The Future of the Tobacco Industry
Tobacco Analyst for Euromonitor International, Don Hedley, explains recent public claims that smoking could disappear 30 years from now in some markets and gives a glimpse of the future of the industry.
According to Euromonitor data on smoking prevalence, the last smoker will quit in the USA in 2063, and in Japan in 2072. However, Hedley warns that straight line calculations based on prevalence is irrelevant for a number of reasons:
- Tobacco consumers are resistant to high prices or smoking bans
- Prevalence falls slower when consumers are resistant
Volume trends are a fairer way to calculate. Looking at a CAGR from 2009-2040, based on historical trends, Japan’s tobacco market would be 80% smaller in 2040, and the USA, Brazil and the UK would be 30% smaller.
Price increases coupled with tax hikes often cause consumers to either buy cheaper tobacco products or to stop smoking all together. If volumes fall in countries where tobacco sales are the highest, this could spell doom for the industry…