The tobacco market is estimated to be valued at $901,361.8 million by 2028, surging from $744,167.80 million in 2020, at a noteworthy CAGR of 2.5%.
Tobacco Market Analysis
Rising prevalence of tobacco products consumptions such as cigarettes, cigars, and snuff among people due to high stress, anxiety, and depression is expected to drive the market of tobacco in the forecast time period. Smoking cigarettes and consuming oral tobacco have become a trend among teenagers and young adults. Many people smoke under the influence of their friends. This factor is anticipated to boost the market growth in the coming years. Also, advertisements and marketing of the tobacco products by the companies are likely to increase the market shares of the tobacco products.
Inclination towards a healthy lifestyle and raised awareness about the harmful effects of tobacco are expected to hinder the market growth of tobacco products in the forecast timeframe. Also, many government bodies have banned various tobacco products. For instance, according to a report published by US. F.D.A (Food & Drug Administration), FDA has announced to ban menthol flavor in cigarettes and ban all flavors in cigars. Such factors are likely to affect the market in the future.
New flavors launched in tobacco products are expected to provide a boost to the growth of the market in the near future. Also, opening of new tobacco sales outlets at various places is projected to flourish the market of tobacco products. Apart from this, the introduction of electronic cigarettes as a substitute of traditional cigarettes in the market is likely to speed up the growth of the market in the future.
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Tobacco Market, Segmentation
The tobacco market is segmented based on product, sales channel and region.
Based on product, the market has been divided into cigarette, smoking tobacco, cigar & cigarillos, and smokeless tobacco sub-segments. Among these, the cigar and cigarillos sub-segment is predicted to have the fastest growing market share in the global market and is register a revenue of $42,057.70 million, with an increase from $29,395.80 million in 2020. This growth is due to the focus of manufacturing companies on new cigar product launches with different flavors like cloves and cardamom in the market to attract the customers. Also, many new cigar shops are planned to open at various places which is anticipated to raise the market growth of the sub-segment in the coming years.
Based on the sales channel, the market is divided into store based retailing and non-store retailing. The store based retailing sub-segment is projected to have the dominating market share and reach $826,183.20 million by 2028 in a time frame of 2021-2028. This growth is attributed the fact that, many convenience stores and small shops are present at various places which has increased the reach of tobacco products such as cigarettes and oral nicotine to the customers. This factor is likely to grow the market in the coming years.
The Asia-Pacific tobacco market accounted $359,433.10 million in 2020 and is projected to register a revenue of $453,385.00 million by 2028. This growth is due to rising population and increased consumption of tobacco among the people due to social influence. Also, major companies are now focusing on developing countries for the marketing of their tobacco products which is further anticipated to register a positive market growth in the next few years.
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Impact Analysis of COVID-19 on the Tobacco Market
The COVID-19 pandemic had a negative impact on the tobacco market. Due to strict lockdown, the raw materials for tobacco product manufacturing were unable to reach the manufacturing units due to which the product manufacturing was delayed. This factor has decreased the market of tobacco products during the pandemic. Also, shutdown of stores and shops negatively impacted the sales of tobacco products. Moreover, many researchers claimed that tobacco consumption is likely increase the risk of COVID-19 infection in the people. For instance, according to a research paper, ‘The Effect of Smoking on COVID-19 Symptom Severity: Systematic Review and Meta-Analysis’, published on September 09, 2020, continuous smoking is clearly associated with severe COVID-19. This factor is likely to impede the market growth in the future.
Key Players in the Tobacco Market
The companies involved in the tobacco market are –
- British American Tobacco
- Japan Tobacco International
- China Tobacco International
- Altria Group
- Imperial Brand Plc.
- ITC Group
- Phillip Morris International
- Swedish Match
- Universal Corporation.
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