The luxury goods packaging market by value in Asia Pacific is expected to see a compound annual growth rate (CAGR) of 7.1 percent in the period to 2015, according to new research from Pira Intl. This outstrips the 4.9 percent projected for the global luxury packaging market as a whole and 3.0 percent for the global consumer packaging market. Led by strong growth in Chinese luxury goods sales, the region is now the clear leader in luxury packaging, accounting for 35 percent of world sales value in 2010.
According to Pira, the global luxury goods packaging market represented 3 percent of global consumer packaging sales in 2010. Valued at almost $11.9 billion in 2010, consumption reached just over 7.6 million tones. Following a prolonged period of unabated growth as world economies boomed, luxury packaging market volume growth began to slow down in 2008 with the onset of the global economic crisis. In 2009 luxury goods and luxury packaging sales declined as the recession deepened. In 2010 there were clear signs that luxury goods and luxury packaging sales are once again growing.
The study, The Future of Luxury Packaging to 2015: Global Market Forecasts, found that luxury goods and luxury packaging consumption is being driven primarily by growing economic prosperity and affluence around the world. The developed world regions of North America, western Europe and Japan, which boast higher incomes per head and a sizeable proportion of high net worth individuals, are the largest markets for luxury goods and luxury packaging. However, rapidly developing countries such as Brazil, Russia, China and India are growing luxury goods and luxury packaging consumption at significantly higher rates than developed countries.
Pira expects that Asia Pacific will increase its share of luxury packaging sales over the period 2010-15 as economic growth in the region continues to outstrip the more mature western Europe and North American regions. The U.S. will remain the largest national market for luxury packaging, but China will continue to close the gap. South America (led by growing prosperity in Brazil), eastern Europe (led by Russia), and the Middle East and Africa are also forecast to grow their market share of luxury packaging sales over the period 2010-15.
According to Pira, China is the leading luxury packaging market in the Asia Pacific region and the world's second-largest market in volume terms after the U.S. Growing at a projected CAGR of 10.8 percent over the next five years, luxury packaging in the country is expected to be worth $2.5 billion by 2015up from an estimated $1.5 billion in 2010. Consumption of luxury goods in Chinahas now surpassed that of the US, making it the largest market for luxury goods after Japan. By 2015, Pira expects that 29 percent of global luxury products will be consumed in China, making it the world's largest luxury market.
Healthcare, cosmetics and fragrances are the largest end-use sectors for luxury packaging in value terms-together accounting for just over 46 percent of total luxury packaging market value in 2010. Premium alcoholic drinks and gourmet food and drink rank second and third. During the period 2010-15, Pira expects luxury packaging for premium alcoholic drinks to achieve the strongest growth at a CAGR of 6 percent. Healthcare, cosmetics and fragrances luxury packaging market values are predicted to be similarly strong at growth of 5.6 percent and 5.3 percent respectively. In contrast, the luxury packaging market for tobacco is set to decline over the next five years.
According to Pira's research, the key market trend in luxury packaging is undoubtedly the growing interest that brand owners are showing in sustainable packaging. While luxury brand owners remain intent on preserving the luxury look and feel of their packaging, they are increasingly keen to be seen as being environmentally responsible in terms of the type of packaging materials being used. Paperboard, which is regarded as being an environment-friendly material, is finding growing applications in luxury packaging. Leading board and carton producers are also securing Forest Stewardship Council (FSC) certification as part of a drive to demonstrate their environmental credentials.