Global Cigarette Market Size, Share and Growth Analysis Report - Forecast Trends & Outlook (2024-2032)

Global Cigarette Market Size

The global cigarette market reached a value of approximately USD 702.87 billion in 2023. The market is projected to grow at a CAGR of 2.5% between 2024 and 2032, reaching a value of around USD 815.11 billion by 2032.

Cigarette Market Outlook

• GYTS indicates India's current cigarette smokers at 2.5%, per MoHFW's 2022 report on tobacco control in India.

• Statistics Canada reports that Canadian manufacturers made 1.2 billion cigarettes in April 2024, marking an 11.6% increase from April 2023.

• Centres for Disease Control and Prevention states the United States ranks fourth globally in tobacco production, after China, India, and Brazil.

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Cigarette Market Growth

Cigarettes vary in type, content, production methods, and marketing strategies. Traditional varieties include full flavour with higher tar and nicotine, light/low tar with lowered levels, and menthol for a cooling effect. Filtered cigarettes use a filter to lessen tar and nicotine intake, while unfiltered ones lack a filter, resulting in higher tar and nicotine concentrations.

According to APS data, the UK had 12.9% current smokers in 2022, totalling 6.4 million people. Those aged 25 to 34 had the highest proportion (16.3%, approximately 1.4 million) compared to other age groups boosting the cigarette market.

Clove cigarettes (kreteks) combine tobacco and cloves for a unique flavour and aroma. Herbal cigarettes substitute tobacco with herbs, lacking nicotine but still harmful when burned. Electronic cigarettes (e-cigarettes) are battery-operated devices that deliver nicotine through vapour.

Cigarettes serve primarily to deliver nicotine for temporary pleasure and stress relief, facilitate social interaction, cope with stress and anxiety, and become part of daily routines. Despite significant health risks, smokers perceive benefits like relaxation, stress reduction, improved concentration, weight management, and socialising, though health risks outweigh these perceived benefits.

The largest cigarette companies in the US sold fewer cigarettes to wholesalers and retailers, decreasing from 190.2 billion in 2021 to 173.5 billion in 2022, per the Federal Trade Commission's latest Cigarette Report. Menthol cigarettes constituted 36% of the market among major manufacturers in 2022.

Key Trends and Developments

The rise of reduced-harm products, sustainability, and environmental concerns, premiumisation of cigarette brands, and technological advancements in production are the major trends enhancing the cigarette industry growth rate.

May 4, 2024

Reliance Retail and Code Effort collaborated to launch jeans made from 600 discarded cigarette butts per pair for Lee Cooper's Eco Collection, set to debut in July-August 2024.

February 23, 2024

Japan Tobacco International shipped 531 billion combustible cigarettes in 2023, standing out as the only top-three Big Tobacco firm to increase volumes. Winston and Camel brands contributed to a 2.3% rise in 2023.

February 14, 2024

KT&G reported Esse, their ultra-slim cigarette brand, sold over 900 billion cigarettes in 2023. It gained popularity in South Korea for its slim, low-tar design, unique amid high-tar cigarettes initially dominating the market.

June 5, 2023

The Coimbatore-based Dr Kalam Foundation launched ‘Green Buds’, an initiative aimed at recycling cigarette butts to create various products such as pillows, toys, and mattresses using cellulose acetate filters.

Rise of Reduced-Harm Products

Consumers increasingly prefer reduced-harm products like heated tobacco and nicotine pouches, viewed as safer than traditional cigarettes. Companies invest in developing these to attract health-conscious customers.

Sustainability and Environmental Concerns

The cigarette industry trends are shaped by environmental sustainability by adopting eco-friendly practices, reducing plastic waste, and promoting biodegradable alternatives. Consumer and regulatory pressure drives companies towards sustainable production and packaging.

Premiumisation of Cigarette Brands

Consumers are willing to pay more for premium cigarette brands, which offer higher-quality tobacco, sophisticated packaging, and exclusive marketing. This helps companies maintain profitability by focusing on high-margin products.

Technological Advancements in Production

Advancements in cigarette production technology improve manufacturing efficiency and product quality. Automation, advanced filtration, and precision agriculture techniques help reduce costs and meet strict quality standards.

Global Cigarette Market Trends/Drivers

Consumer preferences increasingly favour flavoured and customisable products like menthol, fruit, and dessert-flavoured cigarettes and e-liquids, particularly among younger demographics. Companies are broadening their product ranges to appeal to diverse tastes and retain customers in a competitive market landscape enhancing the growth of the cigarette market.

According to Philip Morris International's 2023 annual report, the company achieved a 5.5% growth in organic net revenue, primarily fuelled by an 8.9% increase in pricing. Marlboro, the leading international cigarette brand, comprised around 39% of total cigarette shipment volume in 2023.

Furthermore, the cigarette market is witnessing a notable shift towards e-cigarettes and vaping products, which are perceived as less harmful alternatives to traditional cigarettes, appealing particularly to health-conscious consumers looking for reduced-risk options. The convenience of vaping devices also contributes to their increasing popularity.

In November 2023, the FDA and CDC published findings from the 2023 National Youth Tobacco Survey (NYTS), revealing that e-cigarettes were used by 7.7% of youth, while cigars and cigarettes were used by 1.6% each.

Major tobacco firms are heavily investing in the development and promotion of these products to capture market share. According to Japan Tobacco Inc.'s 2023 annual report, advertising expenses amounted to 39.3 billion Japanese yen.

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Global Cigarette Market Segments

“Cigarette Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Type

• Light

• Medium

• Others

Market Breakup by Distribution Channel

• Tobacco Shops

• Supermarkets and Hypermarkets

• Convenience Stores

• Online Stores

• Others

Market Breakup by Region

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East and Africa

Global Cigarette Market Share

Light cigarettes drive global cigarette market growth as consumers perceive them as a healthier option with lower tar and nicotine levels compared to regular cigarettes.

Perceived as healthier due to reduced tar and nicotine, light cigarettes attract new and health-conscious smokers, offering marketing flexibility, brand differentiation, regulatory advantages, and global appeal. They enhance brand loyalty and can command premium prices.

According to Imperial Brands PLC's annual report, the tobacco industry has made significant strides in harm reduction, particularly in Europe where Next Generation Products (NGPs) have seen the most advancement. Yet, cigarettes still dominate the market, comprising 91% of sales in the region indicating the cigarette industry worth.

Medium cigarettes offer a balanced flavour between strong and light varieties, appealing broadly to consumers. They ensure consistent nicotine delivery, fostering brand loyalty and providing marketing flexibility. Regulatory compliance, competitive pricing, and reliable quality strengthen their market presence, catering to diverse consumer preferences as a transitional product.

Tobacco shops contribute significantly to the global cigarette market by offering a wide array of brands, including speciality, and imported varieties, to cater to diverse consumer preferences.

Tobacco shops are known for their expertise in tobacco products, ensuring informed customer choices. They stock a broad range of items, including speciality and imported brands, appealing to varied preferences, and fostering customer loyalty. Personalised service, exclusive product recommendations, regulatory compliance, and community engagement further enhance their appeal.

Supermarkets and hypermarkets provide unparalleled convenience by offering cigarettes alongside groceries, attracting consumers looking for one-stop shopping. With high foot traffic, they ensure broad exposure and potential sales, enabling bulk purchases and competitive pricing through economies of scale. They carry diverse cigarette brands, accommodating different tastes and budgets, often providing discounts and loyalty programs to attract price-sensitive shoppers.

Convenience stores play a crucial role in the cigarette market due to their immediate accessibility in locations like gas stations and urban areas. Open extended hours, often 24/7, they cater to customers seeking quick purchases without visiting larger stores. Cigarettes prominently displayed at checkout counters encourage impulse buys, boosting sales.

Online stores revolutionise the cigarette market with unmatched convenience and accessibility, particularly appealing to tech-savvy consumers preferring home shopping. They offer global reach, tapping into a vast customer base beyond local markets, and expanding business prospects. Customers enjoy shopping anytime, anywhere, with delivery options saving time and effort, and catering to busy lifestyles.

Leading Manufacturers in the Cigarette Market

The cigarette market competitive landscape is shaped by a growing emphasises on sustainability and corporate social responsibility to mitigate environmental impacts and promote ethical business practices.

Philip Morris International: Established in 1847 and based in New York City, Philip Morris International is a major player in the tobacco industry, renowned for its global presence and popular brands like Marlboro.

British American Tobacco: Founded in 1902 and located in London, British American Tobacco is a significant multinational tobacco corporation, operating worldwide with well-known brands such as Dunhill and Lucky Strike.

Japan Tobacco Inc.: Founded in 1985 and headquartered in Tokyo, Japan Tobacco Inc. stands as one of the largest tobacco companies globally, distinguished for its brands including Winston and Camel.

Imperial Brands PLC: Founded in 1901 and headquartered in Bristol, UK, Imperial Brands PLC is a multinational company recognized for its extensive portfolio, which includes renowned cigarette brands like Davidoff and Gauloises.

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Global Cigarette Market Analysis by Region

Based on cigarette market analysis, various factors influence the demand for cigarettes in the Asia Pacific region, reflecting a complex interaction of cultural, economic, and regulatory dynamics. This region has one of the highest smoking rates globally, largely due to entrenched social norms and historical tobacco use, particularly in Asian cultures, which strongly support the continued demand for cigarettes.

Tobacco is among the most economically significant crops globally, known for its resilience to drought and ability to grow in less favourable soils. In India, tobacco is cultivated on 0.27% of the total cultivated area, yielding approximately 750 million kilograms of tobacco leaf annually, thereby bolstering the cigarette market size in India.

In many parts of the Asia Pacific region, smoking remains socially acceptable, particularly among men, which contributes to the high demand for cigarettes. Japan Tobacco Inc. reportedly spent $51 million in 522 communities across 65 countries in 2022, as part of its global outreach efforts.

In Europe, the large and growing population of potential and current smokers drives the increasing demand for cigarettes. The influx of young adults into the smoking population further adds to this demand. Tobacco cultivation is practised in 12 European Union countries, with major producers including Italy, Spain, Poland, Greece, Croatia, France, Hungary, and Bulgaria, collectively accounting for 99% of the EU's tobacco production.

Recent Developments:

About one-third of the 18 billion cigarettes smoked globally each day are disposed of in proper waste or recycling containers. Bratislava is pioneering cigarette butt recycling, with the municipal waste management company of Slovakia's capital launching a new initiative in partnership with the Bratislava City Council, SPAK-EKO, and EcoButt to collect and repurpose discarded cigarettes starting in 2024.

In 2024, Bratislava's waste management firm, Odvoz a Likvidácia Odpadu (OLO), introduced specially designed containers for discarded cigarettes at public events. The goal of this collaboration is to recycle these materials into asphalt for road construction purposes.

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