The low impact of Coronavirus (COVID-19) on cigars, cigarillos and smoking tobacco in 2021 was partly the result of the easing of restrictions regarding shopping and travelling. There were few exceptions during Q1 and Q4 2021 related to opening hours or restrictions for unvaccinated consumers.
Cigarillos registered faster retail volume growth than cigars in 2021. This was supported by the much lower prices of cigarillos, compared to cigars, in a tough economic environment, despite similar tobacco content and manufacturing technology.
Fine cut tobacco also enjoyed a strong increase in retail volume sales in 2021, as more consumers rolled their own cigarettes. This has become fashionable among younger smokers, who perceive that rolling cigarettes reflected is more trendy or even reflects sophistication, while they can also make cigarettes according to their own taste.
The expected strong performance of the category over the forecast period is partly derived from a relatively low base, which provides high growth potential. Smokers of cigars, cigarillos and smoking tobacco often retain their preference for these products, while cigarette smokers switch to fine cut tobacco and cigarillos, but also cigars as fashionable and perceived as less harmful alternatives, due their less processed tobacco content.
The anticipated strong performance of cigars, cigarillos and smoking tobacco is expected to encourage the entry of new lower-priced brands. As a result, more smokers may shift from cigarettes to lower-priced cigarillos, which are also perceived as a less harmful option in light of the manufacturing process and tobacco content.
As the forecast period is expected to witness an increasing demand for more brands covering a wider price range, distribution is also set to see changes. E-commerce is well placed to register fast retail volume growth in the forecast period, following the dynamic advance made by the channel due to convenience and safety considerations when shopping during the COVID-19 pandemic.
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Cigars, Cigarillos and Smoking Tobacco
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