Luxury Packaging Market Analysis & Forecast: 2025-2032

Luxury Packaging Market is estimated to be valued at USD 17.38 Bn in 2025 and is expected to reach USD 24.13 Bn in 2032, exhibiting a compound annual growth rate (CAGR) of 4.8% from 2025 to 2032. From design and development to manufacturing, it is a crucial component of a brand's image. Studies show that consumers 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.

Market Drivers:

Growing demand for sustainable and bio-based packaging

Growing use of sustainable and bio-degradable packaging is driving the growth of the luxury packaging market. Paperboard material is significantly used in the packaging of luxury goods as it has a high recycling rate. According to European Paper Recycling Council (EPRC) July 2020 press release, the paper recycling rate in the region maintained its high recycling numbers  increasing from 71.7% in 2018 to 72%. This rate was achieved owing to a stable utilization of Professional Fund Raiser in the European paper industry.

Expanding cosmetic and personal care industries

The increasing preference for customized packaging solutions from end user industries is fostering the market growth. With the increasing trend for personalization, the demand for customized packaging in the Global Luxury Packaging Market is witnessing significant growth. Various end users such as fashion & apparel, premium beverages, watches, and jewelry are offering customized packaging solutions to fulfil the need of the consumers.

Figure 1. Global Luxury Packaging Market Value Share (%), By Region, 2025

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Asia Pacific held the dominant position in the global luxury packaging market in 2025, accounting for 35% share in terms of volume, followed by Europe and North America respectively.

Market Restraints:

Packaging heavy and bulk products

Low adoption in packaging heavy and bulk products is expected to hinder the market growth. The packaging of heavy and bulk products involves a lot of cost constraint factor to the manufacturers such as machinery cost, cost of the material, and high printing costs. There is just another reason why makers of luxury products are limiting their use of bulky, heavy packaging.

Market Opportunities:

Increasing launch of advanced packaging

Increasing launch of advanced packaging that restricts the transmission of COVID-19 is expected to provide lucrative growth opportunities to the market. 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. Fedrigoni is a large paper manufacturer in Italy which owns paper mills in Verona, Arco di Trento, Riva Del Garda, Fabriano and Pioraco.

Growing demand for paper & paperboard in luxury packaging

The growing demand for paper & paperboard in luxury packaging is again projected to bring profitable market opportunities for the market players. Factors, such as unique coatings, laminations, high printability, and striking appearance make paper & paperboard, make them more attractive compared to other materials.

Figure 2. Global Luxury Packaging Market Value Share (%), By End User Industry, 2025

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Market Trends

Changing fashion trend is creating the demand for cosmetic products

Changing fashion trend is boosting the demand for cosmetic products, which, in turn, is expected to uplift the growth of the market in the future. For instance, according to L’Oreal the annual growth rate of the global cosmetics accounted for 5.25% compared to 1% in 2009. L’Oreal S.A. is a French personal care company headquartered in Clichy, Hauts-de-Seine, with a registered office in Paris. It is the world's largest cosmetics company and has developed activities in the field, concentrating on hair color, skin care, sun protection, make-up, perfume, and hair care

Adopting merger and acquisition activities

Various key vendor of glass packaging for luxury packaging are significantly expanding their foothold by adopting merger and acquisition strategies. For instance, in February 2021, a Slovenia-based glassmaker, Steklarna Hrastnik inaugurated its new furnace for extra white flint glass with an investment of 201.59 Billion. The new furnace has a production capacity of 120 tons and will produce extra white flint glass for the spirits, cosmetics, and perfumery markets.

COVID-19 Impact Analysis

The COVID-19 pandemic significantly affected the overall packaging industry. It severely impacted the industrial and trade activities. Hence, creating a slowdown in the luxury packaging market. he luxury packaging market has witnessed negative growth due to the outbreak of COVID-19.The changing consumer behavior regarding the purchasing of luxury products has resulted in consumers spending more mindfully on their purchases of luxury products and more on essential items. The lockdown imposed in the initial outbreak of the virus across the globe has resulted in the closure of many luxury goods and packaging production plants, which has impacted the studied market growth. In addition, the retail stores are closed in many countries, which has also impacted the growth of the market. For instance, in April 2020, Neyret announced that its production plant is operating at between 30% and 80% capacity depending on the country

Recent Developments:

1. In March 2020, DS Smith announced the opening of its first recycling facility in the U.S., the company’s latest expansion of its business operations in North America. The new plant can recycle over 36,000 metric tons of old corrugated cardboard each year, creating new and fully recyclable packaging for customers. DS Smith plc. is a British multinational packaging business, headquartered in London, England.
2. In February 2021, Heineken  partnered to support a new glass recycling pilot program, Volte Sempre, in Brazil. Consumers take their empty glass bottles to machines located at convenient places around supermarkets, bars, and residential condos. When a consumer drops off a bottle at a Volte Sempre machine, they get credit through an app that they can redeem toward their next Heineken product purchase. The company thereby uses recycled glass to maintain the environmental sustainability. Heineken N.V. is a Dutch multinational brewing company, founded in 1864 by Gerard Adriaan Heineken in Amsterdam.