The global tobacco industry bounced back from the early impact of the COVID-19 pandemic to record strong volume growth in its key category, cigarettes. At the same time, the harm reduction narrative returned to the fore in some markets, as heated tobacco, in particular, continued to attract consumers migrating from other categories.
At the overall level, the cigarettes industry bounced back definitively from the historic lows of 2020, with 0.5% volume growth in 2021 (-0.3% excluding China) representing its strongest performance in a decade. However, some markets, notably the US, returned to established rates of decline, and other markets are expected to follow suit over the forecast period.
Value expanded by just over 1% in 2021, as robust volumes were not matched by strong price growth. The average pack price at a global level grew by just 0.7% in 2021, to reach USD2.99 (USD3.71 excluding China). This presages further struggles that the industry will have over the forecast period in generating revenue growth from a down-trading category.
Illicit trade volumes subdued by the lingering impact of the pandemic in 2021, albeit with a moderated 1% (excluding China) volume decline (versus an 8% decrease in 2020). Penetration remained static at just under 12%, but is predicted to rise to just under 14% by 2026, as the economic impact of the pandemic unwinds.
Global e-vapour value returned to growth in 2021, up by 10% on a sluggish 2020, driven in particular by a strong performance by the closed systems category. However, for the second year in a row, the category’s largest region, North America, was a drag on growth, as regulatory uncertainty and low public confidence constrained the market.
Heated tobacco retained its solid momentum in 2021, with growth of 33% in stick volumes, representing a slight increase on 2020’s 29%. Category growth will, however, slow substantially, as expansion in Asia Pacific moderates to just 7%, and the disruption caused by Russia’s invasion of Ukraine substantially reduces growth in that region in comparison to 2021.
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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