Cigars, Cigarillos and Smoking Tobacco in Slovenia

2021 DEVELOPMENTS

Smoking tobacco benefits from shift away from cigarettes

In 2021, smoking tobacco sales increased in retail volume terms. Smoking tobacco benefited from consumers trading down from more expensive cigarettes.

Domestic sales of cigars decline as borders reopen

Cigars and cigarillos registered retail volume decline in 2021. The home seclusion of the COVID-19 pandemic positively affected cigars consumption in the previous year as habitual cigar smokers switched to at-home consumption when cigar clubs were closed.

Consumers lose interest in pipe tobacco

Pipe tobacco is considered a relatively niche product in Slovenia, and the product area recorded declining retail volume sales at the end of the review period and in 2021 as consumers lost interest in pipe smoking. The health and wellness trend is also gaining traction among consumers of pipe tobacco, negatively affecting sales of the product as a result.

PROSPECTS AND OPPORTUNITIES

Cigars and cigarillos slip back into declining growth as consumers reduce or cut their tobacco consumption

Cigars and cigarillos are projected to register negative retail volume growth in 2022 and over the remainder of the forecast period. Cigars and cigarillos draw only a limited number of consumers, and the decline in consumption of such tobacco products will be driven primarily by rising health and wellness trends in Slovenia which are prompting consumers to reduce or to completely cut their tobacco consumption.

Despite cheaper price points, price rises will gradually impact smoking tobacco

Although smoking tobacco is usually cheaper than cigarettes, price rises will impact sales of these product areas over the course of the forecast period. The continued price rises expected in tobacco over the forecast period are expected to have a negative impact on volume sales of smoking tobacco, even though many consumers switched to these products as cheaper alternatives.

The premium positioning of cigars prevents heavier decline

Over the forecast period, the premium and luxury positioning of cigars is expected to work in favour of this product area, preventing heavier retail current value losses in line with other product areas in this category. Although all product areas look set to register negative CAGRs over the forecast period, the decline of cigars will be the least severe in retail current value terms.