Luxury Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Luxury Packaging Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The luxury packaging market was valued at USD 16.65 billion in 2020 and is expected to reach USD 22.37 billion by 2026 and grow at a CAGR of 4.8% over the forecast period (2021-2026). The cannabidiol or CBD packaging trend is spreading immensely in the lifestyle and beauty markets. The market for luxury products made from the non-psychoactive parts of the marijuana plant is exploding, as these labels are targeting the retailers like Sephora and Neiman Marcus. These aforementioned factors add to the growth of the market.

Key Highlights

• The use of luxury packaging for packaging and decorating high-end products is driving the market's growth. Major packaging vendors are gaining access to numerous high-quality materials and innovative shapes as these properties improve the consumer experience.
• Factors such as changing consumer preferences, growing willingness to spend more, and rising focus of various brands on design, processes, and the overall product development drive the luxury packaging demand.
• The use of sustainable and bio-degradable packaging is a crucial driver for the market. Various companies are gradually prioritizing sustainable development over everything else, as the consumers are becoming more and more environmentally aware and are seeking out more sustainable lifestyle choices. The sustainable make-up box produced by Giorgio Armani is meant to enhance awareness toward an eco-friendly environment.
• Origins would be the first prestige beauty brand to adopt SABIC's innovative, advanced recycling technology to produce a tube pack format made from previously difficult to recycle, post-consumer mixed plastics material. ELC approaches sustainable design options for its prestige and luxury packaging with a spirit of collaboration. To further its focus on reducing the potential environmental impacts of a package across its lifecycle, the company partners with SABIC and Albéa on Origins industry-first sustainable packaging innovation.
• This strategic partnership aligns with ELC's sustainable packaging goals, which includes increasing the amount of post-consumer recycled (PCR) material in its packaging by up to 50% by 2025, and would further Origins efforts to ensure that at least 80% of the brand's packaging by weight is recyclable, refillable, reusable, recycled or recoverable by 2023.
• Due to the worldwide lockdown due to COVID-19, the supply chain of the luxury packaging market was disrupted. But the market is recovering and is not supposed to create any significant effect in the long run.

Key Market TrendsPaperboard is Witnessing an Increased Adoption

• Paperboard is one of the most popularly used materials in packaging. Some of the other used materials include metal, glass, plastic, and wood, among others. Most of these materials used are easily sourceable and, at the same time, help to establish a sense of premium quality in the minds of customers.
• Paper and paperboards have maintained a strong position in luxury and premium packaging, with their ability to serve as the canvas for flawless graphics and eye-catching decoration. The features, such as laminations, unique coatings, super embossing, and debossing effects, make papers much more attractive in the packaging of luxury items. These packagings also provide superior strength and smoothness.
• In the high-end wine and spirits segments, papers have always been popular label materials. The craft beer brands use paper labels to describe or advertise the products' premium or handcrafted values.
• In addition, the five-star fragrance company XOXO's Eau de Parfum spray features diamond glitter coating, multi-color printing, foil stamping, and embossing. The carton is converted utilizing Invercote G paperboard and offset, printed with two spot colors and dense black inks with UV gloss spot coating. These features are meant to attract customers to purchase the product.
• Moreover, According to the European Paper Recycling Council (EPRC), 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.

Asia Pacific to Witness a Highest Growth Rate

• The Asia Pacific region is expected to grow substantially in the forecast period, owing to the increase in disposable income and consumer spending on luxury products. Large population and massive urbanization have led to the rise in the adoption of urban lifestyle due to the changing consumer patterns and the rising demand for luxurious products. For instance, According to the National Bureau of Statistics of China, In 2019, about 60.16% of the total population lived in cities.
• Further, sustainable packaging is driving the market in the Asia-Pacific region, as the manufacturers of high-end products are focusing on producing packaging with the help of bio-degradable materials. Major international brands are focusing on eco-friendly luxury packaging solutions to maintain sustainability goals.
• The major key factors driving the growth of the market include a massive increase in the number of product launches in the fashion and cosmetic sectors. The major international brands are eyeing the emerging economies, such as China, India, etc., to set up their stores in these countries, as these countries pose various growth prospects.
• Also, the rise in penetration of online retail and travel retail, increasing innovations in technologies in luxury packaging, and others are among various other factors driving the growth of the market in the region.
• China is one of the economies increasingly targeted by the leading luxury brands, as the country is fast turning into the world's largest consumer of luxury goods. Chinese consumers are also looking for easy-to-use and quality food products. A surge in online retailing in China is expected to drive the demand for luxury packaging solutions.

Competitive Landscape

The luxury packaging market is very fragmented, and the new players are expanding their businesses to emerging regions. The number of leading vendors operating in the global market is increasing, owing to the increasing income of the middle-class and the increasing infrastructure developments. There is a high rate of competitive rivalry among the international players and the regional players. This factor intensifies the competition. Key players are Amcor PLC, HH Deluxe Packaging, DS Smith PLC, and more.

• June 2021 - Amcor launches an advanced heat seal medical packaging solution for medical applications and paper packaging; the ACT2100 offers increased productivity and is available worldwide. This next-generation coating technology has characteristics for healthcare applications also provides documents for regulations in all markets.
• September 2020 - Delta Global created an innovative, eco-friendly packaging solution for Heat's high-end fashion mystery box service. With sustainability and innovation taking center stage, this partnership aims to strengthen both brands' commitment to responsible practices and mitigate the fashion industry's impact on climate change.
• October 2020 - The Estée Lauder Companies (ELC) and origins announced a sustainable packaging partnership with SABIC and Albea. Origins, a prestigious global skincare brand that provides high-performance formulas powered by nature and proven by science, and its parent company, The ELC, announced a partnership with global chemical industry vendor SABIC and strategic beauty packaging manufacturer Albéa to bring an advanced recycled tube package to market in 2021.
• January 2020 - DS Smith announced the opening of its state-of-the-art 550,000 sqft manufacturing facility in Lebanon. This expansion heralds the company's latest technology, keeping pace with growing demands by consumers and retailers for fully recyclable boxes and fit-to-product packaging that reduces costs, waste, and packing air of irregularly shaped items. The facility can produce about 30,000 boxes/hr and 2 billion sqft of recyclable packaging a year.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

IBM Corporation
Oracle Corporation
Internap Corporation
Packet Inc. (An Equinix Inc. Company)
Scaleway Inc.
Amazon Web Services Inc
Rackspace Inc.
CenturyLink, Inc.
LightEdge Solutions, Inc

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