The Europe luxury packaging market’s value should touch the US$ 2.3 billion mark in 2023. From 2023 to 2033, a sluggish 3.5% CAGR is likely to accelerate the market. In 2033, this would result in a US$ 3.2 billion market valuation.
Leading markets across Europe should secure a 40 to 45% share in the global specialty packaging industry in the years ahead. Luxury or specialty packaging refers to the research, design, development, and manufacturing of displays and packaging specifically for high-end brands.
For every luxury brand operating in the modern era, packaging matters just as much as product quality. Quite simply, if a product’s packaging appears luxurious and appealing, consumers with purchasing power would accept spending more on it.
Here’s a brief look at the benefits of luxury packaging for premium brands
· It adds to product value
· It enhances brand image
· It offers personalized packaging, which can improve consumer engagement
· It diversifies products
· It creates appeal in audiences’ minds
According to Future Market Insights (FMI), the paper & paperboard segment should dominate luxury packaging sales in the coming years. The segment is likely to generate a whopping 40% of the market’s revenue in 2023. FMI expects this number to increase between 2023 and 2033.
In recent years, there has been an increasing focus on security packaging from luxury brands. This is due to the fact that luxury products carry high value, and as a result, they are prone to theft. Security packaging facilitates the reduction of package pilferage.
Players in the luxury packaging industry are also keen on offering authentication tech. This can go a long way towards proving the authenticity of luxury products and making them distinct from counterfeits. FMI expects these trends to further the expansion of the market for luxury packaging in Europe.
A US$ 1.0 billion absolute dollar opportunity is likely as the market continues to register further acceleration from 2033 to 2033. During this period, the market should expand to around 1.4 times of its current size on its way to surpassing the US$ 3.2 billion mark.
Europe Luxury Packaging Market Outlook
Between 2015 and 2022, the market for luxury packaging in Europe could only accelerate at an extremely sluggish 1.8% CAGR. This sluggishness in market expansion was predominantly a result of the COVID-19 pandemic, which brought the overall European economy to a standstill. Despite the sluggish acceleration, the market still reached a US$ 2.2 billion in 2022.
However, it was not all doom and gloom for the market as several trends came to the fore. For instance, in December 2018, Easyfairs announced the launch of Packaging of Premium & Luxury Drinks (PLD), an exhibition. Its aim was to encourage collaborations between suppliers, innovators, and designers working across the international luxury drinks packaging sector.
Prominent acquisitions took place as well. For example, in November 2021, GPA Global announced the acquisition of a packaging manufacturing site on the outskirts of Warsaw, the capital of Poland. The site, with an 8,000 square meters’ area, was owned previously by ASG Spark.
Sustainable security solutions relevant to luxury packaging also made their presence felt. For instance, in August 2021, Austrian company Securikett announced the launch of a security seal for making packaging tamper proof. The paper-based seal is an eco-friendly solution for today’s security needs in the packaging sector.
According to FMI, these trends are set to gain more traction from 2023 to 2033. As a result, they are likely to facilitate Europe luxury packaging market expansion. FMI’s estimates suggest these trends could be telling as the market makes its way towards a US$ 3.2 billion.
Drivers
· Luxury brands’ intention to enhance product value through sophisticated packaging is likely to drive acceleration in the specialty packaging industry.
· Adoption of tech to verify product authenticity and make products secure is set to spur demand for luxury packaging in the Europe market.
Restraints
· Economic uncertainties fueled by the geopolitical climate across Europe are poised to restrain the market.
· Low income groups cannot afford luxury goods, and their lack of participation in the market is likely translate to limited revenue generation.
Opportunities
· Increasing need for security tech in luxury packaging would provide lucrative opportunities to players.
· Rising focus on sustainability in packaging should set the tone for players and encourage production of eco-friendly products.
Threats
· Stringent regulations may threaten the plastic segment as governments across Europe are keen on limiting the use of harmful plastics.
How will Expansion of Online & Travel Retailing Sector in Europe Propelling Luxury Packaging Sales?
Convenience of Online Retail and Return of Travel Retail to Spur Luxury Packaging Industry Expansion in Europe
The burgeoning popularity of online retail is presenting opportunities for luxury goods players to ship products to customers anywhere in the world. Compared to physical retail stores, the costs associated with online channels are significantly lower.
As a result, players can offer premium products to customers via online channels at discounted rates. This is generating substantial demand for luxury products created by premium brands across several industries.
FMI anticipates the penetration of online sales channels to increase in the years ahead. With escalating penetration of online retailing, it’s safe to say that luxury packaging demand is bound to experience a boost.
Tourism restrictions enforced during the COVID-19 pandemic affected travel retailing. However, over the last 2 years, tourism in Europe is bouncing back. This should provide incentives to players operating in the travel retail sector as they aim to woo international tourists with their sophisticated packaging solutions.
Will Rising Focus on Sustainability Play a Prominent Role in Driving Luxury Packaging Sales in Europe?
Plastic Waste Problems in Europe to Fuel Adoption of Sustainable Luxury Packaging Materials
Governments across Europe are increasingly taking notice of the plastic waste’s toll on the region. As a result, they are engaging in initiatives with the intention to reduce plastic waste drastically. They are also taking proactive steps in managing the plastic waste the region generates.
For instance, in December 2022, the Environment Committee of the European Parliament voted to ban the region’s plastic waste exports. In the recent past, the region’s plastic waste has been predominantly exported to Türkiye for recycling.
Research carried out by global watchdog Human Rights Watch has revealed that lives of workers across the country’s recycling plants have suffered as a result.
Such efforts to reduce plastic waste should spur demand for eco-friendly materials in the region’s luxury packaging market like paper and paperboard. Luxury brands operating in Europe are also willing to lend a helping hand in eradicating the menace of plastic waste.
Country-wise Insights
How is the United Kingdom Fashion Industry Supplementing Luxury Packaging Sales?
Burgeoning Fashion & Textile Sales in the United Kingdom to Make it Leading Destination for Luxury Packaging Companies in Europe
The United Kingdom market for luxury packaging is likely to register a slow 4.5% CAGR from 2023 to 2033. The expanding fashion & textile industry in the United Kingdom is estimated to fuel the sales of luxury packaging. According to the United Kingdom Fashion & Textile Association (UKFT), the industry contributes around US$ 128 billion to the country’s economy.
Spending on fashion & textile is on the rise in the United Kingdom. Consumers are spending around a mammoth US$ 45 billion on fashion & textile annually. In 2020, around 34,000 businesses operated in the United Kingdom’s fashion & textile sector. As a result, it is fair to assume that the United Kingdom is likely to dominate luxury packaging sales in Europe due to its thriving fashion & textile industry.
Competitive Landscape
Acquisitions, partnerships, and collaborations are all likely in the Europe market for luxury packaging between 2023 and 2033. FMI also expects players’ approaches to be dynamic as regulations issues by government agencies keep changing.
For instance
· In February 2023, TriMas Packaging announced that it had completed the acquisition of Aarts Packaging, a specialty packaging company based in the Netherlands.
· In January 2023, Mainetti Group announced the acquisition of Belgium-based Centurybox Group in a bid to enhance sustainability in luxury packaging.
These insights are based on a report by Ismail Sutaria Europe Luxury Packaging Market by Future Market Insights.
