rethink sustainability
Luxury sustainable packaging requires brands to think outside (and inside) the box
The packaging that products come in is often a central part of the customer experience. Think Chanel’s timeless No.5 bottle, or Hermès’ iconic orange boxes – the packaging provides an element of theatre; the product would not be the same without it.
In today’s world, however, some packaging is creating a dramatic problem. Packaging is not only one of the world’s leading causes of waste, it’s a huge drain on natural resources and a source of greenhouse gas emissions. When it comes to plastic in particular, packaging produces more waste than the next four biggest industrial sectors combined.1
These facts, combined with pressure from consumers and increasing regulation, means many major retailers are now rethinking their packaging, aiming to reduce the total volume and to use more recycled and recyclable materials. In the EU, this is being driven by bloc-wide policy – the European Parliament and Council recently agreed to draw up legislation requiring all packaging to be fully recyclable and banning some single use packaging entirely2.
For luxury brands, whose image is often tied up with the boxes, bottles and bags their products come in, this poses a challenge. Are the days of iconic luxury packaging numbered? Or can the luxury sector help lead the world into a new era of more sustainable packaging?
Eco-friendly luxury packaging – more than meets the eye
When it comes to packaging’s environmental impact, the waste we see is little more than the tip of the iceberg. Plastic, which in most cases can only be recycled a handful of times3, is often tarred as the villain of the piece – but the reality is far more complex.
Glass bottles, for instance, while being near-endlessly recyclable, create as much as six times more CO2 equivalent (CO2e) than a plastic bottle of the same size,4 due to the energy needed to produce and transport them. Aluminium fares better, but still produces twice the CO2e of plastic. Luxury brands must tackle all elements of this problem – from materials to design to transportation – if they are to reduce the impact their packaging has on the planet.
Read also: Can plastic-eating enzymes solve the recycling problem?
In 2020, Italian fashion house Gucci unveiled a new range of eco-friendly luxury packaging designed, appropriately, in green. All elements were carefully thought out, from the exclusive use of paper certified by the Forest Stewardship Council (FSC) to the adoption of water-based non-toxic inks for printing. Its recycled polyester bag handles were also made without glue.5
At the counter, customers still saw elegant and functional packaging. What they couldn’t see was the depth of the changes Gucci had made to improve the sustainability. A dedicated team had worked not only on the materials, but also on the logistics. The result was a number of design innovations, including reversible outerboxes that could be used for returns. These boxes could easily be folded into different sizes and shapes to fit the product as closely as possible, reducing the amount of truck space and truck journeys needed for transportation.
Innovative materials for sustainable luxury packaging
Some luxury brands are using entirely new materials to create more environmentally friendly packaging. LVMH Beauty recently announced plans to replace all plastic containers across its cosmetics and perfume ranges with a sustainable bio-based alternative called Surlyn, made from raw materials such as waste cooking oil.6
In the UK, fashion trailblazer Stella McCartney has taken a similar approach, turning to a compostable bio-based ‘plastic’ called TIPA that provides all the performance of conventional plastic but is also completely biodegradable.7 Chanel has collaborated with US design firm Knoll to create its own biodegradable and recyclable packaging out of bagasse, a waste product from the processing of sugarcane.8
Disruptive luxury Swiss watch brand ID Genève takes an even more cutting-edge approach. It uses pouches made from wine residue, home-compostable protective foam made with renewable mycelium, and seaweed-based boxes that will dissolve in water within hours and can then be used as plant fertiliser.9 “We want our packaging to disappear,” says co-founder Nicolas Freudiger.
At Lombard Odier, we believe the world has to transition to a more circular way of producing packaging in order to create a more sustainable relationship with nature. Reducing demand for materials, cutting waste and using natural materials that can be returned to the environment will not detract from prosperity and growth, but support an economy that thrives on efficiency and innovation.
Read also: The 10 principles of circular economy
Environmentally friendly packaging – the consumer choice
Sustainable luxury packaging firm Hunter says that 42% of consumers of all ages are drawn to brands that use recyclable and sustainable materials, while 45% of beauty consumers now look for recyclability labels prior to purchase.10 This means that embracing eco-friendly packaging offers not only environmental benefits, but can create commercial advantages too.
François-Henri Pinault, Chairman of Gucci’s parent company Kering, believes that a commitment to sustainability has become an essential driver of profits for luxury brands. “My deep conviction that sustainability creates value is part of my strategic vision. Sustainability can – and must – give rise to new, highly ambitious business models and become a lever of competitiveness for our brands,”11 he said.
A study of the luxury industry by consultancy Deloitte agreed with Pinault’s conviction. The embrace of the circular economy, it concluded, has become a “game-changing force” as the sector’s sales soar.12
Read also: How can the textile industry reduce its environmental impact?
The future of eco-friendly luxury packaging
French design house Hermès has been expanding its refill options for more than a decade. This includes adding lipsticks and other beauty products to its initial offering of refillable perfumes.13 Estée Lauder Companies followed suit in 2020, with a pledge to use refillable packaging wherever possible.14
This commitment is part of a growing move to pare back on packaging altogether, and extends beyond retail to the wider luxury sector. Mandarin Oriental Hotels, for instance, has committed to replacing single-use plastic toiletry containers with refillable dispensers across as many of its locations as possible.15 London’s Four Seasons Hotel has made similar moves with toiletries and guest water bottles.16
Some ‘packaging’ for luxury items could even go digital. The original boxes for many Swiss watch brands have long been an important part of establishing provenance for investment purposes, but Panerai and Breitling are now providing tamper-proof digital passports as proof of authenticity (in addition to transitioning to more sustainable packaging).
Embracing sustainable luxury
Luxury and sustainability have long gone hand in hand. “A luxury product is one that can be repaired,” according to Robert Dumas, former Executive Chairman of Hermès. These are products that are built to last, using only the highest quality materials and employing the most skilled craftsmen. From Patek Philippe and Rolex watches to Louis Vuitton bags, luxury items are often investment pieces, designed to be handed down from generation to generation.
Some houses even offer repair services to ensure a product’s longevity – Hermès repaired more than 200,000 items in 2022.17 This is a far cry from fast fashion and today’s throwaway, resource- and materials-intensive culture. Luxury goods are the ultimate in slow fashion.
By extending this low-impact attitude to the packaging their products come in, the luxury sector can help reshape a substantial industry – USD 1 trillion is spent on packaging annually18. With a workforce made up of highly innovative artisans, and a customer base willing to pay a premium for quality, luxury brands are uniquely positioned to lead the wider retail sector in transforming the packaging landscape.
1 How sustainable packaging can reduce plastic waste | World Economic Forum (weforum.org)
2 Deal on new rules for more sustainable packaging in the EU | News | European Parliament (europa.eu)
3 7 Things You Didn’t Know About Plastic (and Recycling) (nationalgeographic.org)
4 True packaging sustainability: Understanding the performance trade-offs | McKinsey
5 Gucci’s Sustainable Packaging – Gucci Equilibrium; How Gucci defied the luxury industry with sustainable packaging (packhelp.co.uk)
6 LVMH Beauty partners with Dow in bioplastics shift for cosmetic and perfume packaging (packaginginsights.com)
7 The Best Eco-Friendly Luxury Packaging to Inspire You (weavabel.com)
8 Bagasse packaging makes another mark! Chanel wins luxury packaging award | PLALEAVES
9 Brands unfold packaging ideas to cut carbon footprint (ft.com)
10 Sustainable luxury packaging in practice (hunterluxury.com)
11 Why luxury goes hand in hand with sustainability | Guardian sustainable business | The Guardian
12 Global Powers of Luxury Goods 2023 | Deloitte Global
13 Hermès financial information | Hermès Finance (hermes.com)
14 Sustainability in Luxury Packaging – The Estée Lauder Companies Inc. (elcompanies.co.uk)
15 corporate-global-news-pdf-eliminating-single-use-plastic-progress-update-nov2020 (mandarinoriental.com)
16 Green Hotel London | Sustainability | Four Seasons Ten Trinity
17 Hermès financial information | Hermès Finance (hermes.com)
18 Sustainable packaging: Five key levers for impact | McKinsey
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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