When it comes to beauty packaging, the future is about luxury.
According to market researcher Smithers Pira, the luxury packaging market continues to grow globally, driven by the surge of personalized packaging, attention to sustainability issues, economic and demographic drivers.
Further reading: hear from another data source here
Data from the Smithers Pira report, The Future of Global Packaging to 2020, estimates the total global market for packaging in 2015 was worth $839 billion. This will grow steadily at a rate of 3.3% year-on-year through to the end of the decade; the market will be worth nearly $1 trillion in 2020, the report said.
Luxury packaging is a lucrative, fast developing segment of this; Smithers Pira values it at $14.8 billion in 2015. However, it is a segment where higher unit costs and the willingness of brands to invest in designs that directly enhance their products making it a cockpit for the entry and perfection of novel technologies, the firm added.
Cosmetics and fragrances is the largest segment of the packaging market, accounting for a projected 43.3% share of the luxury packaging market ...
Luxury in Variety and Asia's Fast-growing Market
Luxury packaging designers are increasingly gaining access to high-quality materials, finishes, decoration, innovative shapes, caps and closures that enhance the consumer experience of the product, Smithers Pira found.
Cosmetics and fragrances is the largest segment of the packaging market, accounting for a projected 43.3% share of the luxury packaging market by value in 2014, the market researcher said. As the market expands, luxury applications will outstrip mean expansion in the packaging industry, growing at 4.4% in value terms year-on-year through to 2019 – culminating in a market Smithers Pira estimates at $17.6 billion in that year.
Growth will be highest in Asia and the currently modest market of Latin America.
Growth will be highest in Asia and the currently modest market of Latin America. The more mature regions of Western Europe and North America will see growth that, while still healthy, is below the global average.
The volume of luxury packaging consumed will increase at 3.1% annually across the same period, the report added.
Global brands Investing in Brand Protection
Luxury brands are investing over the next five years in:
- Anti-counterfeiting and brand protection
- Digital printing
- Enhanced embellishment and tactile effects
- Connection to the online world via smart devices and Big Data stores
Previously: Demand Booms for Anti-counterfeit Cosmetics Packaging
What's Driving Luxury Packaging Development?
In addition to these technology developments, the report found there are a number of other factors impacting the direction towards which luxury packaging is developing, including:
- Active packaging that can affect the goods within is increasingly being used for luxury products
- Luxury experience packaging where increased physical engagement with the branded pack enriches the consumer’s overall experience. This encompasses designs for novel opening and unwrapping mechanisms; infusing paper and packaging material with long-lasting fragrances; and fixtures, for example magnetic closures for color cosmetics compact cases so that consumers are able to hear a sound confirming that the product has closed correctly;
- Personalized packaging, where a packaging product is embellished to make it unique and personal to the consumer – a trend that is most prevalent in gift-giving and driven by the technical capability of inkjet printers;
- Sustainability is a megatrend across packaging. Luxury brands are aware that a greener profile is a worthwhile commitment for products like confectionery and cosmetics.
Which Packaging Materials are Most Popular?
The main materials used in luxury packaging are paperboard, glass, metal, plastic, textiles, leather and wood. Paperboard is the most popular material used in luxury packaging, accounting for a projected 41.9% share of luxury packaging market value in 2014.
The second most used material in value terms is glass, followed by plastic, with market shares of 30.1% and 15.4% respectively. In terms of market volume, glass accounts for the largest share at 58.3%, followed by paperboard, which has a share of 25.9%.
Further reading: Plastics to Drive Cosmetics Packaging Growth for Next Decade and Sustainability is Buoying Glass Packaging Demand
According to the report, this discrepancy can be explained by the relatively lower cost of glass per tonne, compared to both luxury paperboard and plastic, as well as the higher unit weight and density of glass.
Across luxury packaging materials, plastic and glass are forecast to show the highest growth rates in value terms through to 2019.
Across luxury packaging materials, plastic and glass are forecast to show the highest growth rates in value terms through to 2019. Plastic is also set to be the fastest growing material in terms of volume. Demand for both glass and plastic is being driven by the recovery and stronger growth evident in the main luxury markets, particularly cosmetics and fragrances.
Glass on the whole is losing share in packaging, but is proving much more resilient and hard to replace in luxury applications, the researcher said. It remains popular with brand owners and consumers, due in part to its strong sustainability associations, but more importantly for its high-quality appearance.
The report also noted that rising demand for plastic packaging meanwhile is being driven by its lower cost and lighter weight. The mass-market packaging industry is increasingly consolidated – especially in older material formats like glass and metal – but less so for newer rigid and flexible polymer types.