The report, produced by Datamonitor, points out that while there is an ever-expanding class of consumers with these higher incomes, the demands for higher quality products are not just limited to the upper echelons.
Equally low income groups are displaying increasing desires for 'aspirational' products and the report claims that both groups can be targeted successfully by using the right marketing strategy.
In both Europe and the US there has been a growing trend towards higher quality food and beverage labels - a phenomenom that is said to have now been adopted by 63 per cent of consumers in this region.
As is often the way in the cosmetics and personal care sector, trends in the food and beverage sector are often as not quickly mirrored. This can now be seen in the rise and rise of organic and natural products in the food and beverage industry, which are being rapidly incorporated into cosmetics and personal care products.
On the back of this Datamonitor estimates that by 2009, specialty personal care sales in Europe and the US are expected to exceed US$6.5 billion.
For both the food and beverage as well as the cosmetics industry, Datamonitor estimates that 20 billion extra premium indulgence occasions will occurr in Europe and the US in 2008 compared to 1998. Bearing this in mind it is becoming increasingly apparent that consumers in these markets are enjoying premium products as part of their daily routines.
Concurrently perceptions of luxury are changing and with more exposure to higher quality goods consumer expectations are rising in all income groups, leading consumers to be far more demanding both in terms of product quality, presentation and functionality.
"Premium offerings must be founded upon superior product attributes, especially in light of the 'democratization of luxury'. Five core factors affect consumers' perceptions of premium value. Those products scoring highly against these dimensions are likely to be perceived as luxurious thereby increasing willingness to pay," the report says.