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The global tobacco market is valued at approximately USD 173.03 billion, exhibiting a CAGR of 3.84% between 2022 and 2027. The top tobacco-producing countries include China, Brazil, and India. Cigarettes are the most widely consumed tobacco product worldwide. Some countries have implemented strict regulations on tobacco advertising and packaging. The growing popularity of e-cigarettes has impacted the traditional tobacco market in recent years. This market research and analysis report includes in-depth information about the market drivers, trends, and challenges during the forecasted period.
Rising demand for cigars and tobacco products is notably driving the growth of the market share. The demand and popularity of cigars and smoking tobacco products have increased in recent years around the world. Constant product innovation and changing consumer preferences are the main reasons for the increasing demand around the world.
Cigar's popularity has increased significantly in Germany, France, Italy, Australia, and the UK. Additionally, the availability of different types of cigars, such as Cuban cigars and Caribbean cigars, has given consumers more choices. Moreover, the premiumization of the cigar category is a major growth driver expected to have a positive impact on the growth of the market during the forecast period. Smoking products such as pipe tobacco and shredded tobacco products are gaining traction in Germany, France, the UK, Australia, Belgium, the Netherlands, and Canada. Therefore, increasing demand for cigars and other products is expected to boost the growth of the market during the forecast period.
The increasing use of automated techniques in manufacturing products is a key trend influencing the growth of the market. The regular introduction of advanced technology has helped major players in the market to automate their manufacturing processes. Automated manufacturing processes have enabled marketers to reduce labor costs by eliminating labor-intensive traditional manufacturing techniques. Selling RYO cigarettes for commercial use through retail outlets has become a new trend in the market. In this case, customers can purchase loose tobacco and tobacco or cigar paper and use the retailer's on-site automated machine to roll cigarettes or small cigars. This has increased consumer interest and increased demand for these products in fine cuts.
The growing popularity of machine-made clove cigarettes in Indonesia is another example of consumers' preference for more sophisticated products. All this will boost the market growth during the forecast period.
Market Challenges
The increasing popularity of substitutes is challenging the tobacco industry's growth. The market faces intense competition from alternative products such as e-cigarettes, heat-not-burn (HNB) products, vaping products, and other next-generation products (NGP). Additionally, nicotine replacement therapy products such as lozenges, chewing gum, nasal sprays, and inhalers have emerged as suitable alternatives. Growing health awareness among consumers and rising cancer cases attributed to smoking these products in several countries around the world are driving consumers to seek smokeless and safer alternatives. Consumer interest in traditional products is declining due to the increased adoption of NGPs by suppliers in various countries. Therefore, these challenges are expected to hinder market growth during the forecast period.
APAC is estimated to contribute 54% to the growth of the global market during the forecast period.
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Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
China, Indonesia, India, Japan, Australia, South Korea, Bangladesh, Philippines, Taiwan, and Malaysia are the largest markets in APAC. Additionally, the market is highly volatile due to the presence of a large number of regional and global Companies. It has formed a major category among all products consumed in the Asia-Pacific region.
Additionally, consumption of smoked tobacco products such as RYO cigarettes and pipe tobacco is increasing in APAC, mainly in markets such as Australia, India, Japan, and South Korea. With the growing popularity of cigars and smoking tobacco products and the increasing number of organized retail outlets in APAC, making these products easily accessible and available to APAC consumers is a major growth driver that has a positive impact on market growth.
The market share growth by the offline segment will be significant during the forecast period. The Offline segment includes all traditional fixed retail channels through which these products are sold. These channels include convenience stores, supermarkets, hypermarkets, tobacconists, and gas stations. These companies sell their products through vending machines and other automated kiosks.
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The offline segment was valued at USD 625.31 billion in 2017 and continued to grow until 2021. In the offline segment, most tobacco sales come from convenience stores and supermarkets, where cigarettes and other products are commonly placed near cash registers to encourage impulse purchases. These retailers often offer discounts and promotions to attract customers and increase sales. In addition, speciality shops and petrol stations are popular retail channels, especially in rural areas. Offline sales channels also provide opportunities for companies to sell directly to consumers through in-store displays and promotions. These companies often invest heavily in branding and packaging to create brand loyalty and increase product appeal. With a large market share and sales of these products from traditional offline retail outlets such as convenience stores, supermarkets, tobacconists, gas stations, and vending machines, this segment is expected to contribute to the growth of the global market during the forecast period.
Targeted advertising strategies, particularly aimed at enticing youth, underscore the industry's efforts to secure future consumers. Controversies surrounding menthol in tobacco products persist, prompting discussions about its appeal and regulatory implications. Meanwhile, events serve as platforms for promotional activities, while fluctuating prices influence consumer behavior and brand loyalty.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. The industry, anchored by significant players like Philip Morris and other big companies, thrives on a network encompassing tobacco farming, cultivation, packaging, and trade. The cultivation of tobacco plants and their subsequent farming are critical facets, with meticulous care taken at each stage to yield quality tobacco. These raw materials undergo an intricate process of packaging, where various cigarette brands and products are meticulously assembled, reflecting branding strategies crucial to the industry's success.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The Global Tobacco Market continues to be influenced by various factors, including Nicotine addiction and regulatory interventions from organizations like the World Health Organization and the Federal Trade Commission. Leading brands such as Marlboro, Newport, and Camel dominate the market, while companies like Phillip Morris International and British American Tobacco strive to innovate with products like IQOS and Next Generation Products (NGPs). Amid changing consumer preferences and increasing awareness, Millennials are turning towards alternatives such as vapor products. Distribution channels have diversified, encompassing supermarkets/hypermarkets and online platforms. Despite regulations and the rise of product substitutes, cigarettes remain a significant segment in the market.
The market research and growth report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Tobacco Market Scope |
|
Report Coverage |
Details |
Page number |
161 |
Base year |
2022 |
Historic period |
2017 - 2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 3.84% |
Market growth 2023-2027 |
USD 173.03 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
3.56 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 54% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Altria Group Inc., British American TobaccoPlc, Eastern Co. SAE, Gold Leaf TobaccoCorp., Golden TobaccoLtd., Gudang Garam, Imperial Brands Plc, ITC Ltd., KT and G Corp., Modi Enterprises, Poschl Tabak GmbH and Co KG, PT Djarum, Pyxus International Inc, Swedish Match AB, Swisher International Inc., Universal Corp., Vector Group Ltd., and Vietnam National TobaccoCorp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Distribution Channel
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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