The consumption of tobacco products in the United Kingdom has, historically, played a pivotal role in the country’s economy.
Recently, however, the industry has been facing mounting challenges and has undergone significant transformation – reflecting global trends in smoking habits and public health concerns.
The UK’s anti-smoking measures and initiatives have been some of the strictest globally.
Roll-your-own (RYO) tobacco is becoming more popular with millennials and other groups experiencing financial difficulties, due to it being cheaper and having a lower rate of taxation than factory-made cigarettes. Andrew Malm, UK Market Manager for Imperial Brands, comments: “There is generally a growing demand for stronger, more intense full flavour tobacco blends and greater variety. This is also driving sales in products such as flavour cards and menthol filter tips.
“Meanwhile, we’re seeing burgeoning consumer demand for unbleached cigarette papers alongside growth in the king size combi paper segment.”
Another interesting trend is that of the cooling sensation. Two of Imperial’s recently updated variants, L&B Blue New Crush Fusion and Embassy Signature New Crush Fusion, provide smokers with the opportunity to enjoy an instant cooling sensation thanks to their new and exclusive “Fusion” large bore filter. Nearly 20% larger than a standard-size bore filter, the “Fusion” filter offers smokers a new smoking experience.
The New Crush Fusion range also features a white tip for the ultimate contemporary look and feel, a resealable foil to guarantee continuous freshness, and special tipping paper to provide the innovative cooling sensation. L&B Blue New Crush Fusion and Embassy Signature New Crush Fusion, which are available for an RRP of £14.10 and £13.80 respectively, provide the same great tobacco blend as the New Crush range, making them ideal for adult smokers who are seeking a new smoking experience at great value.
“With more consumers looking for ways to reduce spending amid soaring household costs, we’re seeing a shift towards lower-priced propositions across the entire tobacco category,” adds Malm. “Stocking value tobacco ranges, such as Regal Signature and our new Paramount range, should be a key area of focus for those looking to tap into this trend.”
The search for value is very much a long-term trend, and smokers are shopping around to find a product they enjoy smoking without hitting them too hard in the pocket. With products in the lowest pricing tiers (economy and value) now worth 72% of all RMC sales (ITUK data), it’s clear that sales in the category are very much driven by demand for value.
Accounting for the biggest share of all tobacco sales (70%, ITUK), the cigarette category holds a huge amount of value for retailers.
In RYO tobacco, while products in the value and economy price tiers account for more than half of sales, the premium price sector in fact holds the largest share of the RYO market at 36% (ITUK). This demonstrates that, despite the focus on value, there are still many adult smokers who remain brand loyal and are willing to pay a higher price for a brand they know and trust.
In cigarettes, Imperial’s top-selling brands are Players, Richmond, L&B Blue and Lambert & Butler. Richmond is also the fastest growing of Imperial’s tobacco brands.
Many of these products are in the Economy and Value sectors, reflecting broader growth in demand nationwide for these types of products.
RYO product sales within the value price sector have increased by 8% year on year (ITUK), making it the fastest growing segment, now accounting for almost a quarter (24%) of all RYO sales (ITUK).
JPS Gold Leaf is Imperial’s top RYO seller, followed by Golden Virginia Original and Riverstone. Embassy Signature is the fastest growing in this category across Imperial’s brands (ITUK).
Imperial recently launched Paramount – a new cigarette brand aimed at adult smokers who are seeking excellent value without compromising on quality.
Paramount uses top-quality, full-flavour Virginia sun-ripened tobacco, meeting the needs of the majority of cigarette smokers in the UK, where more than 90% of cigarettes sold are Virginia blends (ITUK) and 83% are full-flavour tobacco (ITUK).
Its UK introduction further reflects the demand for value options, with the value sector having grown by 5% in the last 12 months alone (ITUK).
With an MRRP of £12.50, Paramount is available in both king-size and super king-size formats, again reflecting the broad demand for both sizes among UK smokers.
Premium Golden Virginia Original hand-rolling tobacco is now available in a 40g pouch size, alongside the established 30g and 50g sizes. This is a response to continued price inflation and pressures on the cost of living, with consumers seeking value and willing to try new options which they see as offering that value. The new size bridges the price gap, offering a more manageable cost when purchasing an individual pouch.
Last year, Imperial also introduced Golden Virginia Amber Blend, which features a smooth, rich and aromatic tobacco taste, alongside lower moisture content from sun-dried leaf, with a novel “zip click” closure which keeps the tobacco fresher for longer.
The first addition to the Golden Virginia range since 2009, GV Amber Blend is available in a 30g pouch at an RRP of £24.55.
Also new to market are a new limited-edition range of Rizla king-size slim papers, for the first time featuring an eye-catching design created by a Rizla customer. This was chosen from more than 580 entries submitted via Instagram for a global competition which reached an audience of more than 2 million people.
The Super Thin Silver papers come in three designs, which form a complete image when placed together. Each bright and colourful pack contains 32 king size papers and is available to buy at an MRRP of just £1.09. Imperial Brands currently holds around 37.5% of all tobacco sales in the UK (ITUK). In factory-made cigarettes, the company holds a 40% share of the value sector and 41% in both economy and mid-price products (ITUK). When it comes to rolling tobacco, Imperial holds 42.5% of the value market, 38% of the economy market, 62.5% of the mid-price market and 26% of premium products (ITUK).
In cigarette papers, Imperial is the dominant force with a market share of nearly 73% across all types (ITUK), mainly thanks to the unique status and enduring appeal of the Rizla brand.
“With household bills and inflation still on the rise, we expect value to remain the dominant trend shaping sales across all nicotine categories. But it’s really important for wholesalers to remember that value means different things to different people. For some, convenience will remain a priority, with shoppers seeking out tobacco solutions that offer added value such as Embassy Signature’s premium features, or the addition of papers and tips in RYO as we offer through Players JPS Easy Rolling Tobacco and Rizla Classic King Size Combi for accessories. While others will be looking for a leading brand that offers the reassurance of a brand name they know they can trust that also delivers on price. Thanks to our wide portfolio of leading brands that deliver on value across every category, we’re in a strong position to help wholesalers cater for these trends in the months and years ahead,” says Malm.
“No two depots are the same so it’s important for wholesalers to take time to consider what customers are buying most frequently, or not buying at all, and then adapting the range accordingly. Ultimately, we’d recommend stocking as broad a range as space allows and then fine tuning this in the weeks and months that follow according to customer feedback and sales. The wholesalers who can remain agile, will be in the best position to cater for their customers and grow their nicotine sales as a result.”
There is a huge variety of different products available on the market today, so deciding what to stock can be a daunting task. Wholesalers are therefore in an excellent position to provide advice to retailers on what products they should be stocking, as well as insights into the latest trends shaping the category, such as the rising demand for value.
By being informed about the market and familiarising themselves and their staff with the different products, terminologies and market trends, wholesalers can provide much needed guidance to retailers about what consumers are buying.
JTI has announced a price reposition of its Mayfair Gold ready-made cigarettes from an RRP of £13.30 to £12.50 for a pack of 20.
Since its launch in October 2023, Mayfair Gold has achieved remarkable success, securing the top spot as the UK’s fastest growing new brand in 2024 (Circana). This has generated an impressive retail sales value of £94.4M (Circana). This new price adjustment positions Mayfair Gold as JTI’s most affordable ready-made cigarette offering, giving retailers the opportunity to stock a trusted, premium Virginia blend tobacco brand at a competitive price.
The RRP reduction is especially timely as the Ultra Value segment continues to lead in market share growth (Circana), now comprising 17.9% (Circana) of the total tobacco market. By offering Mayfair Gold at RRP of £12.50, retailers can capitalise on this upward trend, meeting consumer demand while enhancing their sales potential.
Mark McGuinness, Marketing Director at JTI UK, commented, “We’re incredibly pleased with the performance of Mayfair Gold since its launch, and this price repositioning further strengthens its appeal. With a reduction on the RRP of 80p per pack, we are making the brand even more accessible to shoppers, while providing retailers with an excellent opportunity to increase sales.”
He continued, “As costs continue to rise and consumer budgets tighten, we remain dedicated to offering retailers top-quality products at the most competitive prices, ensuring they can maximise their profit opportunities.”
This price repositioning follows the successful introduction of Mayfair Gold Rolling Tobacco into the Ultra Value category in September 2024, underscoring JTI’s ongoing commitment to innovation and meeting consumer preferences.
John Rennie, Director of Commercial Operations at Philip Morris Ltd, comments: “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 estimate 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 estimate and Nielsen).
Nationally, the percentage of convenience retailers now selling PML’s TEREA and HEETS tobacco sticks has risen by 42% in two years (Nielsen), while cigarette sales declined by 34% during the same period (Nielsen).
This popularity has led Philip Morris to expand the flavour range for IQOS ILUMA to thirteen 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 and Amelia Pearl: Tobacco Blend with Watermelon with Menthol). This enhancement elevates flavour delivery, offering an enriched experience for users of IQOS ILUMA, the UK’s number one heat-not-burn device (PML estimate 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.
“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,” adds Rennie.
Prianka Jhingan, Head of Marketing at Scandinavian Tobacco Group UK, comments: “There’s no doubt it’s cigarillos which are the current success story within cigars. The category barely existed five years ago but sales are now worth just over £146m and they account for more than half of all cigars sold in volume terms. However, cigarillos are not the only cigar segment showing a positive story, as I’m also pleased to report that the medium / large segment is also currently showing some modest value growth too.”
“Whilst value can of course 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 of course our Henri Wintermans Half Corona brand, which is by the 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 of course Christmas.”
Scandinavian Tobacco Group UK has announced the launch of Signature Action Mix cigarillos which are available now.
Signature Action Mix cigarillos contain two capsules combining the flavours of Berry and Mint in ten-packs with an RRP of just £5.85. The new Action Mix cigarillos will be a key focus for STG UK’s growing sales force, who will be targeting over 10,000 convenience stores in the coming months to talk to them about the launch, as well as offering them branded merchandise. There will also be promotions in the wholesale channel of both Action and Action Mix, as well as a significant trade comms campaign to support the launch too.
The Cigarillo category only started five years ago in the UK and is now worth nearly £150m in annual sales, accounting for over 56% of all cigar volume. STG UK launched the original Signature Action brand in the same year, with sales now really taking off, growing by over 50% year on year.
Jhingan adds: “We know many adult smokers continue to look for features they used to enjoy with cigarettes such as flavour, click filters and smaller pack sizes, so these new Signature Action Mix cigarillos should really hit the spot. The continued positive performance of the cigarillos category is showing no sign of slowing, so we’d urge retailers to get behind this exciting launch and enjoy those profitable sales.”
“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,” advises Jhingan. “I also believe it is very important to ensure our products are merchandised in-depot in a way that 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.”
STG regularly has meetings with its wholesale partners, discussing the market dynamics and ensuring their product mix is what the consumers and retailers are asking for. The company also supports wholesaler to retail purchases of NPD through promotions and money off incentives. This can improve footfall into the wholesaler and potentially influence other purchases in depot, so a ‘win win’ for both parties.
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 £417m, and growing at 15.1% (IRI), Republic Technologies is making a major contribution to sustained category growth, thanks to a combination of ground-breaking NPD and strong trade support for both new and established products.
The £121m (IRI) papers sector continues to perform well, with value sales up 8% (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 convenience retailers. Sales in this channel account for more than half of all tobacco accessories sales and are now valued at £233m, growing at 14.3% year-on-year (IRI).
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