Smokers remain loyal to brands and sizes as RYO takes more of total tobacco sales
WHILE many firms and famous brands have entered the RYO market in recent times the market in Scotland is still dominated by brands of the two major tobacco firms.
JTI, quoting Nielsen figures, says its own market-leading Amber Leaf brand doesn’t just take the top spot in Scotland but fills the top three places with its 12.5g, 25g and 50g packs, is in volume sales terms the biggest brand in all tobacco categories in Scotland, and takes 71.5% of mid-price RYO sales north of the border.
Its value RYO brand Sterling is also said to be growing in Scotland.
JTI head of communications Jeremy Blackburn said RYO remains one of the most buoyant part of the tobacco market in the UK. It’s now worth £2bn and is growing by 9.2% year on year.
Value brands for the fastest growing price segment in UK RYO.
To date the firm says the tobacco display ban has had little effect on sales or sales patterns.
Retailers who prepared well and who maintain range and availability remain a destination for adult smokers, Blackburn said.
JTI is one of a number of companies who have launched many different packs and formats of RYO products in recent times. Those have included, said Blackburn, “brand extensions that are in tune with market trends as well as reduced outer sizes, limited-edition packs and smaller pack formats”.
Those smaller formats responded to consumer demand for affordable price points. Changes to minimum 30g packs under the European Tobacco Products Directive 2, to be enforced on manufacturers next year, will mean that adult consumer demand will not be able to be met legitimately and are likely to increase the attractiveness of illegally distributed RYO products, he argued.
The TPD rules will allow a sell through period for retailers until May 2017.
• While UK figures show considerable growth for RYO, as well as growth for value lines and small packs, there are differences between Scotland and the rest of the UK and indeed significant variety of sales trends within Scotland itself, said Darren Atwell, retail business manager at Imperial Tobacco. Quoting Imperial Tobacco UK estimates he said RYO consumption accounts for a thumping 49.5% equivalent of all duty-paid sticks smoked in the south-west of England but only 19.3% in Glasgow and 26.1% in the rest of Scotland. In all of Scotland RYO’s share is 24.2% of duty-paid sticks, a little up on last year when it was 23.8%.
And compared to the overall UK market Scottish RYO smokers go more for economy and premium brands rather than the cheapest brands in the value segment. And although almost 12% of the UK market is now taken by packs smaller than 12.5g in Scotland the figure is under 9%.
Despite challenges including the display ban Imperial Tobacco says its RYO portfolio is thriving, partly through substantial new product development.
“For example our innovative GV Smooth RYO family has expanded with the launch of GV Midnight and GV Sunrise”, said Atwell. “Both products are available in 10g format, include papers and have a competitive RRP of £3.60.
“Players Gold Leaf is available in a 9g pack complete with papers enabling adult smokers to make 22 hand-rolled cigarettes for just £3.05.”
