Report Code : A11180
Tobacco demand has recently shifted from developed regions to developing regions such as Asia and Africa. This can be attributed to the growing population, rising consumer income levels, and tax government regulations.
Aniket Kadam
Research Analyst, Consumer Goods at Allied Market Research
According to a new report published by Allied Market Research, titled, “Tobacco Market by Type, Product, and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2021–2027,”
The tobacco market size is expected to reach $262.8 billion by 2027 at a CAGR of 6.7% from 2021 to 2027.
Tobacco is a plant that contains nicotine, which is a psychoactive (mind-altering) drug that stimulates the brain but also relaxes the central nervous system. Tobacco has been used by humans for many years for a variety of reasons. It has traditionally played an important role in ceremonies and served to mark special occasions for some. Others have used it to boost alertness or to relax and connect with friends and acquaintances at social gatherings.
Tobacco can be smoked, chewed, or sniffed. Cigarettes, cigars, bidis, and kreteks are examples of smoked tobacco products. Some people also use a pipe or hookah to smoke loose tobacco (water pipe). Chewing tobacco, snuff, dip, and snus are all chewed tobacco products while snuff can also be sniffed.
The market is segmented on the basis of type, product, distribution channel, and region. On the basis of type, the market is categorized as virginia, burley, nicotiana rustica, oriental, and others. As per product, it is divided into cigar, cigarette, kretek, snuff, and others. According to distribution channel, it is divided into hypermarkets & supermarkets, convenience stores, specialty stores, and online sales channel. Region-wise, the tobacco market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. By considering these segments, the tobacco market analysis is done effectively.
Various types of tobacco available in the market include aromatic fire-cured, latakia, cavendish, corojo, criollo, dokha, habano, maduro, perique, and shade tobacco.
The tobacco market forecast is accomplished by considering fastest growing and largest segments. By type, the burley tobacco segment was the highest revenue contributor in 2019, as it contains some amount of sugar and has better taste as compared to other types of tobacco. By product, the cigarette segment held the largest tobacco market share due to constant product innovation in terms of flavor, size, ingredients, and nicotine level of cigarettes. Depending on the distribution channel, the specialty stores segment led the market, owing to availability of large variety of tobacco in these stores.
Globally, the number of smokers has been increasing. This trend is being accelerated by the introduction of new products such as clove cigarettes and menthol cigars. These factors are expected to drive the market over the next few years.
Furthermore, with consumers gradually shifting toward smoking alternatives in recent years, the introduction of innovative tobacco products in a variety of flavor options has become critical. As a result, manufacturers have shifted their focus to premium tobacco products made from flue-cured tobacco and fine whole leaf.
The introduction of numerous premium tobacco products by manufacturers, such as flavored, long & skinny, colored, and e-cigarettes, has created a strong outlook for the tobacco market growth. Increased investment in R&D has resulted in the introduction of products with lower levels of toxicants. This has aided in attracting a larger consumer base for tobacco products.
Higher levels of education as well as growing awareness about health concerns related to tobacco consumption, such as various types of cancers, cardiovascular diseases, and pulmonary diseases, has hampered the market growth. In addition, stringent regulations in developed countries further limit the market growth.
The major drivers of the tobacco market are surge in consumer knowledge and increased awareness of products & services through digital media and other sources combined with the advent of social media, which are educating consumers about the benefits of organic products. As a result, the demand for tobacco products is increasing. Furthermore, companies offering these products are increasing their investments in R&D, marketing, and expanding their distribution channels to maintain their market position.
The increased focus of market players on targeting young consumers through the launch of flavored cigarettes and tobacco products will support the regional market growth. Furthermore, leading tobacco manufacturers have implemented plans to improve retail infrastructure and brand campaign strategies.
There is strong evidence that smoking is linked to negative outcomes and increased COVID-19 severity. Smokers are more likely to contract coronavirus infection than nonsmokers. Smoking may also increase the risk of COVID-19 by increasing the enzymes that allow the virus to enter and damage lung cells. As a result, the consumption of tobacco was reduced during 2020, which had a negative impact on the market growth.
Product launches, mergers & acquisitions, joint ventures, and geographical expansions are key strategies adopted by players in the tobacco industry. The key players in the global tobacco market include Altria Group, British American Tobacco, Eastern Co. SAE, Imperial Brands, ITC Ltd., Japan Tobacco International, KT&G, PT Gudang Garam Tbk, Scandinavian Tobacco Group, and Swisher.
Key findings of the study
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Tobacco Market by Type (Virginia, Burley, Nicotiana Rustica, Oriental, and Others), Product (Cigar, Cigarette, Kretek, Snuff, and Others), and Distribution Channel (Hypermarkets & Supermarkets, Convenience Stores, Specialty Stores, and Online Sales Channel): Global Opportunity Analysis and Industry Forecast 2021–2027
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