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Tobacco In Flux: Smoke-Free Products As An Alternative To Cigarettes

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The current state of the tobacco industry is changing.  Global cigarette sales are in decline and a new "nicotine industry" is emerging with e-cigarettes and vapour products increasing in popularity. Euromonitor International’s data shows that the cigarettes market will record a US$7.7 billion loss by 2021, compensated by the US$13.2 billion growth in heated tobacco products sales in the same period.

Shane MacGuill, head of tobacco research at Euromonitor International comments: “The continued growth in vapour products and the emergence of heated tobacco represent the major element of disruption for the tobacco industry. We believe that heated tobacco will gain a solid presence in at least 35 global markets by 2021, accounting for a share of 3.5 percent of total global cigarettes and heated tobacco value. Heated tobacco prospects are strong and strengthening. On this evidence, it is a truly a coming force in global tobacco.”

According to Euromonitor International, in 2016:

  • Global sales of heated tobacco products recorded more than USD 2 billion, with 171% growth in comparison to 2015
  • Japan was the largest heated tobacco market, accounting for a share of 96 percent of heated tobacco products global sales
  • Nine of the top 10 countries for heated tobacco sales are based in Europe, representing the fastest growing region in the world (+634% in Western Europe, +327% in Eastern Europe)
  • Germany was the second largest heated tobacco market but the USA will take its place by 2021
  • The third and fourth largest markets for heated tobacco products were Switzerland and Portugal respectively, which were also amongst the fastest growing markets
  • The UK represented the fastest growing market with 467% growth compared to 2015

Top 10 Heated Tobacco Markets

Geography Market size at retail in 2016 (USD million)
Japan 1,911.3
Germany 11.4
Portugal 7.9
Switzerland 5.8
Denmark 3.6
Romania 2.9
Russia 2.6
France 1.5
United Kingdom 1.4
Ukraine 1.2

source: Euromonitor International

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