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Tobacco Market Size To Reach $1,049.87 Billion By 2030

Tobacco Market Size To Reach $1,049.87 Billion By 2030

February 2024 | Report Format: Electronic (PDF)

Tobacco Market Growth & Trends

The global tobacco market size is expected to reach USD 1049.87 billion by 2030, expanding at a CAGR of 2.5% from 2024 to 2030, according to a new report by Grand View Research, Inc. The growing demand from developing nations, coupled with the rising proliferation of next-generation products across the globe is driving the demand for tobacco. Furthermore, the high expenditure on the marketing and discounting of products undertaken by major tobacco companies is further driving the industry growth.

Consumption of tobacco through cigarettes has been the predominant factor driving market growth. According to WHO’s 2022 report, there are more than a billion smokers globally and more than 80% of the smokers live in middle-income countries. Government cessation policies have also not been able to cut down the smoking habits of the people. The tobacco demand is inelastic and therefore, a major factor driving the market growth. Furthermore, the introduction of next-generation products by major tobacco companies is another factor expected to fuel the market during the forecast period.

The industry segmented based on product was led by cigarettes. However, the next-generation products (NGPs) are projected to be the fastest-growing segments during the forecast period. The introduction of products such as oral nicotine, e-cigarettes & vape products is witnessing an increased proliferation, especially among youths and millennials. Furthermore, major tobacco companies are also stepping up their strategies to incorporate the growing trend of NGPs. For instance, in November 2022, Philip Morris International introduced a tobacco heating system known as BONDS by IQOS, which utilizes heat instead of combustion to release the flavors of tobacco. This innovative technology significantly reduces the emission of harmful chemicals, boasting a remarkable 95% reduction when compared to traditional cigarettes. The product is now available in the Philippines and is specifically designed to cater to adult smokers, offering them a range of tobacco tastes to choose from.

The supermarket/hypermarket segment accounted for the largest market share in 2023 and is expected to maintain its dominance over the forecast period. The offline category which includes supermarkets and hypermarkets, smoke stores, and convenience stores among others has accounted for the largest share in the market due to the large volume of stores spread across the world, as well as the convenience they offer. Asia Pacific dominated the tobacco industry globally, primarily due to its huge population. Furthermore, the incremental growth of the working class and the stress associated with their jobs are also driving the consumption of tobacco.

The market for tobacco is characterized by the presence of major global players and fewer small regional players. The key market participants include Scandinavian Tobacco Group A/S, Swedish Match AB, Altria Group, Inc., KT&G Corp., Imperial Brands, Philip Morris Products S.A., British American Tobacco, Japan Tobacco Inc., China Tobacco., and ITC Limited among others.

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Tobacco Market Report Highlights

Next-generation products are projected to grow at a CAGR of 5.1% from 2024 to 2030 in the forecasted period owing to all the major companies diversifying their product portfolios to include more smoke-free and heated tobacco offerings
Supermarket/hypermarket channels held the market share of 50.3% in 2023. Consumers prefer these stores as they offer considerable discounts and offers and are present in close proximity to the users
Asia Pacific held the largest revenue share of 60.8% in 2023. The rising number of the working population and the resultant addition of tobacco consumers are driving the market growth