Luxury Cigarette Market

Luxury Cigarette Market Overview

According to latest research by Future Market Insights, luxury cigarette sales is expected to growth at a significant CAGR during the forecast period 2021-2031. The availability of luxury cigarettes will see significant growth in the long run, owing to the fact that some people are willing to spend more on their smoking habit.

Availability of high quality cigarettes for curious smokers will also drive the sales of luxury cigarette worldwide in the near future. However, stringent government regulations to obtain organic certifications for cigarette and restrictive conditions of the tobacco industry may hamper the growth of the market to some extent.

What is Driving Demand for Luxury Cigarette?

To attract smokers, companies are using organic, natural, and additive-free tobacco labels, which is driving sales of luxury cigarettes. Farmers are also significantly investing in organic farming methods to enhance the crop yield.

Moreover, over the last few years, smokers have shifted their focus towards cigars and cigarettes developed from organic tobacco, creating an opportunity in the luxury cigarette market. In addition to traditional cigarettes, companies are introducing luxury brands with menthol capsules.

These capsules add menthol flavor to cigarettes to improve the tobacco blend. Luxury cigarettes with flavor capsules are more popular among youngsters owing to the novelty of smoking some flavored cigarettes.

Covid-19 Pandemic Affected the Sales of Cigarettes and Luxury Brands

Because of the unavailability and increased cost of tobacco products, the ongoing covid-19 pandemic has sharply reduced global luxury cigarette sales. Furthermore, tax increases and nationwide lockdowns in various countries are contributing factors to a decline in cigarette and luxury brand sales volume in 2020.

In addition, post the covid-19 pandemic, cigarette sales will be challenged among people who are more health conscious, limited or quit tobacco consumption during the pandemic, and concerned about being infected by coronavirus if they consume tobacco products.

Governments around the world have also increased their awareness programs about the harmful effects of tobacco during the coronavirus pandemic, which may impede market growth to some extent.

However, in order to survive in the market place, companies are improving their strategies and started lowering some of the harmful chemicals used in cigarettes such as tar and nicotine and offering a unique selling proposition to retain their customers.

Additionally, some curious smokers who purchase luxury brands in order to stand out from the crowd are likely to boost luxury cigarette demand over the course of the evaluation period.

China is Currently Dominating the Global Luxury Cigarette Market

More than half of the top cigarette brands sales are generated from Asia-Pacific market. As, cigarette consumption is more associated with low and medium- Human Development Index (HDI) countries. Also, Asian consumers are particularly fond of long-standing, well-reputed and traditional cigarette brands.

China is one of the leading markets for luxury cigarettes globally, as there are around one-third of the world’s total smokers in China. Around 26% of adults aged 15 and above are current smokers in China, which could be the potential customers for luxury cigarette brands in the near future. Moreover, gifting cigarettes and its related products is deeply rooted in Chinese culture particularly in rural areas continues to drive demand for luxury cigarettes.

Thus, the country's demand for luxury cigarettes is expected to grow at a significant rate during the assessment period 2021-31, owing to the fact that gifting cigarettes, primarily luxury cigarettes, during holidays or special occasions is a sign of respect and a status symbol among Chinese people.

Demand for luxury cigarettes in China will be led by the male population, as the consumption of tobacco among adult men is significantly higher compared to females.

Sneha Verghese

Principal Consultant

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Europe Demand Outlook for Luxury Cigarette

Various European luxury cigarette brands are frequently manufactured in Germany, Switzerland, and other European countries with high quality, reliability, and industrial standards.

However, smoking restriction rules and regulations are limiting cigarette production. Over the last few years, the sales of cigarettes have declining not because of restrictions but also because of the increasing prevalence of health diseases related to smoking. According to WHO, in Europe, Greece has the highest rate of tobacco consumption among the adult population (39.1%) and the highest tobacco used by adolescents.

Moreover, the smoking prevalence gap between male and female adults is getting smaller in European countries such as Denmark, Ireland, the Netherlands, Sweden, and the United Kingdom. However, due to the advertising ban on smoking products and more stringent policies, selling and distributing cigarettes is a tricky task for companies.

Thus, they are seeking alternative ways to do a product launch and branding. In order to stay in the market, companies are raising the price of cigarettes to increase their profit per pack. However, raising cigarette prices would not limit adults or young people from smoking, which will remain key to steady demand in the long run.

Who are the Key Manufacturers and Suppliers of Luxury Cigarette?

Some of the leading manufacturers and suppliers of luxury cigarette include

• Reynolds American, Inc.
• Parliament Hybrid
• ITG Brands, LLC
• JTI-Macdonald Corp.
• British American Tobacco PLC
• Philip Morris USA Inc.
• The Nat Sherman Company
• Gallaher Group
• Imperial Tobacco Group
• R. J. Reynolds Tobacco Company
• The Chancellor Tobacco Company
• China Tobacco
• Thailand Tobacco Monopoly
• Joh. Wilh. from Eicken GmbH
• Others.

The smoking experience and tobacco quality are the most important attributes to smokers. Thus, many prominent players in the cigarette market are expanding their product portfolio by significantly investing in premium brands with superior quality, heritage, and more appealing packaging appearance, which makes their luxury brands stand out from mass brands.

Some companies are also creating new smoke-free alternatives and organic flavored tobacco portfolios with fewer or no harmful substances.

The report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain. The report provides in-depth analysis of parent market trends, macro-economic indicators and governing factors along with market attractiveness as per segments.

The report also maps the qualitative impact of various market factors on market segments and geographies.

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Key Segments of Luxury Cigarette Market

By Product Type:

• Flavored
• Non-Flavored

By Format:

• Slim
• Super Slim
• King Size
• Regular

By Sales Channel:

• Specialty Stores
• Multi-brand Stores
• Independent Tobacco Shops
• Online Retailers
• Others

By Region:

• North America
  • US & Canada
• Latin America
  • Brazil, Mexico, Others
• Western Europe
  • EU5
  • Nordics
  • Benelux
• Eastern Europe
• Asia Pacific
  • Australia and New Zealand (ANZ)
  • Greater China
  • India
  • ASEAN
  • Rest of Asia Pacific
• Japan
• Middle East and Africa
  • GCC Countries
  • Other Middle East
  • North Africa
  • South Africa
  • Other Africa