Cigars and cigarillos experienced notable double-digit retail volume declines in 2020, as a result of the pandemic due to the closure of tobacco specialists and mixed retailers, which are the main distribution channels for these products. In 2020, these outlets remained closed for an average of six months (closures varied from region to region), although smaller channels such as supermarkets and hypermarkets were able to benefit during this period, with both recording double-digit retail volume growth, albeit from a low sales base.
Holding much lower retail volume share overall, smoking tobacco posted lower declines compared to cigars and cigarillos, driven by the larger category of pipe tobacco. However, the niche of fine cut tobacco was the only positive performer in both retail volume and current value terms.
Overall demand for cigars, cigarillos and smoking tobacco is relatively small in Mexico, as is the number of national brand owners. Four significant companies dominate cigars and cigarillos; Nueva Distabac is a Mexican cigar manufacturer and held the largest volume share in 2020.
Further declines are likely to be observed during 2021 due to ongoing restrictions to outlets’ operations, and capacity. However, cigars and cigarillos is predicted to see low positive demand from 2022 onwards, due to a return to purchasing confidence amongst certain consumers who smoke these tobacco products in addition to a relaxing of restrictions and social distancing measures, which will see Mexicans enjoy smoking cigars in particular, with others.
Health risks associated with smoking tobacco are expected to remain top of mind amongst consumers over the forecast period. This will restrain the category’s recovery, although fine cut tobacco will stagnate in overall retail volume sales terms, compared to further declines for the dominant pipe tobacco.
Over the forecast period, the category is expected to continue to rely on population growth to sustain demand as general smoking prevalence declines. However, the profile of consumers of this category in Mexico is evolving to epitomise younger people in the 30-40 age bracket with higher purchasing power and who like to smoke cigars as an accompaniment to alcoholic drinks.
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Understand the latest market trends and future growth opportunities for the Cigars, Cigarillos and Smoking Tobacco industry in Mexico with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Cigars, Cigarillos and Smoking Tobacco research and analysis database.
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