Lee Henderson, manager of European sustainability and stakeholder outreach at Asia Pulp and Paper
A new report released by Smithers Pira forecasts the acceleration of innovation in luxury packaging, driven by significant growth in the sector.
According to the report, sponsored by Asia Pulp and Paper, ‘Paper based packaging trends to 2019’, the global market for luxury goods packaging currently stands at $14.2 billion (2014) and is expected to increase 19% by 2019, reaching $17.6 billion.
Cosmetics/fragrances currently accounts for 43% of sales of luxury goods and will continue to be the main driver of growth within the sector, increasing at around 6% per annum over the next five years.
Regionally, growth will range from around 3% per annum in Western Europe and North America to 6% in Asia-Pacific and as much as 9% in South & Central America.
This growth in demand is driving innovations in the market, which is being facilitated by new technology, these include consumers’ increasing awareness of sustainability issues, particularly in mature markets, which is putting pressure on luxury brand owners to reduce the environmental impact of packaging.
Anti-counterfeiting measures also have a part to play with the global market for brand protection was valued at $2.33 billion in 2013, encompassing value-added tamper evidence, track and trace, product authentication and anti-theft technologies (this does not include the value of the basic packaging).
Personalisation has also been seen as a driving factor within the premium alcoholic drinks market in particular, which is engaging with this trend, and other luxury markets also experimenting with personalisation, as it proves popular among consumers, who feel that brands are making an effort to build a relationship with them.
Identification (ID) and Quick Response (QR) codes that are printed onto packaging are increasingly being used to enable consumers to learn about the story behind a brand, with some prototypes appearing in the market for ‘smart-products’ that can communicate with users through NFC-embedded labels. As luxury brands explore new ways of incorporating codes into their packaging without affecting the aesthetics, they are expected to establish a large presence in luxury packaging over the next five years.
Lee Henderson, manager of European sustainability and stakeholder outreach at Asia Pulp and Paper, said, ‘This new report signifies that the industry is about to enter a ‘Golden Era’ of product development. The luxury packaging sector is on the cusp of a tipping point, where a rise in demand for luxury goods and the introduction of new technology will unlock a period of unprecedented innovation in the market. The proliferation of 3D printing, for example, enables manufacturers to transform designs into products within hours, and so we can expect to see an exciting range of new products hit the shelves as brands experiment to further differentiate their products.
‘Moreover, trends in the luxury packaging sector are an indicator of what other segments of the industry can expect. Packaging that is sustainable, personalised, has the ability to interact with digital technology, prevents counterfeiting and uses the latest state-of-the-art printing technology is not just a demand of buyers of luxury goods, but reflective of general consumer preferences. The packaging industry should now plan for these trends to become the norm far beyond simply luxury packaging.’
Adam Page, Business Manager, Smithers Pira, said, ‘With the downturn affecting many parts of the paper industry, the growth of paper-based packaging remains a bright point for mills, converters, brand owners and retailers. Our research shows how the drive for luxury/premium solutions, innovative new technologies and the sustainability agenda is driving demand – and will continue to drive demand – in this segment of the packaging market.’
