The global tobacco market size was valued at USD 932.11 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 1.8% from 2021 to 2028. It has been observed that the number of smokers has been rising at the global level. This trend is further propelled by the launch of new products, including various flavored tobacco products such as clove cigarettes and menthol cigars. These factors together are expected to drive the market over the next few years. Moreover, over the past few years, with consumers gradually inclining toward smoking alternatives, the introduction of innovative tobacco products in varied taste options has become imperative. As a result, manufacturers have focused on premium tobacco products produced with flue-cured tobacco and fine whole leaf.
According to a report released by the American Lung Association, a substantial rise has been noticed among the people who smoke less than 15 cigarettes per day from 2016 to 2017. A surge in the number of adults who had ever tried electronic cigarettes has been observed along with this. The number of such users increased from 12.6% to 14.4% from 2014 to 2017. Similarly, in the U.S., it is seen that the adoption of electronic cigarettes has been increased by 1650% among school students from 2011 to 2019.
Companies have been creating new products to keep up with millennials' changing demands and generation Z. For instance, in May 2019, Philip Morris launched IQOS. This electronic device heats paper-wrapped tobacco-filled sticks and as a result, generates nicotine-containing aerosol. The product has been launched as an alternative to cigarettes.
The launch of non-hazardous products is expected to remain an eminent factor for the industry's key players over the next few years. For instance, in July 2018, Juul Labs entered the U.K. market to launch its new vaping device. The product is pretty small and is compared to the size of a flash drive. With the product, the company plans to target adult smokers. The product will be launched in 250 vape shops across the U.K. The starter pack contains the device and four nicotine pods and is priced at GBP 39.66.
The COVID-19 pandemic has had a substantial negative impact on the tobacco industry owing to the nature of the disease. It is a deadly viral infectious disease that attacks the lungs and severely impacts breathing. People with significant tobacco consumption or any tobacco addiction have been recognized as most vulnerable people of the illness, including Severe Acute Respiratory Syndrome (SARS), Middle East Respiratory Syndrome Coronavirus (MERS-CoV), cardiovascular diseases, and other pulmonary diseases. Therefore, any smokeless and smoke products are receiving negative attention due to their associated health risks.
Cigarettes held the largest share of more than 75.0% in 2020. Over the past few years, the popularity of growing partying and pubbing culture among millennials and working-class populations has propelled the demand for various flavored and unflavored cigarettes across the globe. In addition to this, emerging economies such as India, Thailand, and China are witnessing a decent rise in cigarette demand due to rising youngsters in these countries.
The next-generation tobacco products segment is anticipated to be the fastest-growing segment with a CAGR of 2.8% from 2021 to 2028. Rising consumer preference for less harmful tobacco products over cigarettes can be attributed to the growing need to live a healthy lifestyle. This has driven the demand for the consumption of next-generation products in the tobacco sector. The North American market is gaining momentum and is anticipated to witness promising growth in the demand for next-generation products owing to the increasing consumer disposable income, rising number of product launches, and the availability of superior-quality products.
Asia Pacific emerged as the largest regional market with a share of more than 35.0% in 2020. Improvement in retail infrastructure and extensive brand campaigns by leading tobacco manufacturing firms, including Philip Morris International and British American Tobacco, in key markets, including China, Bangladesh, India, and the Philippines, are expected to remain favorable factors for the market growth in this region. Furthermore, the industry participants are targeting the consumers by launching flavored cigarettes, which are popular among consumers, particularly youth and millennials.
The Middle East and Africa region is anticipated to be the fastest-growing regional market with a CAGR of 3.0% from 2021 to 2028. The region has been witnessing consistent growth in the adoption of tobacco consumption. Egyptian adolescents make a significant proportion of this consumer segment. A significant factor contributing to the adoption of these products is the relatively low prices of tobacco products in Egypt.
The market is consolidated in nature and is characterized by various well-established players and several small and medium players. Major players in the market adopt several strategies, including mergers & acquisitions, collaborations, product launches, and expansion of distribution channels, in order to capture a significant market share and expand their customer base across the globe. In January 2020, the Scandinavian Tobacco Group completed the acquisition of Agio Beheer B.V. from Highlands Beheer B.V. Royal Agio Cigars group. The subsidiary of Agio Beheer B.V. will provide the acquirer access to a robust product portfolio in machine-made cigar markets. Some prominent players in the global tobacco market include:
Pyxus International, Inc.
Swedish Match AB
Altria Group, Inc.
Korea Tobacco & Ginseng Corporation
Imperial Brands
Philip Morris International
British American Tobacco
Japan Tobacco Inc.
Scandinavian Tobacco Group
ITC Limited
China National Tobacco Corporation
Report Attribute |
Details |
Market size value in 2021 |
USD 949.82 billion |
Revenue forecast in 2028 |
USD 1,073.79 billion |
Growth Rate |
CAGR of 1.8% from 2021 to 2028 |
Base year for estimation |
2020 |
Historical data |
2016 - 2019 |
Forecast period |
2021 - 2028 |
Quantitative units |
Revenue in USD billion and CAGR from 2021 to 2028 |
Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Product, region |
Regional scope |
North America; Europe; Asia Pacific; Central & South America; MEA |
Country scope |
U.S.; Turkey; Russia; China; India; Brazil; Egypt |
Key companies profiled |
Pyxus International, Inc.; Swedish Match AB; Altria Group, Inc.; Korea Tobacco & Ginseng Corporation; Imperial Brands; Philip Morris International; British American Tobacco; Japan Tobacco Inc.; Scandinavian Tobacco Group; ITC Limited; China National Tobacco Corporation |
Customization scope |
Free report customization (equivalent 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 tobacco market report on the basis of product and region:
Product Outlook (Revenue, USD Billion, 2016 - 2028)
Smokeless
Cigarettes
Cigar & Cigarillos
Next Generation Products
Waterpipes
Others
Regional Outlook (Revenue, USD Billion, 2016 - 2028)
North America
U.S.
Europe
Turkey
Russia
Asia Pacific
China
India
Central & South America
Brazil
Middle East & Africa
Egypt
b. The global tobacco market size was estimated at USD 932.11 billion in 2020 and is expected to reach USD 949.82 billion in 2021.
b. The global tobacco market is expected to grow at a compound annual growth rate of 1.8% from 2021 to 2028 to reach USD 1,073.19 billion by 2028.
b. Asia Pacific dominated the tobacco market with a share of 36.59% in 2019. This is attributed to the high consumption of tobacco products in countries including China, Philippines, Vietnam, Malaysia, India, Thailand, Bangladesh, and Indonesia.
b. Some key players operating in the tobacco market include Pyxus International, Inc., Swedish Match, ITC Limited, Altria Group, Inc., KT&G Corp., PHILIP MORRIS PRODUCTS S.A., British American Tobacco, JT International SA, Imperial Brands, Universal Corporation, and Scandinavian Tobacco Group A/S.
b. Key factors that are driving the tobacco market growth include increasing consumer disposable income and the availability of superior products such as customized e-cigarettes and pipes.
b. Cigarettes held the largest share of more than 75.0% in the tobacco market in 2020, due to the growing popularity of partying and pubbing culture among millennials and working-class populations.
b. The Middle East & Africa region is anticipated to be the fastest-growing region in the tobacco market with a CAGR of 3.0% from 2021 to 2028, as the region is continuously witnessing consistent growth in the adoption of tobacco consumption.
b. In January 2020, the Scandinavian Tobacco Group completed the acquisition of Agio Beheer B.V. from Highlands Beheer B.V. Royal Agio Cigars group. The subsidiary of Agio Beheer B.V. will provide the acquirer access to a robust product portfolio in machine-made cigar markets.
b. On the basis of product type, the tobacco market constitutes segments such as smokeless tobacco, cigarettes, cigar & cigarillos, next-generation, products, water pipes, and others.
b. The COVID-19 pandemic has had a substantial negative impact on the tobacco market owing to the nature of the disease. It is a deadly viral infectious disease that attacks the lungs and severely impacts breathing, making tobacco users highly vulnerable.
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