The nicotine industry is rapidly transforming, balancing revenue from combustion products with innovation in reduced-risk products (RRPs) and functional alternatives. Leading companies diversify portfolios, expand into emerging markets and invest in new categories such as cannabis and supplements. Success depends on brand equity, rapid innovation and adapting to evolving consumer and regulatory landscapes.
Delivery
This report comes in PPT.
Key Findings
Consolidation is the only constant in the industry
The nicotine industry remains highly consolidated, with the top three companies (excluding CNTC) accounting for 56% of global volume in 2024. However, "Others” have rapidly gained share, now representing 24% of industry volume. Much of this growth is driven by vapour products, especially from Chinese exporters
Market concentration varies among categories showing challenges for companies
Market fragmentation varies by category. While cigarettes and heated tobacco products (HTP) are concentrated, e-vapour and tobacco-free oral nicotine are more fragmented. PMI’s acquisition of Zyn has concentrated growth in tobacco-free oral nicotine around market leaders.
Industry transformation continues but more speed is needed
PMI and BAT are leading in diversifying away from combustion products into reduced-risk products (RRPs). By 2024, RRPs account for 20% of PMI’s global volume, up from 8% in 2019, mainly due to HTP growth. Other top companies remain more dependent on cigarettes.
Brand equity is still an asset in the industry that must be utilised
Despite regulatory pressures, brand equity remains strong. The top five brands account for 22% of industry volume, with Marlboro leading globally. Companies focus on protecting premium brands and laddering portfolios to retain consumers trading down. In RRPs, success depends on owning globally relevant brands, rapid innovation and disciplined rollouts.
Transformation is the future of the industry
The industry’s future depends on balancing revenue management, harm reduction and innovation. Companies must adapt to changing consumer needs, regulatory pressures and the evolving role of nicotine in society and invest in functional products and adjacent categories such as cannabis. BAT’s Ryde and Altria’s Proper Wild are examples of this diversification.
Key findings
Companies at a glance
Industry fragmentation by region
Industry fragmentation by category
Dependence on emerging vs developed markets
Category dependence
Granularity of growth
Brand equity and portfolio strategy
Transformation must speed up in response to the decline in combustion products
Combustion remains a key revenue contributor
Growth opportunities in niche combustion segments are enabled by affordability
Profitability, resilience and transformation
JTI acquires Liggett Vector Brands in the US to boost share in discount segment
Imperial looks to capture growth in value cigarettes with new Paramount brand
New flavours , new markets and new products for cigarettes
Smoke-free portfolios continue to expand their footprint
Navigating dual usage and consumer conversion
PMI pushes forward with a broader HTP ecosystem
Vuse Ultra looks to expand range for premium vapour products
JTI continues to expand Ploom’s international presence, including the US
Nicotine pouches, lead by Zyn, continue to expand rapidly
Expansion of nicotine pouches on the back of significant investments
Adapting to changing consumer landscapes
Re-evaluation of nicotine away from Tobacco
New and established players looking for the new oral (re)evolution
Sett offers a buzz without the connection to tobacco or nicotine
The broader consumer need states landscape
BAT leads the charge into CPG products with several investments
Altria focuses on clean energy with supplements, shots and gummies
Altria and KT&G will work together to explore opportunities outside nicotine
PMI dips its toes in cannabis through subsidiary Aspeya (formerly Fertin )
Interplay between the market priorities and strategies
Projected company sales: FAQs
Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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