Global Cigarette Market May Shrink by One-Third by 2027; Western Europe Disposable E-Cigarette Growt

The global cigarette market is expected to decline by one-third by 2027, while the market for new reduced-risk products is showing growth.

Breaking news: According to a recent report by The Times of London, the global cigarette market could shrink by one-third by 2027. This trend is linked to increasingly stringent health regulations and smoking bans in various regions, as well as the sharp growth of reduced-risk products (RRP). Only the Asia-Pacific and Latin American markets are expected to see growth. 

According to Shane MacGuill, a representative of market research firm Euromonitor International, the tobacco market this year has shown a “dual market” pattern. Overall, growth in the global cigarette market has been weak, but the Asia-Pacific and Latin American regions are clearly showing bullish performance. 

Developed markets have experienced significant declines in cigarette sales. In Western Europe, cigarette sales fell by 4.4%, the largest drop in a decade. In North America, sales declined by 8.5%, the biggest drop on record. Alongside regulations of various kinds, a key factor behind falling cigarette sales is the emergence of new reduced-risk products such as e-cigarettes, heated tobacco, and nicotine pouches. 

In 2022, heated tobacco products were valued at $32 billion, making them the largest of all reduced-risk categories, nearly double the $19 billion e-cigarette category. In 2022, heated tobacco achieved sustained double-digit growth outside Western Europe, the Middle East, and Africa, after these markets had long remained secondary to its traditional strongholds in Asia-Pacific and Eastern Europe. 

In 2022, disposable e-cigarettes grew by 91%, with growth approaching 1000% in Western Europe, their key region. However, because disposable e-cigarettes are seen as appealing to younger consumers and raise environmental concerns due to lithium batteries, electronic components, and plastic casings being discarded after each use, disposable products are especially vulnerable from a regulatory risk perspective compared with existing vaping devices. 

New Zealand has already banned disposable e-cigarettes (the law requires e-cigarettes to have replaceable batteries), and similar restrictions are likely in other markets including Germany, France, and the UK. The EU’s forthcoming battery legislation could effectively ban disposable e-cigarettes in practice.