Premium Tobacco Products Market Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Premium Tobacco Products Market Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The premium tobacco products market is projected to register a CAGR of 5.75% during the forecast period, 2022-2027.

Changing consumer lifestyles, increasing working population, and innovative product launches in terms of ingredient, flavor, and tobacco content, are some of the factors driving the premium tobacco products market growth across different regions. Additionally, factors, such as consumer knowledge and an increase in awareness of branded products and services, through digital media and other sources, coupled with the advent of social media are anticipated to boost the demand for premium tobacco products across the worldwide market. With increasing consumer awareness regarding health benefits, vendors are introducing a wide variety of e-liquid made with organic and herbal ingredients that are added to e-cigarettes which are expensive as compared to conventional e-liquids. Similarly, few tobacco products are made from the selected tobacco raw materials and equipped with a highly efficient carbon filter, resulting in a higher price. Therefore, the ongoing product innovation and affinity of consumers towards luxury experience is expected to push the demand in the premium tobacco products market during the forecasted study period.

Key Market TrendsProduct Differentiation as a Key Strategy.

With the rising health-consciousness consumers are increasingly preferring eco-friendly tobacco products which have promoted new product developments in the markets such as organic e-liquids. For example, Vapor Tobacco Manufacturing LLC offers certified organic e-liquids. Their offerings are certified organic under the United States Department of Agriculture's National Organic Program. Eco-friendly cigarettes benefit the environment in more than one way, as these cigarettes reduce the repercussions of deforestation to the environment due to the cultivation of tobacco. Furthermore, various studies suggested that cigarette butts harm marine ecology more than straws do, which in turn encourages key brands to innovate and introduce sustainably manufactured tobacco products. For instance, in 2020, Smokey Treats, a South African company, launched Woodland Craft Cigarettes, which have zero artificial additives and are 100% natural, Woodlands also happen to have biodegradable filters made from wooden sponges.

North America Holds the Largest Market Share

The willingness of consumers to spend on premium cigarettes for an exclusive smoking experience is identified as the key market driver in North America. According to the CDC, in 2020, nearly 13 of every 100 U.S. adults aged 18 years or older (12.5%) currently smokes cigarettes. This means an estimated 30.8 million adults in the United States currently smoke cigarettes. Moreover, according to Truth Initiative Organization, E-cigarettes were the second most commonly used tobacco product, with more than 11 million USA adults reporting use of the product in 2020. This, in turn, makes the North American region a potential market for premium tobacco products as they also have comparatively high consumer spending.

Furthermore, according to a study by Cigar Journal, there were more than 4,553 cigar lounges open in the United States as of 2020, and this number is anticipated to grow in the years to come due primarily to a rise in the social acceptance of smoking and a rise in consumer preference for cigars with a smoother taste. According to UN Comtrade, the United States was by far the leading importer of cigars worldwide in 2021. The country imported almost 1.5 billion U.S. dollars of cigars, cheroots and cigarillos. The rising focus of major premium cigar manufacturers, such as Rocky Patel, Fuente Marketing Ltd., and Padron, on expanding their machine-rolled cigar portfolio is leading to the growth of this market.

Competitive Landscape

The global premium tobacco products market is highly competitive with the strong presence of regional and global players in the market. Major players in the market include British American Tobacco plc, Philip Morris Products S.A, Imperial Brands plc, Japan Tobacco International, and Arturo Fuente, holding a significant share of the market studied. Moreover, existing players in the market are highly focused on innovating existing product lines with ingredients, nicotine/tobacco content, manufacturing process, and flavors that can target more new-age younger consumers.

Additional Benefits:

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

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