Fine cut tobacco was strongly benefitted by border closures in 2020, which shifted sales from cross-border trade (especially from Sweden) and duty-free shopping to domestic retailers. The product is a typically popular purchase for Norwegians travelling abroad.
Pre-pandemic, many consumers shopped abroad as they sought cheaper prices than those offered in Norway. With these consumers largely forced to shop domestically in 2020, a shift towards more affordable cigars was observed by tobacco specialists.
There were no notable innovations in fine cut tobacco or smoking tobacco in 2020. These categories have an established and mature consumer group and are subject to plain packaging regulation in Norway preventing them from implementing significant presentation developments.
Fine cut tobacco is set to return to decreasing sales over the forecast period as cross-border trade and decreasing smoking prevalence limit demand. Cross-border trade is anticipated to resume normal levels towards the end of 2021 and will demonstrate the most negative effect during the early forecast period.
Cigars, cigarillos and pipe tobacco are also set to see a negative effect from returning cross-border trade over the forecast period, although the negative impact is set to be less than that of fine cut tobacco. Tobacco specialists selling cigars and pipe tobacco have gained a larger customer base during 2020 when people were forced to shop at domestic retailers and, although many customers will leave as soon as the possibility for cross-border shopping returns, some are likely to remain loyal customers to these stores due to their updated product selection, friendly staff, and strong customer service.
In the coming years, the share of e-commerce is expected to remain very low in smoking tobacco but is quickly rising for cigars and cigarillos. The former has a mature consumer group which is not keen to adopt online grocery shopping (it is mostly younger consumers driving the rise of e-commerce across industries).
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Understand the latest market trends and future growth opportunities for the Cigars, Cigarillos and Smoking Tobacco industry in Norway 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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