Abstract
The cigarette and smoking cessation market, of which over 99% comes from cigarette sales, faces challenges in the form of consumer acceptance, legislation and taxes. Changes in the way smoking is perceived are standing in the way of younger people starting smoking, which tends to be the grounds for lifelong patronage. In this report, Mintel offers a comprehensive review of where the industry stands and how it is changing.
Analysis and insights offered include:
- Where should manufacturers turn for revenue growth?
- How health concerns are affecting the market, and where they offer potential for growth.
- The impact of increased competition offering nicotine delivery.
- How legislation affects the market.
- How retailers can increase sales, and how manufacturers can benefit from creative retail choices.
Insights are supported by exclusive Mintel consumer research, which delves into topics such as:
- How the number of smokers and the amount they are smoking is changing, and why.
- What is the primary deterrent to smoking cessation aid usage?
- What motivates changes in cigarette and NRT brand?
- How various demographics differ in attitudes towards cigarettes and quitting smoking.
Table of Contents
- Scope and Themes
- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Cigarette market remains strong, despite legislation, social mores
- Cessation market tiny relative to cigarette market
- Retailing separately not beneficial to NRT sales
- Convenience stores main retail location, followed by tobacco stores
- Hard to compete with big tobacco companies
- GlaxoSmithKline dominates smoking cessation market
- Product innovation directly addresses increased difficulty of lighting up
- Market Size and Forecast--Tobacco Products
- Key points
- Smoking rates stabilize
- Cost drives the market for cigarettes down
- Smoking fewer cigarettes means less sales
- Smoking habits follow trends set by legislation
- Strong potential for growth in NRTs, smokeless tobacco
- Figure 1: Total U.S. sales and forecast of cigarettes and tobacco products, at current prices, 2003-10
- Figure 2: Total U.S. sales and forecast of cigarettes and tobacco products, at constant prices, 2003-10
- Market Size and Forecast--Cessation Products
- Key points
- Are NRTs effective as a cessation aid?
- Continued increase in cigarette prices should benefit cessation aids
- Chronic use benefits market
- Figure 3: U.S. FDMx sales and forecast of smoking cessation products, at current prices, 2003-11
- Figure 4: U.S. FDMx sales and forecast of smoking cessation products, at current prices and constant prices, 2003-11
- Competitive Context
- Smokeless cigarettes and nicotine delivery systems
- Zyban (buproprion/Wellbutrin)
- Figure 5: Brand of smoking cessation aid used, 2003 and 2007
- Non-product-based methods of quitting smoking
- Segment Performance--Overview
- Key points
- Tobacco segment performance
- New products and private label cannibalize sales, rather than adding to them
- Smokers have an oral fixation, as it turns out
- Figure 6: FDMx sales of cessation products, by segment, 2003-07
- Figure 7: FDMx sales of cessation product, by segment, 2005 and 2007
- Retail Channels
- Key points
- Promotion affects retail distribution of cigarettes
- Consumers perceive smoking cessation aids as a pharmaceutical
- Competition from Internet, black market sales
- Figure 8: Cigarette sales, by retail channel, 2003 and 2007
- Retail Channels--C-stores
- Key points
- Convenience and price make c-stores/gas stations the leading distribution outlet
- Price
- Figure 9: Convenience store sales of cigarettes and tobacco products, at current prices, 2003-07
- Figure 10: Convenience store sales of cigarettes and tobacco products, at constant prices, 2003-07
- Retail Channels--Tobacco Stores
- Key points
- Quality and selection important to today' s smoker
- Internet necessary for tobacco store success
- Figure 11: Tobacco store sales of cigarettes and tobacco products, at current prices, 2003-07
- Figure 12: Tobacco store sales of cigarettes and tobacco products, at constant prices, 2003-07
- Market Drivers
- Health-concerned city and state policies make smoking difficult
- Figure 13: Attitudes towards smoking legislation, January 2008
- Corporate wellness programs
- Reward and punishment
- Leading Companies
- Key points
- Philip Morris carries over half the market
- Figure 14: FDMx sales of leading tobacco and anti-smoking companies, 2006 and 2007
- Brand Share--Cigarettes and Other Tobacco Products
- Key points
- If I' m going to do it, I might as well do it up
- New lines, new campaigns bolster Camel sales
- Newport aided by popularity in urban market
- Brand awareness stronger than manufacturer awareness
- Figure 15: FDMx brand sales of cigarettes and tobacco products in the U.S., 2006 and 2007
- Lighter smokers spend more per pack
- Figure 16: Branded or private label cigarette smoked, by daily cigarette consumption, May 2006-June 2007
- Brand Share--Smoking Cessation Products
- Key points
- Private label continues to gain ground
- Figure 17: FDMx brand sales of nicotine replacement treatments, 2006 and 2007
- Brand Qualities--Changes for Camel, Marlboro, Kool
- Overview
- Camel chases women
- Marlboro Smooth takes aim at Newport and Kool
- Kool XL targets younger smokers
- Waiting for the black market to sour
- Innovation and Innovators
- Key points
- Marlboro offers up a quicker fix
- Invasion of the potentially reduced-exposure products
- Smokeless Snus
- Advertising and Promotion
- Regulated environment favors discounts and sponsorships
- Online promotions limited to consumers with substantial initiative
- Figure 18: Ad spending by tobacco and anti-smoking brands, 2005 and 2006
- Marlboro continues to forego traditional avenues of promotion
- Camel backs down from print ads
- GlaxoSmithKline
- NicoDerm
- Figure 19: TV ad for GlaxoSmithKline' s NicoDerm CQ nicotine patch, 2008
- Nicorette
- Figure 20: TV ad for GlaxoSmithKline' s Nicorette Anti-smoking gum, 2007
- Commit
- Figure 21: TV ad for GlaxoSmithKline' s Commit anti-smoking lozenges, cherry flavor, 2007
- Figure 22: TV ad for GlaxoSmithKline' s Commit anti-smoking lozenges, mint flavor, 2007
- Figure 23: TV ad for GlaxoSmithKline' s Commit anti-smoking lozenges, 2007
- Smoking Habits and History
- Two thirds of current regular smokers have tried to quit
- Figure 24: Smoker status, by age, January 2008
- Incidence of smoking
- Figure 25: Cigarette smoking, 2001 and 2007
- Figure 26: Usage of cigarettes, by age, May 2006-June 2007
- Efforts to Quit Smoking
- Usage of nicotine replacement therapy products
- Figure 27: Use of anti-smoking products in the previous year, 2001 and 2007
- Vast majority of current smokers have tried to quit multiple times
- Figure 28: Number of quit smoking attempts, by smoker status, January 2008
- Products Used in Efforts to Quit Smoking
- "Cold turkey" remains the most popular quitting method
- Figure 29: Type of anti-smoking product tried in last 12 months, by daily cigarette consumption, May 2006-June 2007
- Cessation methods compared between all attempts and successful attempts
- Figure 30: Ways of trying to quit smoking, by attempt, January 2008
- Private label drives increased usage of nicotine gum
- Figure 31: Method tried to quit smoking in previous year, 2001 and 2007
- Frequency of Cigarette Usage
- Figure 32: Number of cigarettes smoked per day, 2001 and 2007
- Men who smoke average two more cigarettes per day than women
- Figure 33: Number of cigarettes smoked daily, by gender, May 2006-June 2007
- Older smokers and whites should be targeted for cessation products
- Figure 34: Number of cigarettes smoked daily, by age, May 2006-June 2007
- Figure 35: Number of cigarettes smoked daily, by race/ethnicity, May 2006-June 2007
- Targeting spouses and the gift market for cessation aids
- Figure 36: Number of cigarettes smoked daily, by marital status, May 2006-June 2007
- Race and Ethnicity
- Figure 37: Smoking, by race/ethnicity, 2003 and 2007
- Figure 38: Attitudes towards smoking-related illness, by race/ethnicity, January 2008
- Menthol use rising due to the increased importance of black smokers
- Figure 39: Type of cigarette smoked, 2003 and 2007
- Attitudes and Motivations Regarding Smoking
- Introduction
- Compromise solutions and addiction as an illness
- Figure 40: Smoking/quitting, compromise solutions, and opinions on addiction as an illness, January 2008
- More than one in three current smokers have never considered long-term
health impacts
- Figure 41: Expected outcome of smoking habit, January 2008
- You get what you pay for
- Figure 42: Existence of favorite brand and interest in quality, January 2008
- Striking interest in better-for-you product
- Figure 43: Attitudes towards making choices of what to smoke, January 2008
- Figure 44: Attitudes towards quitting smoking, January 2008
- Why the majority of current smokers will not try NRTs
- Figure 45: Attitudes towards cessation aids, January 2008
- Reasons for Smoking
- Smokers start young
- Calming the nerves
- Nicotine addiction may be a symptom of a larger psychiatric problem
- Smoking may be a symptom of a larger health problem
- Figure 46: Usage of cigarettes, by ailment, January 2008
- Figure 47: General attitudes and behaviors around smoking, January 2008
- Appendix: Trade Associations
