Global Cigar Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Global Cigar Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global cigar market was valued at USD 36,673.34 million in 2020, and it is projected to register a CAGR of 11.54% during the forecast period of 2021-2026.

According to numerous surveys, consumers intended to quit smoking due to concerns about elevated health risks if they contracted COVID-19, however, this led to increased cigar smoking. This is attributed to consumers being unable to deviate their minds to other things, ultimately leading to spending more money and time on their smoking habits. According to the government source, the world’s largest cigar producer, the Caribbean nation, is planning to export a record USD 1 billion worth of tobacco products this year, representing a 6% jump over the USD 942 million it sold abroad in 2019.

Increased consumer inclination toward products complimenting the opulent lifestyles, along with the rapidly growing premiumization of cigars, has been lifting the cigar market globally.

In addition, government regulations related to tobacco and tobacco products further influence and remain a key factor in driving the cigar market. For instance, the FDA requires premium cigar manufacturers and distributors to label their products with mandatory warning statements, similar to the wording already required on cigarette and tobacco packaging. These warnings must also be included in any advertisements and/or marketing for premium cigars.

Key Market TrendsContinuous Increase in Smoking Rates Boosting Sales of Conventional Cigars

As economic scenarios improve in developed countries, like the United States, the appeal of the fine machine-made conventional cigar, a relatively affordable option among tobacco products, is expected to weaken, with many consumers likely to prefer premium cigars. In March 2018, the FDA started soliciting opinion and feedback on its plans to regulate cigars in the United States by issuing an Advanced Notice of Proposed Rulemaking (ANPRM) for premium cigars, which is expected to affect conventional cigars' consumption in the United States and North America. Conventional cigar manufacturers are also conducting R&D activities to come up with better tobacco quality and new flavors and are even investing in improving packaging to further the aesthetic appeal. For instance, in 2019, El Artista Cigars launched a range of new cigars with the brand name Buffalo TEN, which claims to offer better tobacco quality with attractive packaging.

Asia Pacific holds the Largest Market Share

In the Asia-Pacific market, the consumption of conventional cigars is higher compared to premium cigars. This is because the tax rates for premium cigars are extremely high. The government bodies in regions like India do not differentiate between premium cigars, which is more of a luxury product, and other tobacco products, such as cigarettes and loose tobacco, which are addictive and very harmful. Furthermore, the ban of e-cigarettes in the developed states of China, including Beijing, is the major factor responsible for the growth of the cigar market in China. The higher prices discourage the youth from smoking cigars and cigarettes and encourage the current smokers to quit. The tobacco tax combines an ad valorem tax and a specific excise tax. The total tobacco tax rate in China is approximately 40% at the retail price level, far below the median range of the tax rates of the international community, which is between 65% and 70%. Therefore, this higher price is responsible for the significant value generation of the tobacco market in the country, despite a decrease in sales volume.

Competitive Landscape

The global cigar market is highly consolidated and competitive, with the strong presence of regional and global players. In the market studied, well-established companies with a known brand attached to their business profile have a higher penetration rate across retail shelves, mostly on account of business expansion and the presence of a higher share of consumer preference across both developed and developing markets. Some major players in the market studied include Swisher International Group, Imperial Brands PLC, Scandinavian Tobacco Group, and Altria Group Inc.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Imperial Brands
Scandinavian Tobacco Group AS
Altria Group Inc.
Habanos SA
Swisher International Inc.
Swedish Match AB
Villiger Sohne AG
Burger Sohne Holding AG (Danneman)
Arnold Andre GmbH & Company KG
Holt's Cigar Company Inc.

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