There are many benefits of luxury packaging. From design to development to manufacturing, it is a crucial component of a brand's image. And studies show that consumers will spend more on products if the packaging is appealing. Creating the right luxury packaging design starts with understanding the target audience. A mass-produced product might have bright colors that are hard to remove. Luxury brands want to target their customers' sense of touch and sight. To do this, consider adding a depth-enhancing element.
The global luxury packaging market was valued at US$ 14.49 Bn in 2021 and is forecast to reach a value of US$ 19.1 Bn by 2030 at a CAGR of 4.4% between 2022 and 2030.
Asia Pacific held dominant position in the global Luxury Packaging market in 2020, accounting for 34.1% share in terms of volume, followed by Europe and North America respectively.
Figure 1. Global Luxury Packaging Market Value Share (%), By Region, 2021
|Base Year:||2021||Market Size in 2021:||US$ 14.49 Bn|
|Historical Data for:||2017 to 2020||Forecast Period:||2022 to 2030|
|Forecast Period 2022 to 2030 CAGR:||4.40%||2030 Value Projection:||US$ 19.1 Bn|
Tier 1 Companies (DS Smith PLC, Crown Holdings Inc., Ardagh Group, WestRock Co., Owens-Illinois Inc., International Paper Company Inc., Amcor PLC, Delta Global, GPA Global), and Tier 2 Companies (HH Deluxe Packaging, Prestige Packaging Industries, Pendragon Presentation Packaging, Stolzle Glass Group, Keenpac, Elegant Packaging, BC Boncor, Luxpac Ltd, McLaren Packaging Ltd, and B Smith Packaging Ltd)
|Restraints & Challenges:||
Growing use of sustainable and bio-degradable packaging is driving growth of the luxury packaging market. The paperboard material is significantly used in the packaging of luxury goods as it has a high recycling rate. According to the European Paper Recycling Council (EPRC) July 2020 press release, the paper recycling rate in the region maintained its high recycling numbers in 2019, increasing from 71.7% in 2018 to 72%. This rate was achieved owing to a stable utilization of Paper for Recycling (PfR) in the European paper industry.
Increasing preferences for customized packaging solution from end-user industries is again fostering market growth. With the increasing trend for personalization, the demand for customized packaging in the luxury goods market is witnessing significant growth. Various end-user such as fashion & Apparel, premium beverage, watches, and jewelry are offering customized packaging solutions to fulfil the need of the consumers.
Figure 2. Global Luxury Packaging Market Value Share (%), By End Use Industry, 2021
Low adoption in packaging heavy and bulk products is expected to hinder the market growth. The packaging of the heavy and bulk product involves a lot of cost constraint factor to the manufacturers such as machinery cost, cost of material, high printing cost, among other which is another reason why luxury goods manufacturers are restricting to pack heavy and bulk luxury goods.
Impact of Covid-19 has significantly affected the overall packaging industry. This pandemic has severely impacted the industrial and trade activities. Hence, creating a slowdown in the luxury packaging market.
Increasing launch of advanced packaging that restrict transmission of Covid-19 is expected to provide lucrative growth opportunities. For instance, in July 2020, Fedrigoni Group developed a virostatic paper that restricts Covid-19 transmission that can be applied from luxury packaging to protective face masks.
Growing demand for paper &paperboard in luxury packaging is again projected to bring profitable market opportunities for the players. Factors such as unique coatings, laminations, high printability, and striking appearance make paper & paperboard more attractive compared to other materials.
Market Trends/Key Takeaways:
Changing fashion trend is creating demand for cosmetic products which in turn expected to uplift growth of the market in the future. For instance, according to L'Oréal the annual growth rate of the global cosmetics accounted to 5.25% in 2019 compared to 1% in 2009.
Various key vendor of glass packaging for luxury packaging are significantly expanding their foot hold by adopting merger and acquisition activities. For instance, in February 2021, Slovenian glassmaker Steklarna Hrastnik inaugurated its new furnace for extra white flint glass with investment of EUR 18.5 Billion. The new furnace has a production capacity of 120 tons and will produce extra white flint glass for spirits, cosmetics and perfumery market. Moreover, the company operates two furnaces at two sites in the town of Hrastnik and it plans to upgrade its B furnace, dedicated to extra white flint glass for spirits, with a capacity of 165 tons, in 2023.
The process of luxury packaging involves design, research, development and manufacturing. This type of packaging enhances the image of a brand. According to research, consumers are more willing to pay more for products with beautiful packaging. Therefore, luxury packaging is crucial to the marketing strategy of a brand.
Growing demand for sustainable and bio-degradable packaging is expected to drive growth of the luxury packaging market. Increasing consumer spending on online shopping and growing demand for personalized packaging are other major factor fostering market growth. Additionally, growing consumer interest on luxury goods and expanding cosmetic industry will further favor the market growth. For instance, in February 2021, Ardagh Group introduced a new edition to their glass portfolio that caters to the limited-edition Vodka bottle (Absolut). The glass is blue frosted with upward spiral design having 16 swirls that symbolizes a never-ending cycle of change.
On the other hand, low adoption of packaging in heavy products and covid-19 impact are major factor expected to restrict the market growth.
Key features of the study:
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