The global roll-your-own tobacco product market size was valued at USD 7.49 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 4.2% from 2021 to 2028. The growing preference for handâ€rolled or handmade cigarettes as they are relatively less expensive compared to factory-made (FM) cigarettes has been driving the demand for roll-your-own (RYO) tobacco products across the world. Handmade cigarettes are generally subject to fewer regulations and less taxation. As a result, these products are gaining popularity among financially stressed young consumers and lower annual income groups. However, some studies have found that RYO tobacco products' consumption has been increasing in developed countries over the years. Furthermore, many handmade cigarette smokers believe that RYO tobacco products are less harmful than FM cigarettes. This trend has also boosted the growth of the market.
The producers have been offering a wide range of flavors to appeal to young and new consumers. Therefore, flavored tobacco products are generally considered ‘starter’ products. Mint, bubblegum, watermelon, vanilla, and spice are the popular flavors of the industry. Menthol is the most popular flavor in the smoking tobacco industry. As per the U.S. Food and Drug Administration (FDA), as of 2020, over 19.5 million people in the U.S. smoke menthol cigarettes. However, the increasing restrictions and prohibition on the sale of flavored products in various countries, including the U.S., Canada, Brazil, Turkey, and several European countries, have been hampering the product's adoption rate in the market.
The financial crisis caused by the COVID-19 pandemic has increased price sensitivity among the low- and middle-income consumer groups. As a result, the price-conscious consumers are shifting toward lower-cost alternatives from their previous choice of tobacco. This shift in demand is resulting in rising demand for roll-your-own tobacco products. Furthermore, according to a study published by University College London (UCL) in 2018, RYO smokers are less likely to quit smoking than factory-made cigarette consumers. The key reason for RYO smokers’ unwillingness to quit is the comparatively lower cost of RYO products as compared to FM cigarettes. Thus, the market is expected to witness healthy growth in the upcoming years.
The offline distribution channel accounted for a share of more than 85.0% in 2020. The segment includes convenience stores, liquor stores, supermarkets, pharmacies, and newsstands. Tobacco companies make extensive use of the retail environment to reach their customers by advertising and promoting their products. Additionally, most fine-cut tobacco retailers are disproportionately located in heavily populated areas with a significant number of minority and low-income population groups, which make up for a large part of the consumer base for fine-cut loose tobacco.
The online distribution channel is expected to register the fastest CAGR of 5.8% from 2021 to 2028. The use of online shopping portals is popular among the young population group, who are the industry's key consumers. In addition to classic mail-order sales and the many online tobacco products, the increasing prevalence of app-based sellers and delivery services that are significantly popular with young consumers is driving the segment.
RYO tobacco accounted for the largest share of more than 40.0% in 2020. The growing popularity of roll-your-own-tobacco is attributed to the belief that rolling cigarettes is a way to reduce smoking or avoid the toxic chemicals present in commercially manufactured filtered cigarettes. Several smokers also assume that roll-your-own-tobacco products are less harmful because they are more natural. These are generally packaged in pouches. Rolling tobacco pouches and cigarette papers are much less expensive than buying factory-made cigarettes, which has also been contributing to the adoption of roll-your-own-tobacco.
The filter and paper tip segment is projected to register the fastest CAGR of 4.7% from 2021 to 2028. Smokers are increasingly using the filter to decrease the consumption level of tar and other harmful components. Furthermore, manufacturers have been launching environmentally friendly and innovative filter and paper tips in various flavors to increase consumer base and get a competitive benefit over others. For instance, in December 2017, Karma Filter Tips launched its environment-friendly filter tip. These 100% biodegradable products include plant seeds, which breed plants after the disposal of the tip. It also improves the smoking experience.
Europe held the largest share of over 55.0% in 2020. The region has a high smoking rate, which has been driving the demand for the product. According to the WHO, the average smoking rate in Europe was 28.7% in 2018. The factory-made cigarette industry in the U.K. has been witnessing a decline in premium brands' sales and a consistent growth in ROY cigarettes and other roll-your-own tobacco products.
North America is expected to expand at the fastest CAGR of 4.7% from 2021 to 2028. In North America, especially in the U.S., while the demand for cigarettes has been decreasing, the trend for roll-your-own tobacco cigarettes has been gaining popularity among students, young adults, and the female population. The consumption of tobacco products and hand-rolled cigarettes is actively rising among females in the U.S. This factor is boosting the demand for tobacco and related products in the region.
The RYO tobacco products market is characterized by the presence of various well-established players and several small and medium players. However, the industry is dominated by the top international players, such as Imperial Brands; British American Tobacco; and Japan Tobacco Inc.
Product launches are expected to fuel the market growth. For instance, in November 2019, Imperial Tobacco designed a combi-pouch for its economy roll-your-own-tobacco brand Riverstone. The new product comprises 30g of easy-to-roll tobacco, 60 filters, and 60 papers and is available in GBP 11. The launch is designed to attract new consumers to the industry. Such initiatives are expected to boost the adoption rate of the product among consumers. Some prominent players in the global roll-your-own tobacco product market include:
Imperial Brands
British American Tobacco
Japan Tobacco International
Scandinavian Tobacco Group A/S
Altria Group, Inc.
Philip Morris International
HBI International
Curved Papers, Inc.
Karma Filter Tips
Shine Brands
Report Attribute |
Details |
Market size value in 2021 |
USD 7.82 billion |
Revenue forecast in 2028 |
USD 10.42 billion |
Growth Rate |
CAGR of 4.2% from 2021 to 2028 |
Base year for estimation |
2020 |
Historical data |
2016 - 2019 |
Forecast period |
2021 - 2028 |
Quantitative units |
Revenue in USD million/billion and CAGR from 2021 to 2028 |
Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Products, distribution channel, region |
Regional scope |
North America; Europe; Asia Pacific; Central & South America; Middle East & Africa |
Country scope |
U.S.; Germany; U.K.; France; China; Australia; Brazil |
Key companies profiled |
Imperial Brands; British American Tobacco; Japan Tobacco International; Scandinavian Tobacco Group A/S; Altria Group, Inc.; Philip Morris International; HBI International; Curved Papers, Inc.; Karma Filter Tips; Shine Brands |
Customization scope |
Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2028. For the purpose of this study, Grand View Research has segmented the global roll-your-own tobacco product market report on the basis of product, distribution channel, and region:
Products Outlook (Revenue, USD Million, 2016 - 2028)
RYO Tobacco
Rolling Paper & Cigarette Tubes
Injector
Filter & Paper Tip
Distribution Channel Outlook (Revenue, USD Million, 2016 - 2028)
Offline
Online
Regional Outlook (Revenue, USD Million, 2016 - 2028)
North America
U.S.
Europe
Germany
U.K.
France
Asia Pacific
China
Australia
Central & South America
Brazil
Middle East & Africa
b. The global RYO tobacco product market size was estimated at USD 7.49 billion in 2020 and is expected to reach USD 7.82 billion in 2021.
b. The global RYO tobacco product market size is expected to grow at a compound annual growth rate (CAGR) of 4.2% from 2021 to 2028 to reach USD 10.42 billion by 2028.
b. Europe dominated the RYO tobacco product market with a share of 58.0% in 2019. This is attributed to predominant consumption in countries U.K., Germany, France, the Netherlands, Belgium, and Luxembourg.
b. Some key players operating in the RYO tobacco product market include Imperial Brands, British American Tobacco, Scandinavian Tobacco Group A/S, Altria Group, Inc., HBI International, Curved Papers, Inc., Japan Tobacco Inc., Karma Filter Tips, Philip Morris Products S.A., and Shine Papers.
b. Key factors that are driving the RYO tobacco product market growth include low cost as compared to factory-made (FM) cigarettes and a supportive taxation regime for RYO tobacco in some countries.
b. RYO tobacco accounted for the largest share of more than 40.0% in 2020, owing to the belief that rolling cigarettes is a way to reduce smoking or avoid the toxic chemicals present in commercially manufactured filtered cigarettes.
b. The financial crisis caused by the COVID-19 pandemic has increased price sensitivity among the low- and middle-income consumer groups. As a result, the price-conscious consumers are shifting toward lower-cost alternatives, resulting in rising demand for roll-your-own tobacco products.
b. New product launches are key to keep the market growing. For instance, in November 2019, Imperial Tobacco designed a combi-pouch for its economy roll-your-own-tobacco brand Riverstone. This has been a key development in the market, leading to growing demands.
b. North America is expected to expand at the fastest CAGR of 4.7% from 2021 to 2028, due to the growing popularity of roll-your-own tobacco cigarettes among students, young adults, and the female population, especially in the USA.
b. The offline distribution channel accounted for a share of more than 85.0% in 2020, on account of growing investment in advertising, promotion, and mushrooming of the retailers in heavily populated areas with a significant number of minority and low-income population groups.
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