E-Cigarette and Snus Sales Rise in Three Nordic Countries

In recent years, cigarette consumption has been steadily declining in Sweden, Norway, and Denmark, while sales of tobacco products such as e-cigarettes and snus have gradually increased.

According to the latest data from Euromonitor International, Sweden, Norway, and Denmark have become some of the countries with the lowest traditional cigarette consumption globally, and cigarette consumption continues to decline: the proportion of adult cigarette consumers in Sweden dropped from 13.4% of the total population in 2010 to 11.6% in 2015. During the same period, the proportion of adult cigarette consumers in Norway decreased from 19% to 13.2%. In contrast, Denmark's smoking rate has declined more slowly, with 20.4% of the adult population being cigarette consumers in 2015, down from 21.5% five years earlier.

Meanwhile, e-cigarette consumption has been on the rise. In Norway, the market share of e-cigarettes grew from just 1% in 2010 to 10.7% in 2015. In Sweden, 9% of adults had consumed e-cigarettes in 2015, compared to 5.5% five years prior. Danes are leading in e-cigarette consumption, with the proportion of e-cigarette users rising from 5.2% in 2010 to 20.8% in 2015.

Additionally, it is noteworthy that the sales of snus have also steadily increased in countries like Sweden.

Swedish Market

Sweden has consistently had a low smoking rate, partly due to the popularity of snus among Swedes. Snus is one of the earliest forms of smokeless tobacco products, introduced to Sweden by French nobility, and has been consumed in Sweden for about 200 years.

In 2015, the total sales revenue of all tobacco products in Sweden was $3.34 billion, with snus and moist snuff accounting for $1.14 billion. The consumption of snus has been growing at a rapid pace, while the sales volume and revenue growth of cigarettes in Sweden have been very slow.

In recent years, the global leader in snus manufacturing, Swedish Match, has sold more than 360 million cans of snus annually in the Swedish and Norwegian markets. In 2015, the company's snus accounted for 69.3% of the entire Swedish snus market, slightly down from 2014.

Swedish Match operates more than ten production facilities in six countries, with sales concentrated in Scandinavia and the United States. The company primarily deals in Swedish snus, moist snuff, cigars, chewing tobacco, and matches. It continues to divest from traditional cigarette businesses, believing that new oral tobacco products will replace cigarettes as the mainstream choice, and introduced the slogan "A World Without Cigarettes" in 2014. In 2014, the company's Swedish snus sales in Scandinavia reached 238 million cans, a 3% increase year-on-year, with a market share of about 70%; Swedish snus and moist snuff sales in the United States reached 133 million cans. Swedish Match's operating profit in 2015 was 3.69 billion Swedish Krona (approximately 2.87 billion RMB), with snus revenue accounting for 54%. The snus brands sold by the company in Scandinavia include General and Ettan.

Norwegian Market

Norway, with a population of over 5 million, is one of the smaller countries on the Scandinavian Peninsula. From 2010 to 2015, the sales revenue of all types of tobacco products in the country decreased from $2.1 billion to $2.07 billion. However, during the same period, the sales revenue of smokeless tobacco products, including snus and moist snuff, increased from $340 million to $596 million.

Snus is also quite popular in Norway. According to a report from Swedish Match, in the past three years, the consumption of snus alone in the Norwegian market has increased by over 20%; in 2015, the consumption of snus grew by about 7% compared to 2014. Other types of tobacco products have either stagnated or declined significantly. In 2015, the sales revenue of cigars and small cigars in the country dropped to $21.1 million. The sales revenue of combustible tobacco products decreased from $473 million in 2010 to $342 million in 2015.

The shift of Norwegian consumers towards snus has led to a decline in the sales of traditional combustible cigarettes in the country. The retail revenue of the Norwegian cigarette market fell from $1.26 billion in 2010 to $1.08 billion in 2015. During the same period, the consumption of cigarette products, including roll-your-own cigarettes, shrank from 3.14 billion sticks to 2.3 billion sticks.

British American Tobacco holds a 51.7% market share in Norway's tobacco market; followed by Philip Morris International with a 33.6% market share; Imperial Brands holds 11%; Japan Tobacco International has 2.4%; and Scandinavian Tobacco Group has 0.3%.

Experts predict that the smoking rate and sales revenue of traditional tobacco products in Norway will continue to decline. Under this trend, the sales of snus in the Norwegian market are expected to continue to grow.

Danish Market

Denmark appears somewhat out of place in the Scandinavian region. From 2010 to 2015, the smoking rate in Denmark remained around 20%, with cigarette consumption dropping from 7.7 billion sticks to 5.64 billion sticks. Including roll-your-own products, the country's cigarette consumption decreased from 8.1 billion sticks to 6 billion sticks over the past five years. In contrast, just before the new Tobacco Products Directive officially took effect, the consumption of cigars and small cigars in the country saw a slight increase. From 2010 to 2015, the consumption of cigars and small cigars in the Danish market nearly doubled, reaching 114 million sticks, with sales revenue also rising.

In recent years, the sales revenue of traditional tobacco products in Denmark has seen a slight decline—from $2.4 billion in 2010 to $2.12 billion in 2015. Experts analyze that this downward trend is likely to continue in the future.

Thanks to the acquisition of House of Prince (a large tobacco company in Denmark) in 2008, British American Tobacco's market share in Denmark had risen to 73.6% by 2015. Other multinational tobacco companies occupy the remaining market share in Denmark: Philip Morris International holds 17%, Japan Tobacco International has 7.5%, and Imperial Brands has 0.2%.

In contrast to the decline in cigarette sales and revenue, the Danish e-cigarette market has shown strong growth: sales revenue increased from $22.1 million in 2010 to $41.8 million in 2015. In comparison, the e-cigarette market sales revenue in Norway and Sweden in 2015 were $24.1 million and $3.7 million, respectively. Given Denmark's population—slightly larger than Norway's—this growth rate is quite remarkable. From a regulatory perspective: Denmark has insisted on classifying nicotine-containing e-cigarettes as medical products and requires manufacturers to obtain market sales licenses.

After the implementation of the new Tobacco Products Directive, some changes will occur, making it legal to sell nicotine-containing e-cigarettes and liquid nicotine in the country.

Compared to their Nordic neighbors, Danes have a strong preference for combustible tobacco and pipes. Although from 2010 to 2015, the market sales revenue of combustible tobacco products in Denmark decreased from $145 million to $127 million, this decline is not as significant compared to the combustible tobacco product market sales revenue in Sweden and Norway.

As the world's largest cigar manufacturer, Scandinavian Tobacco Group sells approximately 3 billion cigars and 5,000 tons of pipe tobacco annually. In 2015, the group's net income was 6.732 billion Danish Krona (approximately 6.732 billion RMB). In 2014, the group held a 73% market share of smoking tobacco products in Denmark, followed by Mac Baren Tobacco Company with a market share of 22%.