The global tobacco market was valued at $183.1 billion in 2019 and is estimated to reach $262.8 billion by 2027, registering a CAGR of 6.7% from 2021 to 2027. Tobacco is a common name for the plant Nicotiana tabacum and, to a lesser extent, Aztec tobacco (Nicotiana Rustica). The cured leaf is used for smoking, chewing, snuffing, and nicotine extraction after maturation and processing in various ways. Other Nicotiana species, collectively known as flowering tobaccos, are grown as ornamentals. Tobacco consumption in any form stimulates brain functions, raises blood pressure, constricts peripheral blood vessels, and increases heart rate. At the same time, tobacco consumption in any form can pose health risks and affect a large population of passive smokers globally. Tobacco contains alkaloids that are highly addictive, making it difficult to quit. Despite consumer awareness of the health effects of tobacco use, the tobacco industry is gaining traction due to the addictive nature of the product.
Innovative product marketing strategies used by industry players to attract more consumers, or rather target potential consumers, primarily the youth population, are driving the market growth. The use of automated techniques in the manufacturing of tobacco products combined with the rise of online retailing is expected to drive the global tobacco market. The extensive use of dried tobacco for smoking in cigars, cigarettes, pipes, and shisha as snuff, chewing tobacco, dipping tobacco, and snus is expected to drive the tobacco market growth in the coming years.
Due to the consumer notion that cigarettes decrease tension and anxiety, a rise in disposable income and fast-paced lifestyles have resulted in an increase in market demand for cigarettes. Compared to other tobacco products, cigarettes are easier to dispose of, may be consumed quickly, and their odor is less overpowering. The demand for combustible cigarettes is anticipated to increase during the projected period due to the growing popularity of flavored cigarettes, which are available in a variety of flavors.
The market is expanding as a result of creative product marketing techniques utilized by market participants to draw in more consumers, or rather, target potential consumers, who are mainly young people. The global tobacco market is anticipated to grow due to the usage of automated manufacturing processes and the expansion of online retailing. In the next years, the market expansion is anticipated to be driven by the widespread usage of dried tobacco for smoking in cigars, cigarettes, pipes, and shisha as well as snuff, chewing tobacco, dipping tobacco, and snus.
Smoke, chew, or smell tobacco. Bidis, kreteks, cigars, and cigarettes are examples of smoked tobacco products. Some people also consume loose tobacco (water pipe) using a pipe or hookah. Snuff can also be smelled, while other chewed tobacco products include dip, snus, and chewing tobacco. During the projection period, all of these tobacco product types are anticipated to fuel market expansion.
However, a medically recognized alternative to cigarette use for acquiring nicotine is nicotine replacement treatment. It is used to help people stop chewing tobacco or smoking cigarettes. By drastically reducing cravings, nicotine replacement therapy can end the mental dependence on tobacco-based goods. Growing public knowledge of the high rate of effectiveness of nicotine replacement therapies, including patches, lozenges, gum, and other products, may in some ways restrain market expansion.
More than 4,000 chemicals—250 of them hazardous and 60 of them known carcinogens—are present in tobacco smoke. There are 28 recognized carcinogens in chewable forms. Up to 50% of male cancer cases and 25% of female cancer cases globally are attributed to tobacco smoking. 80% of lung, head, and neck cancers, which are most prevalent in underdeveloped nations, are brought on by tobacco use. During the anticipated term, the market is anticipated to suffer from all of these negative effects.
On the other hand, compared to traditional smoking, smokeless tobacco products like chewing tobacco, snus, and dissolved tobacco are less common, but the market has grown significantly over the years thanks to advantages like the addition of flavors like peach, apple, honeydew, strawberry, pineapple, honeysuckle, champagne, and prune. The consumption of tobacco was disproportionately concentrated among several demographic groups, such as men and rural dwellers, and the distribution of smokeless tobacco was significantly skewed. Recently, new demographics like the wealthy and young have adopted it.
Government efforts to restrict cigarette consumption by increasing cigarette pricing and levying more taxes are anticipated to present a lucrative opportunity for the growth of the tobacco business.
For instance, the upcoming tax increases in Japan and India will significantly affect the sales of conventional cigarettes, opening up a large window of opportunity for the development of smokeless tobacco products. In Asia-Pacific, India is a significant market for smokeless tobacco. Despite the fact that some types of smokeless tobacco are prohibited in India, rural areas have a high rate of use. According to reports, China is currently the world's largest manufacturer of smokeless tobacco, and it will likely retain its lead in future market expansion.
Nicotine replacement therapies significantly reduce cravings and physical withdrawal symptoms, therebybreaking the mental addiction to tobacco-based products. Growing awareness of the high success rate of nicotine replacement therapies, such as patches, lozenges, gums, and other products, may limit the market growth to some extent.
The COVID-19 crisis has threatened the tobacco companies. The first quarter's sales were disappointing, and many stores were closed. Despite the fact that many industries are suffering as a result of the COVID-19 crisis, with several sectors experiencing a drop in consumer demand, the tobacco market is expected to emerge undaunted and grow rapidly.
Segmental Overview
The global tobacco market is segmented on the basis of type, product, distribution channel, and region. On the basis of type, the market is categorized into virginia, burley, nicotiana rustica, oriental, and others. As per product, it is divided into cigar, cigarette, kretek, snuff, and others. According to distribution channel, the tobacco market is fragmented into hypermarkets & supermarkets, convenience stores, specialty stores, and online sales channel. Region-wise, the market is analyzed across North America (the U.S., Canada, and Mexico), Europe (the UK, France, the Netherlands, Germany, Turkey, and rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, and rest of Asia-Pacific), and LAMEA (Brazil, South Africa, the UAE, and rest of LAMEA).
By Type
On the basis of type, the market is classified into virginia, burley, nicotiana rustica, oriental, and others. The burley segment accounted for a major share of the Tobacco market in 2019 and is expected to grow at a significant CAGR during the forecast period. For usage in goods like American blend cigarettes, Burley has little sugar and is sweetened with humectants, sweeteners, or other flavors. Burley tobacco is hence frequently consumed throughout. It is produced across a belt of eight states in the United States, with Kentucky providing around 70% of the total. 20% of the overall production is produced in Tennessee, with lesser percentages in Indiana, North Carolina, Missouri, Ohio, Virginia, Maryland, Pennsylvania, and West Virginia. The three most significant nations where burley tobacco is grown are Brazil, Malawi, and Argentina.
By Type
Burley segment is expected to grow at highest CAGR of 7.9% during the forecast period
By Product
On the basis of product, the market is categorized into cigar, cigarette, kretek, snuff, and others. The cigarette segment accounted for a major share of the tobacco market in 2021 and is expected to grow at a significant CAGR during the forecast period. A few of the main causes influencing the tobacco market's growth are the shift in consumer lifestyles, ongoing product innovation in terms of flavor, size, ingredients, and nicotine content, and the customer perception that smoking lowers tension and anxiety. Consumer education on the advantages of organic products is being aided by greater consumer knowledge, increased awareness of goods and services thanks to digital media and other sources, and the emergence of social media. As a result, there is a growing market for natural and organic cigarettes.
By Product
Cigarette segment is expected to grow at highest CAGR of 8.0% during the forecast period.
By Distribution Channel
On the basis of distribution channel, the market is bifurcated into hypermarkets & supermarkets, convenience stores, specialty stores, and online sales channel. The specialty stores segment accounted for a major share of the tobacco market in 2019 and is expected to grow at a significant CAGR during the forecast period. Consumers all over the world have included shopping in their daily routines since they typically want to research and test a product before making a purchase, which has boosted cigarette sales in specialty stores. Specialty shops give their customers high-quality customer care, thorough product descriptions, and knowledgeable advice, all of which help to increase sales of these goods. Additionally, these shops advertise the sales of both national and private label items in their establishments. Vouchers and discount programs are popular for establishing a solid brand identity and drawing in a sizable consumer base, which accelerates market expansion. Furthermore, specialty shops run promotional programs with coupons and discounts to entice clients and generate foot traffic. These efforts help to build the brand's reputation and boost sales.
By Distribution Channel
Specialty Stores segment is expected to grow at highest CAGR of 7.9% during the forecast period.
By Region
On the basis of region, the tobacco market is segmented into North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific Tobacco market accounted for a major share of the Tobacco market in 2019 and is expected to grow at a significant CAGR during the forecast period. Most tobacco is grown in the southern states of India in the Asia-Pacific area, where the climate is ideal. Due to their accessibility, practicality, affordability, and enjoyable experience, cigarettes are the most widely used tobacco product. One of the most reliable sources of tax revenue for governments in the Asia-Pacific region is the sale of cigarettes. The development of a sizable and expanding illegal cigarette trade, which is estimated to account for a sizable revenue share of the global tobacco market, has been aided by rate differences between markets, strict regulatory changes, and broader macroeconomic pressures experienced by various countries in the Asia-Pacific region.
By Regions
Asia-Pacific dominates the market and is expected to grow at highest CAGR of 7.4% during the forecast period.
Competitive Analysis
The key leading players operating in this 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 Swishe. The key players have adopted various strategies such as expansion to increase their market share.
Some Examples of Product Launch in the Global Tobacco market
- In February 2021, Japan Tobacco Inc. (JTI) introduced a new operating model to further strengthen the competitiveness and profitability of its tobacco business. The changes include the consolidation of its current international and Japanese-domestic tobacco businesses into one tobacco business as well as the optimization of its operations in the Japan market. These new initiatives will firmly position the JT Group (JTG) to best address the changes in its operating environment to achieve long-term profitability and sustainable growth.
- In February 2021, Imperial Brands expanded its Embassy Signature range with a New Crush variant for ex-crushball smokers. It has been designed specifically for ex-crushball smokers looking for premium nicotine solutions at a competitive price and features a modern blend of the finest Virginia tobaccos wrapped in premium paper with a unique cooling sensation filter.
- In January 2021, British American Tobacco launched its first CBD vaping product, VUSE CBD Zone. This latest innovation will be allowed for the first time to offer adult consumers a range of high-quality CBD vaping products from trusted, global brand, VUSE. This new range is available in three e-liquid flavors, mint, mango, and berry; and two strengths, 50mg and 100mg.
Some Examples of Expansion in the Global Tobacco market
- In March 2021, Swisher, a category leader in adult consumer lifestyle brands, expanded its partnership with Alternative Solutions (EAS) to support the marketing, sales, and distribution of EAS’s Leap and Leap Go vapor brands. Both companies will remain separate entities with EAS benefitting from the additional support and strength of Swisher’s world-class sales and marketing organization.
- In March 2021, KT&G Corp. establishes a local subsidiary in Taiwan, which strengthened its mid- to long-term business base. It is stepping up efforts to strengthen its competitiveness in the Taiwan market.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of current trends, estimations, and dynamics of the global tobacco market from 2021 to 2027 identify the prevailing market opportunities.
- Porter’s five forces analysis highlights the potency of the buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier–buyer network.
- In-depth analysis of the market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global industry. The market player positioning segment facilitates benchmarking while providing a clear understanding of the present position of the key market players.
- The report includes analyses of the regional as well as global market, key players, market segments, application areas, and growth strategies.
Tobacco Market Report Highlights
| Aspects | Details |
 By TYPE |
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 By PRODUCT |
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 By DISTRIBUTION CHANNEL |
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 By Region |
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 Key Market Players | Scandinavian Tobacco Group, ITC Ltd., KT&G Corporation, Swisher, Altria Group, Inc., PT Gudang Garam Tbk, British American Tobacco plc, Imperial Brands plc, Eastern Co. S.A.E., Japan Tobacco International |
Analyst Review
Tobacco is extracted from its leaves, which are dried and fermented before being used to make tobacco products. Tobacco contains nicotine, an ingredient that can lead to addiction, due to which many smokers struggle to quit.
The key factors driving the growth of the global tobacco market are rise in smoking rates and stable demand for tobacco products. Despite stringent regulations and restrictions aimed at reducing tobacco consumption in various countries, the tobacco market is expected to grow over the forecast period due to rise in prices.
Tobacco is a significant source of tax revenue for governments across the world. Attributed to tax regulatory environments, developing economies are now supporting the market growth. Cigarettes have been identified as the most popular tobacco product due to a variety of factors such as convenience and cost-effectiveness as compared to other types of tobacco products.
The tobacco market is consolidated, with a few large players accounting for a considerable share of the global market. Moreover, new entrants in the tobacco market are discouraged by regulatory barriers.
Asia-Pacific, led by China and India, is one of the world's largest producers and consumers of tobacco. The region is home to some of the world's largest tobacco companies, including Japan Tobacco Inc., PT Gudang Garam Tbk, and ITC Limited. China is the region's largest market, with a sizable proportion of its population using tobacco products.
The inclusion of tobacco taxes in regulations in countries, such as India, ban on consumption of tobacco products in public places, and rise in availability of tobacco products in modern retail outlets in the region are factors that are actively affecting the growth of the tobacco market.
The global tobacco market size was valued at $183.1 billion in 2019, and is estimated to reach $262.8 billion by 2027, registering a CAGR of 6.7% from 2021 to 2027. The market value of Tobacco Market Report is $5,769 for single user pdf.
The top companies operating in the global tobacco market are 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.
The sample report of global shrimp market is available on Allied Market Research website on request.
The CAGR of Tobacco Market is 6.7% from 2021 to 2027.
The base year calculated in the Tobacco Market report is 2019.
The global tobacco market is segmented on the basis of type, product, distribution channel, and region. On the basis of type, the market is categorized into virginia, burley, nicotiana rustica, oriental, and others. As per product, it is divided into cigar, cigarette, kretek, snuff, and others. According to distribution channel, the tobacco market is fragmented into hypermarkets & supermarkets, convenience stores, specialty stores, and online sales channel. Region wise, the market is analyzed across North America (the U.S., Canada, and Mexico), Europe (the UK, France, the Netherlands, Germany, Turkey, and rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, and rest of Asia-Pacific), and LAMEA (Brazil, South Africa, the United Arab Emirates, and rest of LAMEA).
The forecast period of the tobacco market in the report is 2021-2027.
Asia-Pacific holds the maximum market share of the Tobacco Market.
Businesses are expected to suffer as a result of the COVID-19 pandemic throughout 2020 and into 2021. However, the tobacco products market is expected to recover from the shock over the forecast period because it is an unpredictable event unrelated to ongoing or fundamental weaknesses in the market or the global economy.
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