luxury packaging market is estimated to reach US$ YY million by 2028 from the recorded market size of worth US$ YY million in 2020, growing at a CAGR of YY% during the forecast period (2021-2028).
Luxury Packaging Market Dynamics
The increasing inclination of consumers towards design and quality of packaging is triggering the demand for luxury packaging in recent times. Growing demand for eco-friendly packaging creates a strong opportunity for the luxury packaging market growth.
Increasing demand of designed and quality of packaging is expected to increase the market size
Luxury items are held to the most important standards of detail & design. The best kind of packaging is essential in the case of luxury products. Vending a product to the affluent packaging design plays a vital role as it creates desire and excitement. Luxury packaging designates the prestige & quality of the product while assuring continuity in the brand messaging that appeals to the client.
In the age of digitalism, it becomes a crucial task for brands to impact the product's physical attributes significantly, and this is where packaging design comes into play. According to Smithers Pira, the luxury packaging market projects growth of 4.39% in 2019. Luxury brands are spending great attention to this, and enormous investments have been designated to the present and parceling of luxury products.
Growing demand for eco-friendly packaging is expected to boost the market growth
The increasing concerns over the use of plastic and its environmental impacts from packaging have been trending in the cosmetics and food & beverages industry. Brands are under rising pressure from consumers & authorities to enhance the environmental profile of the packaging. As an outcome, numerous companies have started to restructure their packaging business with the 3 R'S pillars- Reuse, Reduce, Recycle.
The use of sustainable & bio-degradable packaging will act as an important driving factor for the market. The companies are gradually shifting towards sustainable development over non-biodegradable packaging materials. Customers are becoming environmentally conscious and are exploring out more sustainable lifestyle choices. Some of the recent examples include, in 2021, Estee Lauder Company has formed a new partnership with packaging supplier Albea and chemical manufacturing company SABIC to develop recycled tube packaging. As a part of the conglomerate's sustainable packaging goal, ELC owned luxury brand Origins will utilize post-consumer mixed plastics for its Active Charcoal Mask tube.
The company will use recycled post-consumer material in its packaging by up to 50% by 2025. Moreover, the Origins brand aims to switch 80% of its packaging to be recyclable, reusable, recycled by 2023. Moreover, in 2021- GPA Luxury has created luxury whisky packs for Diageo Prima & Ultima premium luxury whisky. The exterior of the packaging is made from FSC-certified white paper, decorated with gold foil dots. Hence, with increasing demand for eco-friendly products, luxury packaging manufacturers are also shifting towards sustainable products.
The global rise in the number of product launches, particularly in the cosmetic & fashion sectors, is propelling the growth of the luxury packaging market. One of the key factors, which has been witnessed among manufacturers in recent times, is the worth of bio-degradable, sustainable or eco-friendly packaging. Thus, players frequently invest in advanced & innovative technology to provide manufacturers with sustainable luxury packaging, boosting the market's growth. Another trend that is fueling the market's growth is the growing penetration of travel retail and online retail. The retail travel market is expanding rapidly and is emerging as an opportunity for future growth of the global luxury packaging market.
Heavy weight and bulky packaging product and material is expected to hinder the market growth
The increasing reluctance of consumers and marketers to utilize heavy-weight and bulky packaging products and materials is the major factor hindering the market growth and will further challenge the growth of the luxury packaging market.
New and various packaging material for differentiating the product from competitors is another element to attract new customers. Utilizing these exquisite materials for packaging is adding to the cost of the product which is hindering the companies from going for luxury packaging. Extra layers of packaging are also making the products bulky and taking more space for shipping, this is adding to the cost of the product.
Luxury Packaging Market Segment Analysis
By end-user, the market is segmented into fragrances & cosmetics, tobacco, confectionery, premium alcoholic drinks, gourmet food & soft drinks, watches & jewelry and others.
Designing luxury packaging means taking into account all senses, particularly vision, smell, sound and touch. The beauty industry creates almost 120 billion units of packaging every year. The expanding cosmetics products market globally needs numerous investments for the cosmetics packaging market. Global cosmetic sales and trade have been on a boom in recent years. For example, European countries accounted for the largest worth of exported skincare and beauty goods during 2019, with shipments valued at US$28.4 billion or approaching half almost 45.6% of the global total. Germany was the leading consumer of cosmetics within the European cosmetics market in 2019, valuing almost 14 billion euros.
With increasing investments in cosmetics and perfumes, companies are coming up with new luxury packaging solutions to increase consumer engagement towards the products. For instance, in 2021- Pollard boxes collaborated with REN clean skincare to design a sustainable and stylish presentation box for its limited-edition look fantastic beauty subscription box. The box highlights a set of REN skincare products for attracting customers to the brand. The plastic-free box is manufactured from recycled 100% eco kraft paper and produced in the UK. Moreover, easy fairs have announced to launch the new edition of packaging for perfumes cosmetics and design (PCD) to be co-located with its event Packaging Premiere. The launch is scheduled in Milan on May 24 -26, 2022.
Luxury Packaging Market Geographical Analysis
Based on the geography, the luxury packaging market is segmented into North America, Europe, South America, Asia-Pacific, and Middle East & Africa. The demand for luxury packaging in the North American market is expected to remain at the dominant position in sales and value generation due to the growing volume of trade and e-commerce in countries such as the U.S.
North America is witnessing a significant growth during the forecast period
North America is currently the major regional segment in the market, almost followed by Europe. The sales of personal luxury commodities in North America and the increase in tourist spending on luxury products in Europe are behind the increase of the luxury packaging market in these particular regions. Another reason behind the increase of the market in Europe is the growth in flagship stores. A surge in online sales is also an increased driver for the market in Europe. Asia Pacific is expected to observe a fast-paced growth in the upcoming years on increasing customer spending in China, Japan and ASEAN. Customers from China have a substantial share in luxury spending, boosting the market in China. Moreover, the Euro depreciation is also having a positive impact on the increase of the market. Average growth can be expected in the Middle East and Africa because of global luxury product manufacturers' expansion in the area.
The Asia-Pacific region continues the highest market share of the worldwide luxury packaging market, increasing disposable income and consumer expenditure on luxury products. The growing urbanization linked with a huge population has led to changing consumer preferences towards urban lifestyle. Further, the market is growing with a transition towards sustainable packaging as various countries in the region have banned plastics. Now manufacturers are focusing on offering packaging with bio-degradable materials. The region has seen tremendous growth in product launches in the food & beverages, fashion and cosmetic sector. The major international brands invest in the region to set up their stores and pose various growth prospects.
For instance, China's cosmetics and personal care products market reached around US$42.8 billion and is anticipated to become the largest market globally in the next five years. Various countries like China and India are being targeted by the top multinational luxury brands, as these countries are growing into the leading consumer of luxury goods. Moreover, the growing e-commerce market in the region is expected to drive the market for luxury packaging manufacturers. For instance, in 2021- French luxury conglomerate LVHM has commenced construction on its most comprehensive e-commerce storage and sales hub for cosmetics and perfume products in the Asia Pacific region. The project will utilize a 22-acre area and an estimated cost of $154 million (1 billion yuan).
Luxury Packaging Market Competitive Landscape
The luxury packaging market is fragmented with the presence of regional and global players. The competitive contour lies with the increase in the regional company and growing investment in upstream application. Progress Packaging, HH Deluxe Packaging, Ekol Ofset, DS Smith, Design Packaging, Inc., Pendragon Presentation Packaging Ltd., Elegant Packaging, MW Creative Ltd., WINTER & COMPANY AG, Lucas Luxury Packaging are the major player in the packaging market. The major players adopt several growth strategies such as product launches, acquisitions, and collaborations, contributing to growing the luxury packaging market globally.
Overview: The company has lived and breathed packaging manufacturing together with its clients since 1997. Continuously evolving the compelling role this exceptional format plays for brands. The company has helped to adopt change, identify opportunities and push production limits. The company works with clients globally to provide unrivalled expertise and design the highest quality packaging goods at the best value.
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The global luxury packaging market report would provide an access to an approx. 69 market data table, 77 figures and 180 pages.
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