Tobacco vs smoking cessation aids
Author: Adrienne Crossley
Date published: 2 Feb 2004
The world market for tobacco products was worth some US$340 billion in 2001, cigarettes account for 96.5% of the world market value, with smoking tobacco accounting for 2% and cigars/cigarillos for 1.5%. Cigars/cigarillos recorded the highest levels of growth in recent years, benefiting from a fashion based surge in popularity of cigar smoking, particularly in the US - this is unlikely to be repeated – growth was aided by comparatively lower taxation, and less draconian anti-smoking legislation in comparison to cigarettes. In both instances, the playing field is likely to be levelled in the coming years.
Cigaretteswill increase domination of the global tobacco market, the reasons are two-fold: Firstly cigarettes have particular domination of emerging markets. Cigars, and, to a lesser but still significant effect smoking tobacco, are primarily consumed in Western Europe and the US, thus the strategic potential for these markets to grow is severely limited.
There will remain however some niche market positioning for cigars and smoking tobacco products. Cigarillos, particularly with filters, will remain an alternative to cigarettes for some consumers while both cigarillos and RYO tobacco will continue to benefit from lower levels of taxation in comparison to cigarettes, although the differential will narrow.
The world market for smokeless tobacco adds a further US$2 billion, of which the US accounts for some 65%.
Strength trends
The following analysis compares growth in the global market for tobacco products with the smoking cessation industry. Global sales of tobacco dwarf sales of nicotine-based products to aid giving up, at US$340 billion in 2002 vs US$1.4 billion in 2002.
Among cigarette products, there is a clear trend away from High tar cigarettes, whilst lower tar varieties mid-tar, low tar and ultra low tar cigarettes as well as smoking cessation aids experienced growth.
Greatest dynamism and few signs of slowing down for smoking cessation
Smoking cessation sales growth is driven by public education campaigns regarding the health risks of smoking, Rx-to-OTC switching, and the development of a range of product delivery formats, including gum, transdermal patches, mouth sprays, pills and lozenges. Sales growth of 15% in 2002 was also boosted by changes in legislation in Japan in the previous year, where, for the first time, a smoking cessation aid (Nicorette) was approved for OTC sale by the Japanese Ministry of Health, Labour and Welfare. Other areas of significant growth included the UK. Constant value growth of over 13% in the UK in 2002 was attributable to GlaxoSmithKline's new product introduction, the Niquitin CQ Lozenge, which was launched in October 2001 and recorded sales of £8.5 million (US$12.1 million) in its first full year on the market.
Number of smokers
With the notable exception of China, all major markets for smoking cessation aids witnessed a declining trend in the proportion of smokers as a percentage of the total population over the period 1997-2000. In the US, approximately 20.3% of the US population aged 15 and over in 1997, or 42.3 million people, were tobacco users. That number fell to less than 40 million persons in 2000, or 18.5% of Americans aged 15 and over, with both genders exhibiting declining tobacco usage over this period.
Although a similar trend was evident in the UK, smoking rates among women have declined more slowly than they have for men. By 2000, men and women were almost equally likely to be smokers. Declines in smoking were the result of greater public awareness about the dangers of smoking, combined with social pressure placed upon smokers by friends and family to quit. Prescriptions for nicotine replacement therapy (NRT) are available through the National Health Service (NHS), as are prescriptions for Zyban. The UK, however, has not placed a ban on public smoking, which is permitted in virtually all bars and restaurants. Cigarette machines are still commonly found in bars, and young people need only be 16 years of age or older to purchase tobacco legally.
The gender variation in Japan is more marked. According to the Ministry of Health, 53% of men and 15% of women are smokers, while statistics revealed that in 2000 lung/bronchial cancer replaced stomach cancer as the number one cause of cancer-related deaths in Japan. In global terms these figures are very high, but are even more significant in the context of a survey conducted by Pharmacia in 2000. Of 500 male employees surveyed who smoke, almost 60% responded that they would like to quit if there was an easy way to do so, with some 50% responding that they could not cope with the withdrawal symptoms associated with quitting. The potential market for smoking cessation products in Japan is huge, especially given current trends towards health consciousness, and changing attitudes towards smoking in public.
Following the pan-European trend, the proportion of smokers in France declined moderately over the review period, from 27.2% of the population aged over 15 in 1997 to 26.8% in 2000. This proportion varied significantly according to demographic and socioeconomic factors. The total population of smokers was estimated to be about 13 million in 2000, with daily smokers consuming an average 14 cigarettes a day. By gender, it was estimated that 33.1% of men aged over 15 years, compared to only 21.1% of women, although the gap between the proportion of adult men and women who smoke on a daily basis was narrower, at 33.2% and 26%, respectively, according to Baromètre Santé CFES 2000.
According to Euromonitor's estimates, around 23% of the total Australia population smokes, which means that over 3.5 million Australians are smokers. This equates to around one in five adults being smokers, according to the official body QUIT. Men represent the majority of smokers, and over 25% of them acknowledge smoking tobacco. Following closely behind, over 21% of women are smokers. The numbers of male and female smokers are declining, with some 150,000 smokers quitting annually in Australia, and about three quarters of smokers trying to quit at least once, as reported by QUIT.
In many developing markets, smoking is a well-ingrained habit that continues to entice new generations of smokers. Russia is characterised as having one of the highest levels of smoking in the world, and in 2000 some 53% of the national population aged 15 or over were smokers. Low consumers awareness combined with low spending power has hampered the development of smoking cessation aids, and in 2002 demand for OTC smoking cessation aids remained extremely undeveloped. Retail value sales remained negligible despite the availability of products on the market through chemists. Anti-smoking campaigns are only just beginning to appear in Russia, while the numbers of smokers, especially the proportion of young female smokers, continues to increase.
Both Turkey and China are characterised by smoking populations that fall just short of half the national population aged 15 or over. Smoking is a very common habit in Turkey, and in 2000, 49.8% of the population smoked cigarettes. Smoking has become one of the largest health problems in developing countries, and Turkey suffers badly from smoking-related diseases. Many smokers in Turkey begin to smoke when they are very young, which makes it more difficult to quit. In 2000, nearly 69% of the male population aged 15 and over smoked, up by two percentage points on 1997, and 30% of the female population aged 15 and over smoked in 2000, again up by two percentage points on 1997. According to industry sources, there were around 470 million smokers in China in 2002. Female and teenage smokers in particular, are increasing in numbers. The female smoking population traditionally comprised the elderly and the jobless, especially in the cold northern regions, but in recent years, the number of female smokers has risen greatly even in the developed coastal regions, with the total number of female smokers exceeding 159 million. This is attributable to the growing independence of women in China.
Smoking is common among adult males in South Korea, and people were allowed to smoke in most offices until recently. This is changing, following anti-smoking campaigns, and an increasing number of buildings have become non-smoking, while major broadcasting companies have eliminated smoking scenes in soap operas. Moreover, the harmful consequences of smoking have been publicised more effectively, raising awareness of the dangers of smoking. This is reflected in a consistent decline in the proportion of smokers in the wider South Korean population, and the fact that South Korea recorded the second fastest growth rate in sales of smoking cessation aids in local currency constant value terms in 2002, behind Japan.
Number of Smokers 1996-2000
% total population aged 15+ years
1996
1997
1998
1999
2000
Western Europe
Austria
31.1
30.4
29.3
28.2
27.6
Belgium
30.4
26.4
26.4
26.9
27.5
Denmark
37.0
35.0
34.5
30.9
28.4
Finland
22.6
24.5
25.1
23.4
22.5
France
27.9
27.2
27.3
27.2
26.8
Germany
28.1
28.0
28.0
27.9
27.8
Greece
35.9
36.1
36.3
35.9
36.2
Ireland
28.0
27.5
27.5
26.5
26.0
Italy
26.4
25.2
24.7
24.3
24.1
Netherlands
35.2
34.6
34.1
33.7
33.4
Norway
33.5
34.0
33.0
32.0
31.0
Portugal
19.1
19.2
19.8
20.0
20.3
Spain
33.5
33.1
32.9
32.7
32.4
Sweden
22.1
19.1
18.5
17.8
17.5
Switzerland
31.2
32.7
33.5
33.9
34.4
Turkey
47.6
48.3
48.6
49.1
49.8
UK
28.5
28.0
27.0
27.0
26.5
Eastern Europe
Bulgaria
38.2
39.0
39.2
39.4
40.1
Czech Republic
26.2
25.1
24.6
23.5
23.1
Hungary
35.6
36.5
37.6
38.6
38.0
Poland
29.7
28.8
29.1
29.4
28.8
Romania
41.4
42.4
43.1
43.9
44.4
Russia
49.8
50.4
51.6
52.7
53.0
Slovakia
41.2
42.7
45.7
47.3
48.3
Ukraine
35.2
36.2
38.6
41.7
43.8
North America
Canada
24.5
24.2
23.8
20.6
19.1
US
21.7
20.3
19.3
18.9
18.5
Latin America
Argentina
32.7
33.1
33.4
33.8
34.2
Brazil
42.2
43.4
44.4
45.7
46.6
Chile
33.5
34.3
34.5
34.5
33.7
Colombia
26.7
26.2
26.4
26.3
26.1
Mexico
27.2
28.6
28.9
29.4
29.8
Venezuela
35.1
36.0
36.7
37.2
37.7
Asia-Pacific
China
44.9
45.8
46.4
47.6
49.0
Hong Kong, China
32.0
31.8
31.7
31.4
31.2
India
38.2
38.4
38.3
38.2
38.8
Indonesia
30.3
30.9
31.4
32.3
32.7
Japan
35.2
34.7
33.6
33.7
33.7
Malaysia
35.2
34.7
33.2
33.9
35.0
Philippines
39.3
39.0
39.7
38.5
38.0
Singapore
17.3
17.7
18.2
18.7
19.2
South Korea
35.7
35.4
34.8
34.7
34.4
Taiwan
44.3
44.0
43.6
43.2
42.8
Thailand
26.2
26.1
26.1
26.1
26.0
Vietnam
36.9
37.8
38.0
38.9
39.8
Australasia
Australia
24.8
24.4
24.1
23.7
23.2
New Zealand
26.0
26.5
25.0
25.5
24.5
Africa and Middle East
Egypt
35.2
35.3
35.5
35.5
35.3
Israel
36.0
36.1
36.5
36.3
36.9
Morocco
26.9
27.4
28.0
28.4
28.9
Saudi Arabia
31.8
31.1
30.3
29.7
29.7
South Africa
34.3
34.9
35.4
36.1
36.7
Source: Euromonitor