Value driving growth as smokers broaden horizons
BRAND loyalty may still be key in the tobacco category, but adult smokers are increasingly purchasing a variety of nicotine products from their local convenience store.
That’s the view of Duncan Cunningham, UK corporate affairs director at Imperial Tobacco, who suggested smokers’ purchasing decisions are more occasion led than before.
“A trend that we’ve seen developing in recent years is a move towards more of a nicotine portfolio with adult smokers buying different roll your own (RYO) and factory made cigarette (FMC) products to suit different occasions.
“In fact, figures show a quarter of consumers are now dual smokers,” he said.
Many existing adult smokers may be experimenting with a wider range of nicotine products across segments, but Cunningham reckons value is still the key consideration when smokers make their purchasing decisions.
“Shopper demand for value continues to dominate buying habits in tobacco overall. This is a trend we expect to continue and grow in 2021 and beyond,” he said.
Demand for value is already high, but the economic fallout from the pandemic should see more consumers switch to value options, according to Cunningham.
“As the true economic impact of the pandemic becomes a reality for many, we may see shoppers down-trade from premium brands to more value focused offerings. To help retailers cater for these shoppers, we’ve been busy developing a range of products across both the RYO and FMC segments that offer the exceptional value shoppers are looking for, but with the premium features they’ve become accustomed to,” he said.
RYO in particular appears to be the chief beneficiary of increasing demand for value, with Cunningham highlighting Imperial Tobacco figures which suggest the segment now accounts for 45% of all tobaco sales, with recent data showing volume sales growing by 30%.
That growth should also be good news for tobacco accessories sales in the convenience channel, according to Cunningham
“In order to tap into this trend and take advantage of the incremental sales on offer, retailers should make sure they’re fully stocked at all times of filters, papers, lighters and other flavour-related innovations like Rizla Flavour Cards and Rizla Polar Blast Crushball filters, to cater for the rising number of consumers buying into the RYO segment,” he said.