Food & Beverages

Innovation and Adding Value in Tobacco

  • CAN376807
  • 70 Pages
  • February 2015
  • Food & Beverages
Summary
Faced with the sales volume of cigarettes falling in many advanced economies, tobacco companies have traditionally reacted by increasing their presence in the emerging economies of Asia, Latin America, Eastern Europe, Africa and the Middle East. However, a more recent trend has been to add greater value to products in North America, Western Europe and the advanced economies of Asia.


Synopsis
- Analyze the prevalence of smoking around the world and how this translates into sales of tobacco products.

- Examine current innovation, particularly new product development from some of the world's largest premium cigarette brands.

- Study the market for additive-free and organic products. Although arguably paradoxical, the health trend is particularly conspicuous in tobacco.

- Use recommendations on how to target specific demographic groups and need states by way of packaging, offering limited editions and storytelling.

- Consider how to achieve branding efficiencies and the prioritization of countries for the global rollout of a new brand or product.

ReasonsToBuy
- What proportion of consumers smoke, by demographic and by country, and how frequently?

- How much is the tobacco industry worth and what are the growth areas to watch?

- What is the focus for new product development and how should this change?

- What specifically can tobacco manufacturers do to appeal to consumers and add value?

- How can manufacturers gain a competitive advantage?

Key Highlights
An estimated 26% of the world's adults are smokers - of whom just over two fifths (41%) smoke daily. The prevalence of smoking among adults varies by age. Overall it peaks among 25-34 year-olds, of whom 35% smoke, compared to 17% of those aged 65-plus.

The global market for tobacco products is expected to grow at a CAGR of 4.4% between 2008 and 2018. Asia Pacific, the largest regional market throughout this period, will get proportionately greater every year. In 2008 it was just over 1.5 times larger than the European market; by 2018 it is forecast to be more than twice its size.

The most common demographic that tobacco companies develop specific products for is the female market. This tends to be through flavorings, product design or packaging. An increasingly recognized market for tobacco companies is gay, lesbian and bisexual people, who tend to have higher smoking rates.
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