| “The launch of cheaper heating tobacco devices is likely to appeal to an increasingly wide audience among adult smokers” Raphaël Moreau, senior analyst at Euromonitor International and speaker at InterTabac 2023. |
| InterTabac is the world’s largest trade fair for tobacco products and smoking accessories. In the run-up to the start of the trade fair on 14 September 2023, Raphaël Moreau talks about current trends, economic developments and the influence of new products on global sales markets. This fall, he will be a guest speaker at the world’s leading trade show.How have cigarettes sales evolved globally and what are the main geographic differences in their growth trajectory? World cigarette sales declined by 350 billion sticks (legal and illicit) between 2016 and 2021. While eight markets saw declines of over 10 billion sticks, only three markets, Brazil, China and Egypt, saw increases of over 10 billion, led by China with a rise of over 30 billion sticks, showing a resilient performance throughout the COVID-19 pandemic. Developed economies have seen the steepest falls in cigarette sales, led by Japan, with a decrease of 80 billion sticks or a 12% drop, largely as a result of a major shift towards heated tobacco products (HTP). Cannibalisation by heated tobacco appears to have driven more than 50% of the cigarette sales decline in Japan, a trend seen in other developed markets including New Zealand. However, in most markets, the majority of the decline in cigarette sales remains driven not by the shift to other categories but by the market environment, notably the regulatory frameworks, excise increases and socio-economic factors including increased costs of living and socio-cultural trends.  Are heated tobacco products expected to continue playing a growing role among alternatives to cigarettes? The recent launches of more affordable heated tobacco devices are expected to appeal to an ever-wider audience among adult smokers who would otherwise continue to smoke cigarettes. Philip Morris International (PMI) added the more affordable IQOS Iluma One to its offering in Europe in 2023 following its launch in Switzerland in the second half of 2022. The company also launched a more affordable version of its heated tobacco product, BONDS by iQOS, in the Philippines in late 2022. These launches will play a key role in contributing to PMI’s target of generating over 50% of its revenues from smoke-free products by 2025. Competition in heated tobacco products is expected to become more intense in 2023, following the launch of the aggressively priced Hyper X2 devices by BAT (British American Tobacco) in late 2022 and early 2023 across global markets.   Is the rise of single use devices likely to continue in 2023 and beyond? Among e-vapour products, 2022 saw an exponential growth for closed system single use, which were previously niche, thanks to their wider availability and low prices. Following the emergence of the Puff Bar brand in 2020, the category was also fuelled by the rapid rise of Elfbar. As this growth is largely driven by a growing popularity among teenagers to whom they appeal thanks to a wide variety of fruity flavours, this has raised alarm among health authorities and is likely to lead to pressures to create a more restrictive legal framework for these products. The opaque chemical composition of the liquids and the use of synthetic nicotine, for which no health studies are available, also add to these concerns among health authorities. In addition, a piece of legislation covering the design, production and recycling of batteries was proposed by the European Commission in 2022 aiming for a potential ban of single-use, non-rechargeable battery devices, potentially making such devices illegal. Despite these uncertainties, the launch of Vuse Go by British American Tobacco (BAT) across Europe in early 2023 highlights the incentive for the largest tobacco players to enter the category, even under the scenario in which its current boom proves to be short-lived. Among nicotine products which have been making headlines recently, are tobacco pouches also likely to see a regulation clampdown? Although tobacco pouches may also face increased scrutiny from regulators, they are likely to fare comparatively better than closed-system single-use, not least because they do not seem to be associated so strongly with consumption by teenagers. Also, their sustainability credentials are not so much of an issue. Following the completion of the acquisition of Swedish Match in 2022, PMI has ambitious plans for the Zyn brand, notably with recent product launches, with Zyn Pearls introduced in November 2022. The new range contains hundreds of coated micro pearls carrying nicotine and flavouring as filler inside the pouch in order to deliver a more rapid and more intense release of nicotine and flavouring. Scandinavian Tobacco Group has become the latest tobacco major to venture into nicotine pouches in late 2022, under the Ström brand in the UK. Made with a resin-based formula, Ström is a plant-based product with strong sustainability credentials, with a container of pine oil extracted from pine residues and thus stands for sustainability. |
Help keep news FREE for our readers
Supporting your local community newspaper/online news outlet is crucial now more than ever. If you believe in independent journalism, then consider making a valuable contribution by making a one-time or monthly donation. We operate in rural areas where providing unbiased news can be challenging. Read More About Supporting The West Wales Chronicle
