World Market for Tobacco

Delivery

This report comes in PPT.

Key findings

Cigarettes volume divide

It was a tale of two tobacco markets in 2022, as flat overall global cigarettes volume, balanced growth in only two regions - Asia Pacific and Latin America - against very significant declines, particularly in developed markets. Western Europe saw its largest cigarette declines in a decade and North America suffered the largest volume decline on record.

Cigarettes value falters

The industry was unable to make revenue compensate for volume declines in 2022 as constant value ex-China declined by over 3%. The average pack price at a global level ex China was flat at USD3.60. This presages further struggles that the industry will have over the forecast period in generating revenue growth from a down-trading category.

Illicit trade ticks up

Illicit trade penetration continued to grow after its pandemic plateau reaching just under 12% of total global volume ex China (up from 11.4% in 2021). In the longer term, higher excise taxes and more price sensitivity among global consumers are predicted to push share to just under 14% by 2027, as the economic impact of the pandemic continues to unfurl.

Heated tobacco diversifies

2022 was the year of the single use vapour product, growing at 91% in value terms (nearly 1,000% in its key Western Europe region) - growth that masks even faster total expansion in the illicit space. However, it is highly vulnerable to regulatory threat on two fronts, firstly from its perceived success with younger consumers and secondly, from sustainability considerations.

Single use makes a mark

Heated tobacco continued to expand in 2022, with growth of 20% in stick volumes, down from 2021’s 28%, bringing the category to just under 150 billion sticks globally. Growth is increasingly driven by geographic diversification as the most mature region Asia Pacific and Eastern Europe slowed to 14% and 18% but Western Europe held strong at 41%.