Smoking tobacco continued to attract cigarette smokers in 2021 who were searching for more affordable and allegedly less harmful products, as some Chileans perceive smoking tobacco as more natural and less processed compared to manufactured cigarettes due to the presence of fewer additives. The larger volume category of fine cut tobacco continued to outperform pipe tobacco.
The pandemic halted international travel from 2020 and certain measures remained in place for most of 2021 with exceptions that were accompanied by restrictions, which meant that local consumers preferred to wait until a more positive scenario. Since cigars is a niche area of the category, where many smokers usually purchase their cigars during travel, the current scenario meant that these consumers turned to the local market to source imported cigars and cigarillos, which stimulated an influx of new imports.
Smoking tobacco is dominated by imported brands including Madison, Red Field and Flandria, in addition to the Mac Baren line which encompasses several products together with multiple flavours, placing leadership in the hands of major local distributors such as Andes Tabacos Ltda, Soc Comercial M'ontecristo Lt and Importadora de Tabacos Nady Basti Ltda.
With consumers increasingly health aware following the emergence of the pandemic, there is set to be increased interest in products perceived as less potentially harmful in the tobacco environment. This is likely to benefit smoking tobacco, which is seen as a more natural alternative, particularly as organic variants have continued to penetrate the market, while different flavours have also attracted consumers searching for a different experience.
Since cigars is a niche area of Chilean tobacco, locally available brands are subject to a higher cost, since they are imported in low volumes. With increasing import costs and inflation rates expected to soar at a worldwide level, many consumers will turn to purchasing better quality products at a more affordable price outside of the country, now that the borders are open and restrictions are planned to be reduced, allowing business and leisure travel to resume at more normal levels.
A pessimist economic outlook on the horizon that includes high inflation rates, higher fuel costs and reduced cash influx in the pockets of local consumers, means that indulgence will take a back seat against prioritising living expenses. This might encourage some consumers to reduce their purchases of cigars, which are mostly seen as products for special occasions.
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Cigars, Cigarillos and Smoking Tobacco
This report originates from Passport, our Cigars, Cigarillos and Smoking Tobacco research and analysis database.
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