Tobacco Market Analysis APAC, Europe, North America, Middle East and Africa, South America - China, US, Germany, Japan, UK - Size and Forecast 2024-2028

Tobacco Market Size 2024-2028

The global tobacco market size is estimated to grow by USD 217.9 billion at CAGR of 4.6% between 2023 and 2028. The top tobacco-producing countries include China, Brazil, and India. Cigarettes are the most widely consumed product worldwide. Some countries have implemented strict regulations on tobacco advertising and packaging. The growing popularity of e-cigarettes has impacted the traditional market in recent years. This tobacco market research and analysis report includes in-depth information about the market drivers, trends, and challenges during the forecast period.

Tobacco Market Share

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Tobacco Market Segmentation

The tobacco market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Distribution Channel Outlook 
  • Offline
  • Online
• Product Outlook 
  • Combustible products
  • Smokeless products
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

By Distribution Channel

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, including hookah tobacco, 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 644.40 billion in 2018 and continued to grow until 2022. In the offline segment, most 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 industrial vending machines, this segment is expected to contribute to the growth of the tobacco market during the forecast period.  

Regional Analysis 

APAC is estimated to contribute 62% to the growth of the global tobacco 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 duration.

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 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 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 tobacco market growth during the forecast period. In the MEA region, the Saudi Arabia tobacco market is one of the leading contributors to overall market growth.

Tobacco Market Dynamics

The market continues to evolve with various drivers and trends shaping its trajectory. One significant driver is the growing popularity of next-generation products (NGPs) like electronic cigarettes, which appeal to a global consumer base seeking alternatives to traditional tobacco consumption. Additionally, the emergence of new product ranges, including flavored cigars and kretek, caters to diverse consumer preferences, driving market expansion and revenue growth. Furthermore, increased awareness and regulatory measures by organizations such as the Center for Disease Control and Prevention (CDC) contribute to shifting trends in tobacco usage, particularly among youth populations.

This heightened awareness, coupled with concerns about health impacts associated with traditional tobacco consumption, drives demand for smokeless tobacco and nicotine alternatives like snuff or nicotine gums. Moreover, the market benefits from the purchasing power of consumers in developed and wealthy countries, where per person revenue and total population figures support sustained demand for tobacco products. Additionally, the use of environmentally friendly materials like jute and paper in packaging, alongside efforts to reduce plastic usage, aligns with growing consumer preferences for sustainable products. Overall, the tobacco market's evolution is characterized by a balance between traditional products and emerging alternatives, driven by shifting consumer preferences, regulatory dynamics, and environmental consciousness. As the industry navigates these trends, adaptation and innovation will be key to sustaining growth and meeting evolving consumer demands.

Key Market Driver 

The market is experiencing significant growth driven by rising demand for cigars and smoking products worldwide. With constant product innovation and evolving consumer preferences, cigars have witnessed increased popularity across developed and wealthy countries such as Germany, France, Italy, Australia, and the UK. The availability of diverse cigar types, including Cuban and Caribbean cigars, has expanded consumer choices for smoking accessories, further fueling tobacco market demand. Moreover, the premiumization trend within the cigar category contributes to tobacco market growth, attracting consumers seeking high-quality and luxury smoking experiences.

Furthermore, smoking products like pipe tobacco and shredded tobacco products are gaining traction in various regions, including Germany, France, the UK, Australia, Belgium, the Netherlands, and Canada. This diversification of smoking options caters to different consumer preferences and contributes to overall market expansion. As the global consumer base continues to grow, driven by factors such as changing demographics and lifestyle choices, the demand for tobacco products such as Heat-Not-Burn tobacco products is expected to remain strong, driving tobacco market growth in the foreseeable future.

Significant Market Trends

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 them 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 tobacco market growth during the forecast period.

Major Market Challenges 

The increasing popularity of substitutes is challenging the tobacco industry's growth. The market faces intense competition from alternatives 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 them in several countries around the world are driving consumers to seek smokeless and safer alternatives. Consumer interest in traditional ones is declining due to the increased adoption of NGPs by suppliers in various countries. Therefore, these challenges are expected to hinder tobacco market growth during the forecast period.

Key Tobacco Market Companies & Market Insights

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.

Altria Group Inc: The company offers tobacco under brands such as Basic, Daves, and Marlboro.

The tobacco market  growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

British American Tobacco Plc, Eastern Co. SAE, Gold Leaf Tobacco Corp., Golden Tobacco Ltd., Gudang Garam Tbk, Imperial Brands Plc, ITC Ltd., Japan Tobacco Inc., KT and G Corp., Modi Enterprises, Poschl Tabak GmbH and Co KG, PT Djarum, Pyxus International Inc., Scandinavian Tobacco Group AS, Swedish Match AB, Swisher International Inc., Universal Corp., VECTOR GROUP LTD., and Vietnam National Tobacco Corp.

Market analysis and report of 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.

Market Analyst Overview

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 items like IQOS and next generation products (NGPs). Amid changing consumer preferences and increasing awareness, Millennials are turning towards alternatives such as vapor. 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 continues to evolve with diverse offerings and shifting consumer preferences. With variants like Burley and rustica tobacco, the market caters to a global consumer base of over 36 million people. From traditional forms like cigarettes and cigars to emerging products like electronic cigarettes, the industry witnesses ongoing innovation and marketing campaigns to capture consumer attention. Despite concerns about physical and psychological dependence, tobacco consumption remains prevalent, especially in developed and wealthy countries.

Marketing spenders invest heavily in advertising and promotion, targeting various demographics and capitalizing on partying and pub culture. Additionally, merger and acquisition activities reshape the landscape, facilitating the introduction of new product ranges and next-generation products (NGPs). However, the industry faces scrutiny over health concerns associated with tobacco usage, including smokeless tobacco and flavored cigarettes. Regulatory bodies like the Center for Disease Control and Prevention (CDC) monitor tobacco consumption trends and advocate for tobacco control measures. Moreover, environmental considerations, such as farming costs and pesticide residues, impact production practices and export activities. As the market navigates challenges like e-commerce regulation and health awareness, industry players seek to balance profitability with societal concerns, driving ongoing discussions and developments within the tobacco industry. The tobacco industry encompasses a wide array of products, from traditional cigarettes to hookahs and chewing tobacco, each derived from various Nicotiana species. Nicotiana rustica, known for its high nicotine content, is commonly used in products such as cigars wrapped in paper boxes and cheroots.

Labour activities play a significant role in tobacco production and processing, with workers involved in tasks ranging from planting and harvesting to curing and packaging. Despite concerns over heavy metals and tobacco-specific nitrosamines (TSNAs) in tobacco products, the industry continues to thrive, driven by factors such as cigarette advertising and promotion and the popularity of flavored and menthol cigarettes. The cultivation of tobacco requires vast hectares of land, with countries like those in the Oriental region known for producing high-quality tobacco varieties like burley and flue-cured. These raw tobacco leaves undergo processing to create smoking tobacco and homogenized products like cigars and bidi tobacco. In recent years, the rise of e-commerce websites has transformed the tobacco market, allowing consumers to purchase products conveniently online. Generation Z, in particular, has shown interest in alternative tobacco products like hookahs and flavored cigarettes, contributing to changes in consumer preferences and consumption patterns. As the tobacco industry evolves, stakeholders closely monitor trends and developments, with organizations like Industry ARC providing insights into tobacco market dynamics and export costs. Despite regulatory challenges and public health concerns, the tobacco industry remains a significant contributor to economies worldwide, with country tobacco production continuing to play a vital role in global markets.

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What are the Key Data Covered in this Tobacco Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2028
• Precise estimation of the size of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Market growth analysis industry across APAC, Europe, North America, Middle East and Africa, and South America
• Thorough market forecast analysis of the market's competitive landscape and detailed information about companies
• Market forecasting of factors that will challenge the growth of market companies

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