Cigarettes in Mexico

PROSPECTS

Volume growing at a moderate rate in 2017

Cigarettes posted a moderate but positive growth in volume terms in 2017, driven by a mix of trends that include a decline in the smoking prevalence and in the average number of sticks smoked per day, a reduction of illicit trade and the growth of the country’s population. The reduction of illicit trade due to the government’s actions results in higher consumption of legal products.

Innovation is a key driver of consumption

While older adults are more loyal to a cigarette brand, young customers are attracted by the different and appealing innovations that are launched every year (e.g.

Regulation is having an impact on smoking prevalence

In 2017, no new regulations were imposed on cigarettes, although the sum of regulations in force to date, including public smoking bans, mandatory graphic warning labels and advertising restrictions, keep impacting and reducing the prevalence of smoking. The special tax added to cigarettes as a measure to discourage the consumption has a limited effect as it is easy to buy single sticks at numerous points of sale for a few pesos.

COMPETITIVE LANDSCAPE

Philip Morris leads, while British American Tobacco increases its share

The cigarettes category in Mexico is consolidated between international companies: Philip Morris Productos y Servicios has the largest share in 2017, and although British American Tobacco is far behind in terms of share, in 2017 it posted a share increase to the detriment of Philip Morris. Japan Tobacco International Mexico is also present in the country through the Winston brand with a low share.

The two main manufacturers are constantly developing new products

The two big players are competing for young customers who are attracted to new products and especially flavoured cigarettes. Philip Morris and British American Tobacco are actively developing and launching appealing products.

Delicados is losing share

One of the main brands of Philip Morris is Delicados, a brand with a very long tradition in Mexico, and recognised in particular by older adults by its strong flavour. In 2017, Delicados posted a share decline, apparently due to the preference of younger consumers for international brands with a fresher look.

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