Smoking tobacco was already gaining stronger growth momentum towards the end of the review period due to rising price sensitivity amongst local consumers. Smokers also have a greater choice with smoking tobacco, as they are able to select the type of rolling papers, filters, amount of tobacco used, in addition to organic elements as many smokers consider smoking tobacco as more natural than packaged cigarettes.
While both cigars and cigarillos recorded declining volume sales in 2020, cigars was the most negatively impacted by the lockdown and various restrictions as a result of the pandemic. The smoking of cigars tends to be associated with social events in Spain, with the latter therefore limited in number due to the pandemic, including the cancellation or postponement of wedding receptions, which are traditionally strongly associated with cigar consumption in the country.
Altadis SA and JT International Iberia SL maintained their competition within fine cut tobacco in 2020, with both players gaining retail volume share. The leader’s position was supported by its wide brand portfolio which includes Horizon, Ducados, Ducados Rubio, Fortuna and West with all brands recording impressive volume growth in line with further demand for more affordable alternatives to standard cigarettes.
Smoking tobacco is predicted to record the most positive performance over the forecast period although from 2021 onwards, the category will struggle to repeat such impressive volume growth rates witnessed towards the end of the review period, due to the single-digit growth rates predicted for the larger fine cut tobacco. Nevertheless, pipe tobacco is likely to continue to record double-digit volume growth over 2021/2022 before gradually softening over the remainder of the forecast period.
Despite the likely return of social events during 2021, particularly important events such as weddings which may have been postponed the previous year due to the pandemic, cigars is expected to continue to experience declines over the forecast period although the rate of decline will return to greater levels seen pre-pandemic. The larger volume category is also expected to return to lower levels of decline from 2021 onwards, although price fighter cigarillos are expected to continue to attract consumers suffering from lingering price sensitivity; therefore, price fighter cigarillos are set to gain further share from other types over the forecast period, in addition to recording positive volume growth, due to their greater affordability, a particularly relevant factor should cigarettes be subject to increasing excise taxes.
After such strong growth towards the end of the review period, demand for shisha tobacco (under pipe tobacco) is set to gradually lose momentum over the forecast period, although it will continue to be the strongest performer overall, due to attracting younger adults and its traditional association with socialising. It therefore, offers further potential for companies to invest in terms of development of flavours, while new brands are also likely to enter.
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Understand the latest market trends and future growth opportunities for the Cigars, Cigarillos and Smoking Tobacco industry in Spain 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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