Tobacco in the US
Euromonitor International's Tobacco in the US market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
Buy online to access strategic market analysis and an interactive statistical database of duty paid retail volume and value sales, illicit trade volume, company and brand shares, pricing, distribution and production data.
Tables: 83 | Publication date: Nov 2007
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Cigarettes; Cigarettes including RYO; Cigars; Smoking tobacco
Executive summary
Cigarettes volume sales continue to fall in 2006
Cigarettes volume sales continued their downward trend in 2006. Spurred by high prices, health concerns and an increasingly negative public attitude towards smoking, people gave up cigarettes in greater numbers, while restrictions on advertising continued to impede manufacturers’ ability to attract new smokers.
Advantage of deep discounters is eroded as major manufacturers regroup
Early in the review period, the Master Settlement Agreement (MSA) and higher state excise taxes led to an escalation in cigarette prices. This provided an opportunity for deep discounters to supply economy cigarettes to consumers fed up with paying higher prices. By 2006, however, this price advantage had been steadily eroded—state governments became more vigilant about enforcing the terms of the MSA, while manufacturers such as Philip Morris and RJ Reynolds carefully managed the price gap between premium and discount brands. Moreover, the three largest US manufacturers (Philip Morris, RJ Reynolds and Lorillard) all threw their considerable marketing power behind a select group of premium brands, all of which enjoy substantial loyalty among consumers. This strategy allowed them to make steady gains against discount products carrying minimal branding and receiving virtually no marketing support.
Cigars sector becomes increasingly two-tiered
Towards the end of the review period, cigars continued to split between high-priced imported hand-rolled cigars, which account for a significant sector value share, and machine-made cigars and cigarillos, which are much cheaper and account for the majority of volume sales. By 2006, the premium segment had largely recovered from the collapse of the ‘cigar boom’ of the mid-1990s, as more Americans once more looked to imported cigars as a symbol of wealth and affluence, like fine wine. At the same time, many tobacco retailers increased their focus on premium cigars, both as a means of boosting margins and as a way of differentiating themselves from standard outlets dealing mainly in cigarettes. At the other end of the spectrum, demand for cigarillos boomed, thanks mainly to the fact that they offer significant cost savings compared to cigarettes. Manufacturers responded with a wave of new product launches; flavoured varieties were among the most successful, proving extremely popular while largely avoiding the strong public outcry that launches of flavoured cigarettes generally provoke.
Potential of smokeless tobacco attracts leading cigarette manufacturers
As one of the few market niches with real volume growth potential, smokeless tobacco drew increasing attention from the largest cigarette manufacturers towards the end of the review period. In April 2006, Conwood was acquired by RJ Reynolds for US$3.5 billion. This gave the number two US cigarette producer an instant footprint in smokeless tobacco, particularly in the economy segment, where Conwood’s brands (led by Kodiak) are extremely strong. Not to be outdone, in December 2006 Lorillard announced an agreement with Swedish Match to develop and promote smokeless tobacco products in the US. In addition, RJ Reynolds, Philip Morris and US Smokeless Tobacco all made forays into snus, a finely ground, pasteurised form of tobacco which does not require spitting and is extremely popular in Scandinavia.
High prices for packaged cigarettes encourage more Americans to roll their own
Long a major factor in Northern European markets, the US RYO tobacco subsector showed strong volume sales growth in 2006. During the review period, high prices for packaged cigarettes led many consumers to RYO tobacco products, which are often significantly cheaper on a per-stick basis. At the same time, a number of RYO tobacco producers began to market their products as more flavourful, higher-quality alternatives to mass-produced cigarettes. In addition, pre-made RYO sticks (often with filters) and injector machines made RYO tobacco a more convenient option, while also addressing the squeamishness many Americans have about smoking unfiltered cigarettes. While RYO tobacco is expected to remain tiny compared to the cigarettes sector, it should continue to see strong volume sales growth over the forecast period, drawing on many of the same consumers fuelling demand in the economy cigarettes segment.
Table of contents
TOBACCO IN THE US : MARKET INSIGHT
EXECUTIVE SUMMARY
OPERATING ENVIRONMENT
Smoking Population
Table 1 Smoking Prevalence in Population 2001-2006
Death by Cause
Legislation
Advertising & Sponsorship
Litigation
Taxation and Duty Levies
Table 2 Taxation and Duty Levies
Production/Imports/Exports
Table 3 Trade Statistics – Cigarettes
The Role and Effect of Cannabis/Marijuana
Smokeless tobacco in the US
MARKET INDICATORS
Table 4 Deaths by Diseases of the Respiratory System 2001-2006
Table 5 Deaths from Heart Disease 2001-2006
Table 6 Deaths from Lung Cancer 2001-2006
Table 7 Illicit Trade Estimate 2001-2006
MARKET DATA
Table 8 Sales of Tobacco by Sector: Volume 2001-2006
Table 9 Sales of Tobacco by Sector: Value 2001-2006
Table 10 Sales of Tobacco by Sector: % Volume Growth 2001-2006
Table 11 Sales of Tobacco by Sector: % Value Growth 2001-2006
Table 12 Sales of Cigarettes by Distribution Format: % Analysis 2001/2006
Table 13 Forecast Sales of Tobacco by Sector: Volume 2006-2011
Table 14 Forecast Sales of Tobacco by Sector: Value 2006-2011
Table 15 Forecast Sales of Tobacco by Sector: % Volume Growth 2006-2011
Table 16 Forecast Sales of Tobacco by Sector: % Value Growth 2006-2011
DEFINITIONS
Sources
Summary 1 Research Sources
LOCAL COMPANY PROFILES - USA
LORILLARD TOBACCO CO - TOBACCO - USA
Strategic direction
Key facts
Summary 2 Lorillard Tobacco Co: Key Facts
Summary 3 Lorillard Tobacco Co: Operational Indicators 2004-2006
Company background
Production by factory
Summary 4 Lorillard Inc: Production Statistics by Factory
Competitive positioning
Summary 5 Lorillard Tobacco Co: Competitive Position 2006
NAT SHERMAN INC - TOBACCO - USA
Strategic direction
Key facts
Summary 6 NAT Sherman Inc: Key Facts
Company background
Production by factory
Competitive positioning
Strategic direction
Key facts
Summary 7 Altadis USA Inc: Key Facts
Summary 8 Altadis USA Inc: Operational Indicators 2004-2006
Company background
Production by factory
Competitive positioning
Summary 9 Altadis USA Inc: Competitive Position 2006
PHILIP MORRIS USA INC - TOBACCO - USA
Strategic direction
Key facts
Summary 10 Philip Morris USA Inc: Key Facts
Summary 11 Philip Morris USA Inc: Operational Indicators 2004-2006
Company background
Production by factory
Summary 12 Philip Morris USA Inc: Production Statistics by Factory
Competitive positioning
Summary 13 Philip Morris USA Inc: Competitive Position 2006
RJ REYNOLDS TOBACCO CO - TOBACCO - USA
Strategic direction
Key facts
Summary 14 RJ Reynolds Tobacco Co: Key Facts
Summary 15 RJ Reynolds Tobacco Co: Operational Indicators 2004-2006
Company Background
Production by factory
Competitive positioning
Summary 16 RJ Reynolds Tobacco Co: Competitive Position 2006
CIGARETTES IN THE US
HEADLINES
TRENDS
Illicit trade (Cigarettes)
Cigarettes: Price Bands
Cigarettes: Filter Splits
Table 17 Slims/superslims Penetration
Cigarettes: Pack Splits
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 18 Sales of Cigarettes by Tar Level: Volume 2001-2006
Table 19 Sales of Cigarettes by Tar Level: Value 2001-2006
Table 20 Sales of Cigarettes by Tar Level: % Volume Growth 2001-2006
Table 21 Sales of Cigarettes by Tar Level: % Value Growth 2001-2006
Table 22 Sales of Cigarettes by Price Band: %Volume Breakdown 2001-2006
Table 23 Sales of Cigarettes by Standard/Menthol: %Volume Breakdown 2001-2006
Table 24 Sales of Cigarettes by Tobacco Type: %Volume Breakdown 2001-2006
Table 25 Sales of Cigarettes by Filter Vs Non-filter 2001-2006
Table 26 Sales of Filter Cigarettes by Carbon Vs Non-carbon 2001-2006
Table 27 Sales of Cigarettes by Length 2001-2006
Table 28 Sales of Cigarettes by Pack Size 2001-2006
Table 29 Sales of Cigarettes by Pack Type 2001-2006
Table 30 Cigarettes Company Shares 2002-2006
Table 31 Cigarettes Brand Shares 2003-2006
Table 32 Forecast Sales of Cigarettes by Tar Level: Volume 2006-2011
Table 33 Forecast Sales of Cigarettes by Tar Level: Value 2006-2011
Table 34 Forecast Sales of Cigarettes by Tar Level: % Volume Growth 2006-2011
Table 35 Forecast Sales of Cigarettes by Tar Level: % Value Growth 2006-2011
Table 36 Forecast Sales of Cigarettes by Price Band: %Volume Breakdown 2006-2011
Table 37 Forecast Sales of Cigarettes by Standard/Menthol: %Volume Breakdown 2006-2011
Table 38 Forecast Sales of Cigarettes by Tobacco Type: %Volume Breakdown 2006-2011
Table 39 Forecast Sales of Cigarettes by Filter Vs Non-filter 2006-2011
Table 40 Forecast Sales of Filter Cigarettes by Carbon Vs Non-carbon 2006-2011
Table 41 Forecast Sales of Cigarettes by Length 2006-2011
Table 42 Forecast Sales of Cigarettes by Pack Size 2006-2011
Table 43 Forecast Sales of Cigarettes by Pack Type 2006-2011
CIGARS IN THE US
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 44 Sales of Cigars by Subsector: Volume 2001-2006
Table 45 Sales of Cigars by Subsector: Value 2001-2006
Table 46 Sales of Cigars by Subsector: % Volume Growth 2001-2006
Table 47 Sales of Cigars by Subsector: % Value Growth 2001-2006
Table 48 Company Shares of Cigars Exluding Cigarillos 2002-2006
Table 49 Brand Shares of Cigars Exluding Cigarillos 2003-2006
Table 50 Company Shares of Cigarillos 2002-2006
Table 51 Brand Shares of Cigarillos 2003-2006
Table 52 Forecast Sales of Cigars by Subsector: Volume 2006-2011
Table 53 Forecast Sales of Cigars by Subsector: Value 2006-2011
Table 54 Forecast Sales of Cigars by Subsector: % Volume Growth 2006-2011
Table 55 Forecast Sales of Cigars by Subsector: % Value Growth 2006-2011
SMOKING TOBACCO IN THE US
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 56 Sales of Smoking Tobacco by Subsector: Volume 2001-2006
Table 57 Sales of Smoking Tobacco by Subsector: Value 2001-2006
Table 58 Sales of Smoking Tobacco by Subsector: % Volume Growth 2001-2006
Table 59 Sales of Smoking Tobacco by Subsector: % Value Growth 2001-2006
Table 60 Company Shares of RYO Tobacco 2002-2006
Table 61 Brand Shares of RYO Tobacco 2003-2006
Table 62 Company Shares of Pipe Tobacco 2002-2006
Table 63 Brand Shares of Pipe Tobacco 2003-2006
Table 64 Forecast Sales of Smoking Tobacco by Subsector: Volume 2006-2011
Table 65 Forecast Sales of Smoking Tobacco by Subsector: Value 2006-2011
Table 66 Forecast Sales of Smoking Tobacco by Subsector: % Volume Growth 2006-2011
Table 67 Forecast Sales of Smoking Tobacco by Subsector: % Value Growth 2006-2011