Heated Tobacco Predicted to See 691% Growth in Five Years
LONDON — The next step in tobacco innovation is on target to deliver a multi-billion hit to the global cigarette market.
According to data from Euromonitor International, the cigarettes market will record a $7.7-billion loss by 2021, compensated by the $13.2-billion growth in heated tobacco products sales in the same period.
The research firm's new data shows that in 2016, for the first time in decades, the value of the global cigarettes category as a proportion of total tobacco sales fell below 90 percent and by 2021 it will reach 86 percent.
While cigarettes sales decline, the new research highlights growth in the use of vapor products, but also further changes within this segment, according to Euromonitor.
"The continued growth in vapor products and in particular the emergence of heated tobacco as a viable alternative mode of consumption, represent the major element of disruption for the tobacco industry," said Shane MacGuill, head of tobacco research at Euromonitor International.
Euromonitor's latest research shows that heated tobacco will be the fastest-growing tobacco category in the next five years — on a course to reach $15.4 billion in 2021, up from $2 billion in 2016.The increase represents 691-percent growth.
According to the new data, in 2016:
- Japan was the largest heated tobacco market, accounting for a share of 96 percent of heated tobacco products global sales.
- Germany was the second largest heated tobacco market, but the United States will take its place by 2021.
- The third and fourth largest markets for heated tobacco products were Switzerland and Portugal, respectively, which were also among the fastest growing markets.
"We believe that heated tobacco will gain a solid presence in at least 35 global markets by 2021, accounting for a share of 3.5 percent of total global cigarettes and heated tobacco value," MacGuill said. "Heated tobacco prospects are strong and strengthening. On this evidence, it is a truly a coming force in global tobacco."