Cigars, Cigarillos and Smoking Tobacco in the United Kingdom

2021 DEVELOPMENTS

Fine cut tobacco sees double-digit value and volume growth for a second year

The continued popularity of fine cut tobacco in 2021 was driven by a shift from cigarettes, as the category represents an experientially close and cheap alternative, even when considering the necessity to purchase rolling accessories. However, the current value and volume growth rates in 2021 were lower than those experienced in 2020, as illicit trade returned to some extent, and bulk-buying eased.

Cigars enjoys unprecedented current value growth

For a category that has historically been very stale, the pandemic ushered in current value growth in cigars in 2021, which was attributable to a multitude of reasons. The first was the increased social interactions that were allowed in 2021 relative to 2020, as the category is dependent on celebrating and socialising.

Cigarillos continue to convince cigarette smokers to shift

As the second best performing category within cigars, cigarillos and smoking tobacco, cigarillos are appreciated for a number of features. The first is their price.

PROSPECTS AND OPPORTUNITIES

Fine cut tobacco set to fall from its heights of 2020 and 2021 in the forecast period

Although fine cut tobacco enjoyed significant increases in sales during the pandemic, this is certainly not expected to continue in the forecast period. Constant value growth will remain solid but slowing, whilst volume growth will continue in the first years of the forecast period, although also see a slowing trend, performing better than pre-pandemic due to economic uncertainty and favourable pricing.

Cigars to return to value decline, whilst cigarillos will see volume and value growth slow in a context of economic uncertainty

A major drawback for the cigars category in the UK is its dependence on an ageing cohort of consumers. With health awareness rising, cigar brands have failed to attract a younger demographic to sustain sales in the long term.

E-commerce and convenience stores set to dominate distribution

Although in 2021 food/drink/tobacco specialists and independent small grocers strongly recovered, and sales surpassed those seen in 2019, this is not anticipated to be sustained. This is largely as a result of the universally declining sales of tobacco products.