Industry Insights That Could Impact Your Tobacco Business

In 2016, the size of the tobacco market in the US was $100.3 billion and the size is estimated to increase further throughout the next 10 years.

Growing disposable income of consumers and the accessibility of products such as pipes and custom-made e-cigarettes are pushing the growth of the market. Also, tobacco products’ demands are being elevated by their growing consumption by the female and youth population.

A lot of health benefits are derived from smoking tobacco. As an example: according to a research by the American Journal of Epidemiology, the risk of the Parkinson’s disease can be reduced by smoking tobacco. Also, smoking tobacco in its various forms is believed to ease stress levels.

The handiness of superior merchandises such as vapor products, e-cigarettes, and pipes is also enhancing the growth of the market. Earlier, smoking tobacco was regarded as a masculine practice, but there is a current adoption of smoking by the female populace due to globalization.

Also, tobacco enterprises are offering different variants of tobacco products. Now available for women and men are different flavors of various kinds of cigarettes. Strict government regulations as to tobacco manufacture and circulation may, yet, slow the growth of the market.

In addition, the growth of the market might be hampered by the growing consciousness of health and the initiatives of the government to combat diseases that are tobacco-related.

  1. Insights Regarding Product Type

The US market is dominated by the cigarettes segment. These segment was in 2016 valued at $83.3 billion and is expected to grow at a compound annual growth rate of 1.4% over the next 10 years. The market growth was being driven by the nonexistence of tobacco-free substitutes.

However, the segment anticipated to be the fastest-growing over the next decade is the smokeless tobacco division. These products are obtainable in different sorts such as nicotine discs, nicotine patches, tobacco chews and others.

Also, because it is taken via the mouth and prevents one from eating in the process of its consumption, chewing tobacco is believed to suppress appetite and thus, helpful for weight loss. The segment is expected to reach $9.5 billion by 2025, growing at 4.2% CAGR over the next decade.

  1. Regional Insights

 The being of big tobacco businesses such as Altria Group Inc., Philip Morris International, and Reynolds American Inc., drives the growth of the market in North America. New technology has also allowed companies to come up with market-boosting substitutes in the region.

Accessibility of tobacco products in the US through several other distribution networks such as tobacco specialists, vending machines, and online portals is also enhancing the growth of the market. Market growth may, however, be slowed down by strict government regulations.

  1. Insights Regarding US Tobacco Market Share

 Among others, the major participants in the industry include the three companies mentioned above as well as Japan Tobacco Inc. and Imperial Brands.

These key industry players are concentrating on joining forces with other players. They are also making massive R&D investments to develop pioneering solutions that will give them a competitive advantage over the others.

Some companies are undertaking mergers and acquisitions in order to get a competitive advantage.