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Strategy Briefing

Global Tobacco: Key Findings Part 1 – Cigarettes - Disruption and Continuity

Aug 2018

US$1,325

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About This Report

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If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE!

With ever-tightening regulation, the emergence of credible alternatives and growing reputational challenges for its supply chain and sustainability, it is clear that the cigarette industry is living through its own version of the (apocryphal) Chinese curse. However - as Euromonitor’s updated 2018 Passport Tobacco database makes clear - among all the disruption there is continuity as companies seek to evolve to a longer-term future.

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Overview

Why buy this report?

Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Cigarettes volume

-1.5%

China's return to growth and stability in some other key regions saw the global cigarettes industry post its best performance since 2014 with volume decline of 1.5%. Excluding China, market volume declined by 3.1% as the only region to see growth (Middle East and Africa) was offset by accelerated declines in Eastern Europe.

Average pack price

USD2.60

Average pack price growth moderated significantly in 2017 with the global average up by around 1% to reach USD2.60 (USD3.22 excluding China). All told, this represents the weakest year-on-year price growth for the cigarettes category since the height of the global financial crisis in 2008. Tax increases contributed to Australasia's 10.6% and Eastern Europe's 8.7% pack price increments.

Cigarettes value

+2.8%

Cigarettes value performance was a mixed bag in 2017 as the return of China to positive territory drove 2.8% growth; excluding China, the global industry expanded by a more modest 2.1%. Australasia, Eastern Europe and the Middle East and Africa also saw strong growth but increased price sensitivity and availability of competitive options were responsible for declines in Western Europe and North America.

Illicit trade volume

+1.4%

The total volume of illicit cigarettes consumed in 2017 increased by 1.4% as continuing reductions in China and Turkey were offset by increased demand in Latin America and the Middle East and Africa. Excluding China, illicit volumes grew over 4% in 2017, with one market, Brazil, accounting for a quarter of the additional sticks.

Non cig-a-like close system value

+239%

The second straight year of triple-digit value growth for non cig-a-like closed systems is emblematic not only of a shift within vapour products (as preference moves away from open systems) but also in a broader sense of the challenges facing cigarettes from emerging product categories which are not simply acceptable substitutes but may appeal to adult consumers in ways cigarettes do not.

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Introduction

Scope

Key Findings

The tobacco market in 2017

Key drivers of global cigarettes

Headline growth and decline trends for 2017

Category growth comparisons over 2012-2017: pipe the big mover

Tobacco products market outlook over 2017-2022

Vapour growth enters a more mature phase

Prospects for global top 15 markets 2017-2022

Top 15 fastest growing global cigarette markets 2017-2022

Projecting the top 20 cigarette markets in 2032

Downhill all the way for forecast cigarette volumes

Geographic Focus

Cigarette volume and value forecast by region

All about price: regional cigarettes market analysis over 2012-2017

Where cigarettes growth came from in 2016: update

Where (total) cigarettes growth and decline came from 2012-2017

Cigarette affordability a mixed picture globally

China: returns to (momentary) growth

US: secular decline in the context of JUUL and cannabis

Russia: major disruption as excise taxes and tobacco control bite

Indonesia: volume losses continue but value robust

India: d efined by excise and regulation

Potential remaining M&A opportunities focused in APAC and MEA

Threats and opportunities for cigarettes in global geopolitical instability

Prevalence & Affordability

Trends in smoking prevalence by region

Most notable shifts in smoking population and prevalence 2012-2017

Where the smokers are: population analysis by region

Prevalence declines much greater than increases

Clustering markets by affordability

5-year forecast: change in affordability 2017-2022

Top 10 most and least affordable markets

Selected market attractiveness by revenue and affordability

Legislation, Price & Illicit Trade

Legislative restrictions on the global tobacco industry

Plain packaging could morph into standardised product laws

More restrictions on flavours, including menthol, are likely in the US

Other markets with current or pending flavour and menthol bans

FDA: shifting the tobacco trajectory through nicotine reduction

How the soft drinks industry can inform tobacco in regulatory response

Cigarettes: global price analysis

Cigarettes: pricing outlook

Price band forecast displays the impact of price and regulation

Illicit penetration: global comparisons 2017

Regional trends in illicit: historic

Regional trends in illicit trade: forecast

Distance selling a re-emerging trend in illicit trade

Key Forces Impacting Cigarettes

Key d rivers of change in cigarette consumption

Wider consumer megatrends influencing tobacco trends

How key megatrends are impacting cigarette consumption: review

Wider megatrends interacting with cigarette key drivers

The changing face of the consumer does not fit cigarettes

How segments are re-aligning their business models

Tobacco regulation is increasingly a key force for commoditisation

One that is expected to expand and amplify

Competing categories impinging on cigarette consumption

New modes of consumption accelerating outswitching

Emerging retail landscape tends to militate against cigarettes

Flow of technological change gushes away from traditional tobacco

Companies, Brands & Competitive Strategies

Top 10 cigarettes companies: how they performed in 2017

Brands: how they performed in 2017

Migrations are now widespread in the global brand landscape

Pending/possible regulation impacting innovation

Cigarette innovation opportunities in regulated environments

Selected current prominent innovations (1)

Selected current prominent innovations (2)

Winston: ploughing a steady furrow

Philip Morris and Chesterfield: PMI’s two growth brands in 2017

Rothmans: accessible price and aspirational positioning drive growth

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Megatrends

Strategy Briefing

Global Tobacco: Key Findings Part 1 – Cigarettes - Disruption and Continuity

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Cigarettes volume

-1.5%

Average pack price

USD2.60

Cigarettes value

+2.8%

Illicit trade volume

+1.4%

Non cig-a-like close system value

+239%

Want to find out more about this report?

Table of Contents

Introduction

Scope

Key Findings

The tobacco market in 2017

Key drivers of global cigarettes

Headline growth and decline trends for 2017

Category growth comparisons over 2012-2017: pipe the big mover

Tobacco products market outlook over 2017-2022

Vapour growth enters a more mature phase

Prospects for global top 15 markets 2017-2022

Top 15 fastest growing global cigarette markets 2017-2022

Projecting the top 20 cigarette markets in 2032

Downhill all the way for forecast cigarette volumes

Geographic Focus

Cigarette volume and value forecast by region

All about price: regional cigarettes market analysis over 2012-2017

Where cigarettes growth came from in 2016: update

Where (total) cigarettes growth and decline came from 2012-2017

Cigarette affordability a mixed picture globally

China: returns to (momentary) growth

US: secular decline in the context of JUUL and cannabis

Russia: major disruption as excise taxes and tobacco control bite

Indonesia: volume losses continue but value robust

India: d efined by excise and regulation

Potential remaining M&A opportunities focused in APAC and MEA

Threats and opportunities for cigarettes in global geopolitical instability

Prevalence & Affordability

Trends in smoking prevalence by region

Most notable shifts in smoking population and prevalence 2012-2017

Where the smokers are: population analysis by region

Prevalence declines much greater than increases

Clustering markets by affordability

5-year forecast: change in affordability 2017-2022

Top 10 most and least affordable markets

Selected market attractiveness by revenue and affordability

Legislation, Price & Illicit Trade

Legislative restrictions on the global tobacco industry

Plain packaging could morph into standardised product laws

More restrictions on flavours, including menthol, are likely in the US

Other markets with current or pending flavour and menthol bans

FDA: shifting the tobacco trajectory through nicotine reduction

How the soft drinks industry can inform tobacco in regulatory response

Cigarettes: global price analysis

Cigarettes: pricing outlook

Price band forecast displays the impact of price and regulation

Illicit penetration: global comparisons 2017

Regional trends in illicit: historic

Regional trends in illicit trade: forecast

Distance selling a re-emerging trend in illicit trade

Key Forces Impacting Cigarettes

Key d rivers of change in cigarette consumption

Wider consumer megatrends influencing tobacco trends

How key megatrends are impacting cigarette consumption: review

Wider megatrends interacting with cigarette key drivers

The changing face of the consumer does not fit cigarettes

How segments are re-aligning their business models

Tobacco regulation is increasingly a key force for commoditisation

One that is expected to expand and amplify

Competing categories impinging on cigarette consumption

New modes of consumption accelerating outswitching