Future trends of the global tobacco market

Diversification of tobacco products

The diverse needs of customers drive innovation in the tobacco industry. Innovative tobacco products are becoming increasingly popular among smokers. To benefit from this rising market, tobacco manufacturers will put more efforts in diversifying their products.

 

Increased industry concentration

In recent years, mergers and acquisitions in the international tobacco industry are heating up. For example, in 2017, British American Tobacco acquired a 57.8% stake in Reynolds American Tobacco. Therefore, the tobacco industry is likely to become more concentrated as tobacco companies seek M&A opportunities to maintain their market position and increase their profitability.

 

Increase taxes on tobacco products

Raising the price of tobacco products through tobacco tax increases is one of the most effective tobacco control strategies because higher tobacco prices induce existing smokers to quit or reduce smoking and discourage youth from starting smoking. However, this trend will have adverse effects on the tobacco industry.