For the first time in two decades, tobacco product sales increased. According to a 2021 report from the Federal Trade Commission, cigarette sales in the United States increased from 202.9 billion units sold in 2019 to 203.7 billion units sold in 2020. Meanwhile, revenue from smokeless tobacco sales grew by 290 million USD.
Still, the growth of the tobacco industry might be temporary. Last year, the World Health Organization reported that more and more people are saying no to tobacco, with the number of global users expected to drop to 1.27 billion by 2025 — a considerable decline from 2015’s 1.32 billion. With this in mind, the tobacco industry is expected to encounter several new market trends that will affect every aspect of tobacco’s supply chain. We’ll highlight some of these expected trends below.
Stricter marketing regulations
Governments around the globe are doing their parts to dissuade tobacco users. Alongside heavy taxes and proactive anti-smoking campaigns, countries are also tightening their regulations on the marketing of tobacco products. In many countries, bans for advertisement of tobacco products exist in one form or another. For example, in the United States, cigarette advertisements on TV and radio have been banned since 1971! As a response to this, tobacco companies usually reallocate their resources toward whatever channels remain open — whether that means social media, point of sale, direct male, or package branding.
Even so, the pushback against tobacco marketing is constantly evolving. Tobacco Atlas notes that as of 2016, 15% of the world’s population lives in countries that are covered by the WHO FCTC’s best-practice policy when it comes to tobacco promotion and advertising. Other countries are going further still, implementing direct instructions regarding how cigarettes and cigarette packaging should be designed. For example, Canada has considered standardising cigarette products to include explicit pictures of lung cancer on packaging, or bland and unpleasant wrapping on actual cigarettes.
In 2022, the tobacco industry will surely face more barriers to marketing its products.
Heat-not-burn tobacco products
Tobacco products that are not burnt are growing in popularity. As we’ve mentioned, tobacco regulations are becoming restrictive all around the world. Because of this, some major tobacco companies are pivoting toward alternative products. For instance, tobacco giant Philip Morris International recently announced that it plans to stop selling cigarettes in the United Kingdom in the next decade — and this includes cigarettes from brands such as Marlboro and Chesterfield.
Instead of producing their ever-popular cigarettes and cigars, tobacco companies are investing more money into “heat-not-burn” tobacco products. These products show up through brands like IQOS and Jouze, which deliver similar experiences to cigarettes without burning the tobacco, resulting in fewer toxicants.
The future for tobacco manufacturers that fail to innovate seems bleak. Today, more and more tobacco alternatives are emerging. Tobacco-free nicotine products, such as nicotine pouches, have begun to capture the market. Nicotine pouches are small pouches filled with fiber and added nicotine. As you can see from the wide array of strong nicotine pouches featured on Prilla, nicotine pouches can deliver a strong nicotine kick without exposing users to tobacco content. Storeowners selling these products have reported noticeable shifts toward tobacco-free products, and one substantial retail chain reported a 40% growth in pouches last year.
Additionally, consumers are showing great enthusiasm for tobacco-free e-cigarettes — smoking products that are more popularly known as “vapes.” Claims that e-cigarettes can help mitigate nicotine addiction have boosted vape sales across the United States. However, these claims have not been supported by the FDA or any other authoritative health organization. Studies have even shown that switching to e-cigarettes has no effect on overall nicotine consumption.
People today understand the risks of using tobacco products and are looking for alternatives that can help wean them off of smoking tobacco. As more tobacco alternatives enter the industry, tobacco companies will either need to embrace the change and release similar products, or create something new that’s able to capture the market.
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With over 15 years as a practicing journalist, Nikki Attkisson found herself at Powdersville Post now after working at several other publications. She is an award-winning journalist with an entrepreneurial spirit and worked as a journalist covering technology, innovation, environmental issues, politics, health etc. Nikki Attkisson has also worked on product development, content strategy, and editorial management for numerous media companies. She began her career at local news stations and worked as a reporter in national newspapers.