The move towards value tobacco products will continue to intensify as pressures on the cost of living remain for many.
More generally, there is also continued demand for more intense tobacco blends and greater variety. This is driving sales in smoking accessory products such as flavour cards and menthol filter tips.
The demand for variety extends into rolling tobacco too. While price can be a factor in a customer’s choice, the unique taste of different tobacco brands and blends is critical as smokers seek different experiences – whether it’s a milder or stronger flavour, or a preference for a sweeter taste.
Andrew Malm, UK Market Manager for Imperial Brands, comments: “Our Golden Virginia brand comprises a trio of high-quality blends – Original, Yellow, and Amber – each with its own unique characteristics and carefully crafted from premium quality tobacco blends to meet differing taste preferences.
“Our longest-established brand, Golden Virginia Original brings together 24 tobaccos for a rich, full-bodied experience, with a higher moisture content ensuring a consistently satisfying smoke.”
The newest addition to the line-up, Golden Virginia Amber is a stronger tasting blend with an intense aroma for a distinctive smoking experience. It is ideal for those looking to explore a different Amber blend without sacrificing quality, all at a competitive price.
Meanwhile, Golden Virginia Yellow has been expertly blended for a smoother, milder taste, with a hint of sweetness ensuring a perfect balance between quality and a lighter smoking experience.
Golden Virginia Original comes in a range of pouch sizes including 30g, 40g and 50g, catering to different customer needs. Golden Virginia Yellow comes in 2 pouch sizes, 30g and 50g, while Golden Virginia Amber comes in 30g.
In FMC, Imperial Brands’ best performers are JPS Players, Richmond, L&B Blue, Lambert & Butler and Embassy, while the best sellers in RYO are Golden Virginia, Gold Leaf JPS, Riverstone and Players (ITUK data).
Last year Imperial Brands introduced Paramount, a new cigarette brand targeting adult smokers who are seeking high quality at exceptional value. Paramount features premium, full-flavour Virginia sun-ripened tobacco, catering to the UK market where the majority of cigarettes feature Virginia blends and full-flavour tobacco (ITUK).
With the value cigarette market growing by 5% in the last year (ITUK) and now accounting for 30% of UK sales (ITUK), Paramount addresses rising demand in this segment. Since its UK launch last year Paramount has become the fastest growing brand in FMC in FY25 (IMB).
“We would advise retailers to check up – or refresh their memories – on the ‘No ID No Sale’ Guidelines. In addition, retailers can visit the No ID No Sale website to download free retail packs which contain POS merchandise such as Statutory Tobacco Notices and Age-Related posters along with ‘Scan Me’ and ‘No ID No Sale!’ badges and shelf wobblers,” adds Malm.
“Alongside this, we’d always advise retailers to check their supply sources rigorously and to continue to be wary of potential suppliers offering products which may be illicit.”
To help retailers increase their product knowledge and stay on top of the key issues influencing the tobacco and vaping categories, Imperial’s Ignite app is the gateway to a range of helpful tools and advice.
Easily accessible through a handy mobile app, Ignite provides retailers with up-to-date category, legislation and product news with ‘1 minute’ reads.
“Addressing the threat posed by illicit products requires a collaborative approach across the industry. Retailers, distributors, and manufacturers must work together to actively combat the illegal trade by staying vigilant and taking swift action when suspicious activity arises,” says Malm.
“The most important thing is education. Retailers can educate their staff members who will communicate with the customer, helping them avoid confusion or misinformation and make informed choices about their purchases. If your team is aware of the risks of illicit tobacco, then they can talk to customers and help them to steer clear.
“If you know, or even just suspect that illicit products are being offered in your area, you need to report it. Our website Suspect It? Report It! will direct you to your local Trading Standards team, or you can report any suspected illicit activity anonymously via the website. We can then use this to advocate with policymakers.”
Japan Tobacco International (JTI), the number one tobacco manufacturer in the UK (Circana), is increasing the number of rolling papers included within its 50g pouch of Rolling Tobacco (RYO) products from 100 to 120.
This upgrade provides added convenience and cost savings by allowing consumers to be more able to roll an entire 50g pouch without needing to buy extra papers, all while enjoying the same great quality.
With Ultra Value products continuing to lead the way in terms of share growth (Circana), stocking 50g RYO pouches provides another value option for existing adult smokers, with one pouch providing 66% more cigarettes compared to a 30g pouch.
The upgrade will apply to all of JTI’s RYO brands – including Amber Leaf 50g (RRP: £43.35) – the number one rolling tobacco brand in the UK (Circana) – Kensitas Club 50g (RRP: £36.50), Benson & Hedges Blue 50g (RRP: £36.50), Sterling Essential 50g (RRP: £36.50), Sterling 50g (RRP: £38.10), Holborn Yellow 50g (RRP: £38.50), Old Holborn Original 50g (RRP: £45.10).
Lisa Anderson, Marketing Director at JTI UK, comments: “We’re pleased to be the first manufacturer to offer 120 papers at no additional cost to retailers or their customers. With existing adult smokers continuing to opt for Value and Ultra Value products, this upgrade in quantity increases the value and convenience of our 50g Rolling Tobacco pouches.”
Commenting on the threat to legitimate business of the illicit tobacco market, a JTI spokesperson says: “Unfortunately, the illicit tobacco market continues to be a big problem in the UK, with our own investigations finding illicit tobacco to be prevalent in every large town and city we investigate. Insufficient funding and powers for enforcement agencies, combined with years of escalating tobacco duty has contributed to the rapid growth of this black market.
“This is a matter we take very seriously, and we’ll continue to assist law enforcement, including carrying out undercover ‘test purchasing’ operations to identify unscrupulous retailers who are selling these unregulated products.
Illicit tobacco is increasingly prevalent in the UK, driven by successive duty increases that push up tobacco prices. Last year the illicit sector grew to unprecedented levels – 30% of cigarette and 54% of roll your own tobacco consumption now comes from illegal and other non-duty paid sources (JTI). These figures underscore the urgent need for a comprehensive strategy to combat the illicit tobacco market.
“Our major concern is that the problem will only get worse if the Government proceeds with the proposed generational smoking ban, taking footfall and profit away from law-abiding stores and giving illegal operators an increased customer base. There is no doubt that retailers are deeply concerned about the generational ban as part of the Tobacco and Vapes Bill. A recent survey found that 78% of retailers feel like a generational ban would lead to more illicit tobacco in their local area (Acorn Retail Promotions).
“The government needs to acknowledge the scale of the problem, and to crack down on illicit tobacco sales as a priority in 2025. The proposed Generational Smoking Ban will only play into the hands of illegal tobacco operators, as adult smokers seek alternative sources for legal products. We urge the government to reconsider its approach and focus on tackling the root causes of the illicit trade.
“We call on retailers to continue reporting any information they have about the sale of illegal tobacco and vapes to Trading Standards through the Citizens Advice consumer helpline on 0808 223 1133.”
John Rennie, Director of Commercial Operations at Philip Morris Ltd, comments: “Despite the popularity of disposable vapes, our data shows that closed-pod systems have grown by 35% since January (Nielsen). Retailers frequently cite ‘convenience’ as a key factor for this shift (KAM). We strongly recommend that retailers begin transitioning to closed-pod systems now, as these systems offer a reliable and convenient alternative, ensuring customer satisfaction and compliance with future regulations. By focusing on closed-pod systems, retailers can provide a seamless transition for legal-aged nicotine users and maintain competitive.
“As the UK moves towards a smoke-free future, it’s crucial for retailers to adopt a multi-category approach. Nicotine pouches, like ZYN, have seen significant growth, with a 91% increase in volume during the first half of 2024 compared to the same period last year (Nielsen). This trend is expected to continue as awareness among adult smokers and legal-aged nicotine users increases. For ZYN, the world’s number one nicotine pouch brand (PMI), we’ve observed an impressive 161% increase in volumes this year compared to the previous year (Nielsen).”
Commenting on how consumer behaviour in the tobacco market has changed in recent years, Rennie adds: “The UK is at a pivotal moment in its journey towards a smoke-free future; a downward trend in demand for combustible tobacco indicates a steady, but continuing decline in smoking itself.
“Over several years, cigarette sales have fallen in the convenience trade and in the grocery multiples, demonstrating that more smokers are abandoning cigarettes, which is always the best choice, or switching to smoke-free alternatives. This is a fundamental shift that all retailers should acknowledge and respond to.”
Within the heated-not-burn category, significant developments are occurring. IQOS, the UK’s number one heat-not-burn device (PML and Nielsen), recently surpassed Marlboro in global net revenues, becoming PMI’s top international nicotine brand. In the UK, IQOS holds a 4.6% national share of the total heated tobacco and cigarette market (PML and Nielsen), with a 9.2% share in London (PML and Nielsen), making it the fourth-largest cigarette and heated tobacco brand in the city. These figures highlight the potential for growth across the country.
Nationally, the percentage of convenience retailers now selling TEREA and HEETS tobacco sticks has risen by 42% in two years (Nielsen), while cigarette sales declined by 34% during the same period (PML and Nielsen). This trend is also reflected in grocery multiples, where sales of IQOS kits grew by 269% between September 2021 and December 2023 (Nielsen), while cigarette sales declined by 27% (Nielsen).
This popularity has led Philip Morris to expand the flavour range for IQOS ILUMA to 13 with the launch of TEREA Pearls. The TEREA Pearls range features innovative capsule technology, enabling users to switch seamlessly from a traditional tobacco blend to a unique flavour with a single click. New flavours include Abora Pearl: Tobacco Blend with Strawberry and Basil (on a click) and Amelia Pearl: Tobacco Blend with Watermelon with Menthol (on a click). This enhancement elevates flavour delivery, offering an enriched experience for users of IQOS ILUMA, the UK’s number one heat-not-burn device (PML and Nielsen).
“The demand for heated tobacco products will continue to grow as more adult smokers seek better alternatives, but the impact will not be limited to combustible tobacco products alone,” says Rennie.
“By offering these innovative products, retailers can meet the evolving preferences of adult smokers and nicotine users, ensuring they stay relevant in a changing market.
“Adopt a multi-category approach. The Philip Morris portfolio includes IQOS ILUMA, the UK’s top heat-not-burn device (PML and Nielsen), ZYN, the leading nicotine pouch brand (PML), and VEEV ONE, a premier closed-pod vape system (PMI). We encourage retailers to stock a broad range of these products to cater to diverse preferences, ensuring they remain competitive as the nicotine market evolves.”
A recent Philip Morris survey revealed that 82% of independent retailers felt it was either ‘likely’ or ‘strongly likely’ that the illicit market for disposable vapes may increase after a possible ban on disposable e-cigarettes (PMI). Illicit products can contain unknown ingredients and lack the quality and standards found with legitimate alternatives. Retailers concerned about stocking compliant products can rely on Philip Morris’ field reps, Wholesale and Cash & Carry channels, and the HEATWAVE OPEN platform for reliable guidance. This comprehensive support ensures retailers can navigate the market confidently and avoid illicit products.
Exclusively available to retailers enrolled in PML’s HEATWAVE OPEN programme, the platform serves as the sole channel for retailers to order IQOS ILUMA, the latest advancement in tobacco heating technology introduced in the UK last year. Retailers can also procure TEREA – the tobacco sticks used exclusively with the IQOS ILUMA device – alongside PML’s broader range of smoke-free products.
In the UK, 73% of adult smokers have tried vaping, but only 23% have stuck with it (Ash). Recognising that no single smoke-free product can cater to every smoker’s preferences, embracing a multi-category approach becomes indispensable for those investing in their smoke-free portfolio.
“IQOS ILUMA complements gantries because it offers a real tobacco taste and satisfaction, with 95% less harmful chemicals compared to cigarettes and enables savings of up to £3,000 a year. It’s these attributes, coupled with evolving preferences among adult smokers and nicotine users, which have elevated IQOS beyond Marlboro,” continues Rennie.
“Retailers must grasp the significance of this pivotal moment and adjust their strategies accordingly. By incorporating innovative products like IQOS ILUMA and TEREA tobacco sticks into their offerings, they not only navigate these shifts, but also thrive in the emerging smoke-free era.”
Roll-your-own specialist Republic Technologies UK is driving increased consumer demand for its brands of choice in the UK’s strong-performing tobacco accessories market.
With the market valued at over £433m, and growing at 14.6% (IRI), Republic Technologies is making a major contribution to sustained category growth, thanks to a combination of ground-breaking NPD, strong retailer relations and trade support for both new and established products.
The £124m (IRI) papers sector continues to perform well, with value sales up 8.4% (IRI) on last year, and Republic Technologies is increasing its presence in this sector by offering consumers more choice within its fast-growing, environmentally-friendly OCB range.
“Shoppers still want quality and value, which OCB delivers, but the plus point for the range is its environmental credentials which offer a clear point of difference vs most other papers, and this is really resonating with roll your own purchasers,” says Gavin Anderson, Sales & Marketing Director at Republic Technologies.
Organic and chlorine free, OCB Rice Papers are made from a blend of rice and organic hemp. The unbleached, ultra-thin papers deliver a premium rolling and slow-burning experience in a natural, brown paper. With 32 papers per pack, OCB Rice is available in both Slim (RRP, £1.10) and Slim & Tips (RRP, £1.73).
Republic Technologies is also underlining its environmental credentials in the £82m (IRI) filters sector with the rollout of Just Paper plastic free Swan filter tips.
In a category boosting first for tobacco accessories, innovative Just Paper Swan Filters provide consumers with an experience that is similar to traditional cellulose acetate filters, but with a much lower environmental impact.
The Swan Just Paper range features a ‘flip-a-tip’ design which dispenses loose extra slim filters, without the use of plastic rods. Each box contains 120 filters, with 10 boxes per outer, with an RRP of £1.45 per consumer unit.
“Choice, innovation and quality are well established drivers of the tobacco accessories category and the Just Paper range delivers in each of those areas. Significantly though, the range has advanced the development of filter tips by offering roll your own consumers a product which not only delivers on performance, but which also has a significantly reduced impact on the environment,” adds Anderson.
Tobacco accessories continues to be a key category for the cash and carry sector. Sales in the convenience channel account for more than half of all tobacco accessories sales and are now valued at £241m, growing at 14% year-on-year (IRI).
Prianka Jhingan, Head of Marketing at Scandinavian Tobacco Group UK, comments: “Our latest data shows the total cigar category to be worth just under £326m, which is a year-on-year value growth of 3.6%. The cigar category is split into four segments, the largest of which is cigarillos which has enjoyed rapid growth over the last five years and are now responsible for over 57% of all cigars sold in volume terms.”
It’s no surprise that price remains important because the search for value is often a motivating driver of purchase for tobacco users.
The cost-of-living crisis has certainly helped shape the category over the last few years meaning value brands and smaller pack sizes are often in demand.
For example, STG’s Moments Blue ten pack is an extremely popular choice in the VFM segment.
However, whilst value can be a motivating driver of purchase in the cigar category and certainly has been to many consumers in recent times, a sizeable portion of adult smokers do often like to take the opportunity to ‘trade-up’ to more premium or larger format cigars.
One such cigar is STG’s Henri Wintermans Half Corona brand, which is by far the UK’s best-selling medium / large cigar and is often given as a gift on special occasions like birthdays, Father’s Day or Christmas. Over the last five years cigarillos have been the real success story within cigars. Sales are now worth just over £151m (IRI) and they account for more than half of all cigars sold in volume terms.
At the beginning of this year STG added a new cigarillo flavour to its portfolio. Signature Action Mix cigarillos contain two capsules combining the flavours of Berry and Mint in ten-packs with an RRP of just £5.85 which is lower than competitor brands, but still with an attractive margin for retailers.
“To maximise cigar sales, it’s important that wholesalers stock the right range rather than a big range, as the top ten brands account for well over 90% of sales. I also believe it is very important to ensure our products are merchandised in-depot in a way that it makes it easier for the retailers to navigate, find them and purchase them. Of course, consistent availability and competitive cost prices are essential, but keeping the range in sight for the retailer to buy, will ensure we have our products at the ‘risk of sale’ within their outlets. Brand blocking is an effective tool to merchandising, along with a clear category versus market trend approach to stocking products,” adds Jhingan.
“We regularly have meetings with our wholesale partners, discussing the market dynamics and ensuring their product mix is what the consumers and retailers are asking for. We also support wholesaler to retail purchases of NPD through promotions and money off incentives. As we know, this can improve footfall into the wholesaler and potentially influence other purchases in depot, so a ‘win win’ for both parties.”
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