Declining tobacco sales across developed countries forcing tobacco companies to change their focus to developing markets, which have been exhibiting positive trends, analyst research shows

Michelle Rivera

SAN JOSE, California , February 3, 2012 (press release) – The rising health concerns among consumers, lawsuits, restrictions on advertising, limitation on display of tobacco products at retail stores, ban on smoking in public places, and high taxes imposed by the various governments on cigarette companies are the major challenges faced by the Tobacco industry across the globe. However, the tax impositions by governments proved to be a boon to the low premium cigarette brands, with the consumers shifting their loyalties from the branded cigarettes due to high prices. The market players are leveraging their resources to regain their customer base by launching innovative and low-risk products in exotic flavors that are less toxic. However, despite the recent global economic downturn and slowdown in consumption levels of tobacco, market value has been expanding at a sluggish yet steady rate.

Declining consumption of tobacco products across the developed economies has prompted tobacco companies to augment their focus on developing markets, which have been exhibiting positive trends. Major factors driving this growth include rising demand for international brands and favorable socio-economic factors. Though smoking prevalence among adult males across developing markets is high, per capita consumption in these markets has remained relatively low when compared to the developed markets. As regulations and bans became prevalent across developed markets such as the US, manufacturers shifted their focus towards expanding existing smokeless tobacco range offering cigarette consumers an alternative to tobacco. Moist snuff segment witnessed positive growth during 2009-2010 while chewing tobacco segment continued to decline, despite the increasing preference for smokeless tobacco from US consumers, as new consumers entering smokeless tobacco category are more inclined towards moist snuff.

The global tobacco market has suffered several reverses because of various stringent regulations promulgated by governments across the world. The rules and regulations have restricted promotional activities of tobacco companies to a large extent. Low Tar Cigarettes are expected to do well in the market with the industry being optimistic to sail through the disturbing phase by estimating the publicity run against cigarettes to be minimal.

Traditionally, premium cigar brands from any region other than Cuba were unpopular and were regarded to be of poor quality. The popularity of premium cigars began to rise in the US from mid 1990s onwards with cigars becoming a fashion accessory. This sudden surge soon began to stabilize mainly due to the high price of cigars. Nonetheless, this renewed interest in the higher end sector encouraged adventurous smokers to try non-Cuban cigars. The traditionally characteristic qualities of Cuban cigars are becoming common among non-Cuban brands as well. Though the consumer base for cigars as a whole began to shrink, the market was left with a knowledgeable consumer group. These knowledgeable consumers started seeking other alternatives to Cuban cigars. This in turn has increased the popularity of non-Cuban cigars.

The research report titled "Tobacco: A Global Outlook" announced by Global Industry Analysts Inc., provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report briefly discusses the overview and trends in the global tobacco market, demand patterns for various types of tobacco, and the regulatory environment governing the industry. The report also recapitulates recent noteworthy mergers, acquisitions, and other strategic developments. Regional markets briefly abstracted include the United States, Canada, France, Germany, UK, Japan, China and India among others. Market discussions in the report are punctuated with fact-rich market data tables. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of companies worldwide.

For more details about this comprehensive industry report, please visit -
www.strategyr.com/Tobacco_Industry_Market_Report.asp

About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.