It’s a value world in tobacco

    Photo: iStock

    Heated tobacco may be the future, but traditional cigs are standing up well in value form, and cigarillos are having a bit of a day in the sun

    At the time of writing there are several developing situations that are destined to affect both the tobacco and vape categories in the near future.

    The first is the proposed generational smoking ban. While many support the ending of smoking in the UK – including the tobacco companies themselves, who are reorientating their businesses towards non-combustible products and vapour – people might not realise that the absolute nature of the ban is extreme and could be compared, for illustrative purposes, to decreeing women should be banned from driving. This is because a generational smoking ban is a restriction a citizen cannot graduate from, unlike underage drinking, for example. If the ban becomes law, a person will forever be underage despite there being almost no difference between them and a person free from restriction (they might simply have been born a day or two too late).

    The consequences of this law have been much debated and considered – although not much by politicians – and from a retailers’ point of view, the restriction on trade is probably outweighed by the stimulus to violent crime. Anybody who is willing to look without prejudice at the situation can reliably predict that, aside from the further development of a vast black market, it is the in-store abuse provoked by a refusal to serve which scares storeowners the most.

    In short, the proposed generational tobacco ban seems impractical, unenforceable, and potentially disastrous. However, it is an ideological hobby horse that may well vanish along with its political sponsors, as was the case in New Zealand.

    It’s a value world in tobacco

    Simultaneously, the Tobacco and Vapes Bill Committee has been sitting in parliament, hearing evidence concerning even more bans, particularly restrictions on the vape – and heated tobacco – sector that could rule illegal almost all flavours, enforce plain packaging and ban advertising, and relegate vape and HT products from the shelves to a plain cupboard.

    The fact that the committee refused to hear evidence from people within the vape industry, such as John Dunne of UKVIA, suggests that the recommendations were agreed before the hearings started and that bad news for the industry is in store.

    As vapes and heated tobacco are one of the main avenues along which smoking reduction can be pursued, their official demonising by government and lobbyists is deeply unfortunate.

    The third leg of this rickety legislative stool is that smoking rates in the UK have stalled and more people, mostly the young, are taking up smoking again.

    A Cancer Research UK-funded study based on figures between 2017 and 2022 found that before Covid-19, smoking prevalence was falling by a rate of around 5.2 per cent a year.

    Since April 2020 (right on the nose for the first lockdown), this rate of decline almost stopped and has settled at around a mere 0.3 per cent, which does not even account for those smokers who “aged out”, suggesting a significant net increase in smoking from the younger end of the UK demographic.

    Why this should be is unclear, although it could be because people working at home under lockdown were not under office restrictions and that while not many more took up the habit, those who wanted to stop no longer felt pressure / encouragement to do so – and this situation has not changed despite a limited return to the office (although that does not explain the increase in numbers).

    Another reason might be the recent demonization of vaping – not only the disposables panic, but also the constant drip of slanted propaganda about the harm vaping can do, especially regarding how little is known about long-term harm. This is despite clear evidence endorsed by Public Health England that not setting fire to tobacco reduces harmful chemicals by over 90 per cent. Even ASH (Action on Smoking and Health), which sensibly supported vaping as a safer alternative to smoking, appears recently to have changed its stance now that more extreme bans seem possible.

    Nevertheless, until things change, tobacco is a legal substance legally sold for the pleasure of its users by c-stores across the nation, and from a retailer’s point of view, it is good news that a category that is an important part of a store’s revenue is doing well and acting responsibly with an eye to future prosperity despite what hostile politicians and lobbyists might plot.

    Seeking cigs

    Gemma Bateson, Sales Director at JTI UK, provides some key statistics for understanding the current state of the tobacco category. She says that with the value of tobacco in the UK totalling £13.8 billion in the last year, with the value in the independent and symbol channel accounting for £5.5 billion of that (nearly half!), the market remains a strong and profitable category for retailers. “JTI is the number one tobacco manufacturer in the UK, and we hold an impressive combined market share of 43.9 per cent,” she adds.

    The point is that price (and hence value) is more than ever crafting the profile for sales of FMC (or RMC if you prefer).  Of the total tobacco market, those factory- or ready-made cigarettes accounted for £9.6 billion, still dominating the sector, although RYO is catching up.

    “Looking at the sub-categories, Factory Made Cigarettes (FMC) currently hold the lion’s share of the market, worth 70 per cent of tobacco sales, with Roll Your Own (RYO) accounting for 30 per cent,” says Imperial Brands’ Consumer Marketing Director, Yawer Rasool.

    But within cigarettes, value brands are the way forward, with Value FMC having a market share of 21 per cent.

    “As the cost-of-living crisis continues to impact consumer spending, we’re seeing shopper demand for value rise across the entire tobacco category,” says Rasool. “As a result, products in the lowest pricing tiers now account for the majority of all tobacco sales. In fact, the value tier, combined with the economy sector, now make up a substantial 69 per cent of all FMC sales and 54 per cent of all RYO sales.”

    To capitalise on the significant sales opportunities presented by the tobacco category, Rasool believes it’s crucial that retailers are stocking a wide range of products that cater for this value trend, especially those within the value and economy priced tiers. While having the right product range is key, it’s also important that both retailers and their staff are equipped with in-depth knowledge of the tobacco category to deliver a great customer experience for any shoppers seeking advice. 

    It’s a value world in tobacco

    Bateson points out that B&H Blue is the UK’s No.1 cigarette brand, and that in the last year, Sovereign Blue achieved £458.3 million in UK retail sales. Last year JTI repositioned Sovereign Blue to a competitive RRP in line with its other Ultra-Value options, such as Mayfair Silver.  

    “As existing adult smokers continue to look for more affordable options in the market, retailers should focus on stocking Ultra-Value tobacco brands now more than ever. From B&H Blue RYO to Mayfair Silver, we are dedicated to innovating in this sector to help retailers answer the current demand,”  she said, adding that, “With existing adult smokers increasingly influenced by price, we have continued to innovate our value product offering, launching new products to meet demand and help retailers to drive sales.”

    JTI UK’s Marketing Director Mark McGuinness points out that the manufacturer recently expanded its Ultra-Value RMC range with the launch of Mayfair Gold: “Joining our Ultra-Value offering across all channels last year, Mayfair Gold joined Mayfair Silver as one of our lowest-priced cigarette brands. The product offers the same premium-quality Virginia blend that is synonymous with the Mayfair brand and has sold 1.5 million packs since launch, achieving £16.9 million in sales.”

    JTI has now also increased its specs on Benson & Hedges Blue, available now. “Adding to the success of Benson & Hedges Blue, which is currently the fastest-growing cigarette brand in the UK over the last 12 months,” says McGuinness, “Benson & Hedges Blue King Size and Benson & Hedges Sky Blue King Size will now include Dual Pack Innovation. The new packs will offer the same product, at the same price with lasting freshness.”  

    With products in the lowest pricing tiers (economy and value) now worth 69 per cent of all FMC sales, it’s clear that sales in the category are very much driven by demand for value. Imperial Brands recently launched an update to the popular Embassy Signature New Crush and L&B Blue New Crush variants to enable retailers to cater to the ongoing demand for value tobacco.

    It’s a value world in tobacco

    “The newly updated variants, L&B Blue New Crush Fusion and Embassy Signature New Crush Fusion, provide adult smokers with the opportunity to enjoy an instant cooling sensation thanks to its new and exclusive ‘Fusion’ large bore filter,” says Rasool. “Nearly 20 per cent larger than a standard-size bore filter, the Fusion large bore 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, as well as 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 £13.00 and £12.75 respectively, provide the same tobacco blend as the New Crush range, making it ideal for adult smokers who are seeking a new smoking experience but at a value price.

    Still rolling along

    The culture of hand-rolling has progressed from being the students’ and miners’ preferred smoke in the old days to becoming ever more mainstream as prices have risen (and more people have discovered the quality and taste, not to mention value, of truly fresh tobacco).

    “As many consumers remain money-conscious, we’ve seen RYO product sales within the value price sector increase by an impressive eight per cent year-on-year, making it the fastest growing segment that accounts for almost a quarter (24 per cent) of all RYO sales,” says Imperial’s Rasool.

    With 5.5m kg of rolling tobacco now sold each year in the UK, the RYO sector promises significant sales for retailers. JTI is fully represented in the category, and Bateson stresses that “By stocking up on Value RYO products, such as JTI’s Sterling Rolling Tobacco, retailers can capitalise on this opportunity.”

    It’s a value world in tobacco

    Indeed, Sterling RYO is the UK’s leading Value RYO brand, and in Scotland, over the last 12 months, Kensitas Club RYO has generated £31.4 million in sales value. 

    McGuinness concurs that, “With such a quantity of RYO sold in the UK each year, the category offers a significant opportunity for retailers to maximise sales by stocking up on value RYO Essential Rolling Tobacco.

    “Currently the UK’s leading value RYO brand, we reformatted Sterling Essential Rolling in 2023. Featuring rolling papers, an enhanced blend and a convenient zip pouch, the new features offer an easy and accessible format for existing adult smokers, with everything they need in one pouch.”

    Data shows that 30g packs of rolling tobacco are now the most popular with this format now making up a significant 69 per cent of all RYO sales, according to Imperial’s Rasool, meaning value-focused customers are increasingly opting for budget-friendly RYO products that offer the lowest out-of-pocket spend.

    “To cater for this demand, it’s key that retailers stock the right RYO product offering and we would highly recommend offering a wide range of leading brands such as Embassy Signature, Riverstone and Players JPS,” Rasool explains. “Although 30g formats may be proving the most popular for shoppers, larger formats still account for 31 per cent of RYO sales so ensuring a range of 50g formats is available should also be a focus.”   

    While products in the value and economy price tiers make up over half of RYO sales, the premium price sector in fact holds the largest share of the RYO market at 36 per cent. “This really demonstrates that, despite the focus on value, there are still many adult smokers who remain brand loyal and are willing to pay a more premium price for a brand that they know and trust,” Rasool notes. “With this in mind, we’d recommend that retailers stock a range of leading premium RYO brands, including Golden Virginia.”  

    It’s a value world in tobacco

     With RYO sales comes the cherry on the cake: accessories. Tobacco firms often supply their own – Imperial Brands’ Rizla papers are universally known – while other companies such as market-leading Republic Technologies specialise in supplying the essential extras that net retailers more revenue and excellent margins.

    Its Sales and Marketing Director, Gavin Anderson says that retailers who offer tobacco accessories shoppers a broad range of products are benefiting most from the continued growth of the £376m market, which is currently growing at +10.2 per cent year on year.

    “Shoppers in this category have a range of different usage occasions and purchasing habits, so choice is absolutely key in maximising engagement and sales in tobacco accessories,” he says.

    “Those retailers who offer a varied selection of product formats, from king size papers to eco-friendly filters are seeing the highest levels of repeat purchase which is a key driver for incremental sales.”

    Backed by category-boosting NPD and sustained marketing support for all its leading brands, Republic Technologies currently accounts for an incredible 40 per cent of total marketplace sales.

    Anderson says that papers remain the highest value subcategory in tobacco accessories, worth over £115 million and growing YOY. “Republic Technologies’ eco-friendly OCB range continues to outperform other papers in both value and volume growth, maintaining its position as the UK’s fastest growing paper brand in the tracked market, at +40 per cent.”

    Tobacco accessories can also be used as a signpost for related products and Republic Technologies’ space efficient Perspex units are driving both awareness and demand. The units feature interchangeable inserts for multiple bestselling brands.

    “They enable retailers to create eye-catching off-gantry displays and not only do they draw attention to new products, generating interest and impulse purchase, they also create more opportunities to upsell, as retailers can site them close to other tobacco related products,” says Anderson.

    It’s a value world in tobacco

    Imperial’s Yawer Rasool reminds us that with 4.5 million RYO smokers in the UK, the tobacco accessories category provides a substantial sales opportunity for retailers. The rolling papers category has performed well over the last year, with recent figures showing that king size papers represent around 60 per cent of the sales value and within this, combi papers is the fastest growing segment.

    “Value savvy consumers are increasingly migrating from king size into combi formats due to the added value and convenience they offer. To help retailers tap into this trend, we recently extended our combi range to include a new Classic King Size Combi variant for our iconic Rizla brand,” he says.

    As shoppers continue to seek value in their everyday purchases, Anderson is also highlighting the benefit of stocking multipacks.

    “Multipacks offer better value for both retailers and consumers at a time when rising numbers of cost-conscious shoppers want to get an even better return from their sales across the tobacco accessories category,” he adds.

    Available to buy now at an MRRP of £1.30, Rasool notes that the new Rizla Classic King Size Combi includes 32 unbleached king size papers and tips with a more natural look and feel.

    “With volume sales of combi formats expected to exceed those of popular standard format king size papers thanks to the great convenience they offer, we’d highly recommend that retailers stock up on Rizla Classic King Size Combi to tap into this trend and grow their sales with an iconic and market leading paper brand,” he concludes

    Heating up sales

    Heated tobacco products are distinct among next gen post-smoking developments as they do still contain tobacco rather than vaping liquid. As such, they form an important bridge between smokers who like smoking and wish to continue to enjoy the traditional experience, but with much less risk – because nothing is set alight to release the usual carcinogens.

    Heated tobacco is the obvious way forward for tobacco companies as they attempt to steer away from traditional tobacco, and here in the UK, Philip Morris Limited (PML) is foremost in having decided to go next gen and give up old-style tobacco as fast as possible. PML estimates that 20.8 million adults around the world have already switched to IQOS and stopped smoking, and that smoke-free products accounted for approximately 37 per cent of PMI’s total full-year 2023 net revenues.

    In the UK, 73 per cent of adult smokers have tried vaping, but only 23 per cent have stuck with it, explains John Rennie, Director of Commercial Operations at PML. He says that recognizing no single smoke-free product can cater to every smoker’s preference, means a multi-category approach becomes indispensable for those investing in their smoke-free portfolio.

    In particular, he stresses Philip Morris’s advice to retailers on their heated tobacco and tobacco-alternatives with regards to the impending ban on disposables – which is a wonderful opportunity to educate not only smokers but vapers about the advantages and attractions of heated tobacco, and PML’s IQOS system.

    It’s a value world in tobacco

    “Retailers must grasp the significance of this pivotal moment and adjust their strategies accordingly. By incorporating innovative products like IQOS ILUMA and TEREA tobacco sticks into their offerings, they not only navigate these shifts, but also thrive in the emerging smoke-free era.

    With IQOS now outselling the Marlboro brand, Rennie declares that “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.”

    He points out that over several years, cigarette sales have fallen in the convenience trade and in the grocery multiples, demonstrating that more smokers are abandoning cigarettes, some switching to smoke-free alternatives.

    IQOS ILUMA boasts PML’s proprietary bladeless technology, offering adult smokers and adult nicotine users an affordable, all-in-one tobacco experience without any smoke or ash, and less smell than cigarettes for a seamless and cleaner experience. The range of TEREA tobacco sticks includes nine tastes, from classic or menthol tobacco to aromatic blends.

    “IQOS ILUMA complements gantries because it offers a real tobacco taste and satisfaction, with 95 per cent less harmful chemicals compared to cigarettes and enables savings of up to £3,000 a year. It is these attributes, coupled with evolving preferences among adult smokers and nicotine users, which have elevated IQOS beyond Marlboro,” Rennie says.

    JTI’s Ploom is also heating up sales as demand for this non-combustible tech takes off, explains Mark McGuinness.

    “We are continuing to see more customers looking for an alternative but familiar tobacco experience with devices that heat tobacco instead of burning it. The Heated Tobacco category was worth £120 million in the last year in traditional retail, with a growth of 8.9 per cent year-on-year. With the category expected to be worth about a quarter of a billion pounds by 2025, there’s no doubt that the Heated Tobacco category provides a big opportunity for retailers, especially those with a competitive range and strong product knowledge.”

    It’s a value world in tobacco

    He says the Ploom brand has gone from strength to strength over the past few years, and device sales have doubled compared to last year, whilst EVO tobacco stick sales have tripled YOY – as with IQOS, these are remarkable levels of growth.

    “In September last year we launched Ploom X Advanced, an updated version of the Ploom X device originally released in October 2022. It includes two key improved features: an optimised HeatFlow system, with higher vapour volume during initial puffs offering an enhanced user experience, and faster charging, now taking less than 90 minutes to achieve a full charge,” he reveals.

    “Just five months after the launch, we were thrilled that Ploom X Advanced came out on top in the Product of the Year awards 2024, and with 86 per cent of shoppers more likely to buy a product that has won Product of the Year, stocking a winner can act as a sales booster for retailers.”

    Meanwhile, to support retailers stocking IQOS, PML has unveiled HEATWAVE OPEN, its Digital Trade Engagement Platform.

    Exclusively available to retailers enrolled in PML’s HEATWAVE OPEN programme, the platform serves as the sole channel for retailers to order IQOS ILUMA. Retailers can also procure TEREA – the tobacco sticks used exclusively with the IQOS ILUMA device – alongside PML’s broader range of smoke-free products.

    HEATWAVE OPEN provides a range of support services, educational tools, and reward schemes to help retailers get the most out of stocking PMI’s smoke-free portfolio. Enhancements include a gamification feature to drive engagement, offering instant rewards upon completion of various activities such as participating in the Watch & Win campaign and completing quizzes and tasks through the Level Up challenge.

    The platform also offers dynamic peer-to-peer guidance through the “IQOS ICONS” section, featuring brief, informative videos from standout IQOS sales achievers, which provide valuable insights into product information, sales strategies, and the advantages of stocking IQOS ILUMA and TEREA.

    Imperial Brands’ Ignite app ( is another useful tool for retailers. Offering up-to-date category and product news, as well as information on training opportunities, the app is designed to help retailers ensure their store runs to its fullest potential. It also features a range of helpful tools and advice, for example incentive articles, downloadable POS, product information and key tips on how to maximise profits.

    Small cigars, big sales

    Gleb Pugacev, the new Managing Director at Scandinavian Tobacco Group UK (STG UK), is a happy man, because cigars and cigarillos are enjoying something of a consumer renaissance.

    “Our latest data shows the total UK cigar category to be worth £309m in annual sales, which is a value increase of +9.2 per cent versus the same time last year. This positive performance is mainly down to cigarillo sales, which account for the largest of the four segments in the cigar category.”

    Cigarillos are the heroes of the surge. “Small, often flavoured, cigars – usually shorter and narrower than traditional cigars which typically take less time to smoke, and which can often appeal to adult smokers – are now worth £124.4m in annual sales and are responsible for just over half of total cigar volume sales. I’m pleased to say our Signature Action brand is now the fastest growing cigarillo, with sales up by over 40 per cent since the same time last year,” says Gleb.

    JTI’s Mark McGuinness also notes this key trend of cigarillos on the rise: “The cigarillo category continues to see notable growth in both the grocery and convenience channels, now worth approximately £9 million a month.”

    “Last year, we responded to this by broadening our cigarillo portfolio, introducing Sterling Dual Double Capsule Leaf Wrapped, which features a blend of peppermint and berry mint capsules, providing a dual flavour and enhanced taste.

    “Since launching in 2019, Sterling Dual Capsule Leaf Wrapped has continued to be popular and profitable for retailers and is the fastest-growing cigar brand in the UK and the top cigarillo brand, with a 91.8 per cent market share. As existing adult smokers continue to demand innovative flavours, we wanted to build on this by providing retailers with flavours that respond to current trends, with berry and menthol already popular flavours within other categories, such as Nicotine Pouches and Heated Tobacco products.

    “What’s more, the low price point and the fact we can offer a 10-pack, means retailers can cater to those shoppers looking for value-for-money tobacco options.”

    It’s a value world in tobacco

    Pugacev, who is Swedish, says that “It’s definitely cigarillos which are the current success story within cigars. The category barely existed four years ago, but sales are now worth over £120m and they account for more than half of all cigars sold in volume terms.”

    “From our portfolio, I would always recommend convenience retailers stock, as a minimum, Signature Blue, the UK’s best-selling ‘traditional’ cigar, Moments Blue (as their value proposition), our Henri Wintermans Half Corona, which is easily the UK’s best-selling medium / large cigar, and Signature Action, currently the UK’s fastest growing cigarillo.”

    Gleb believes that the key thing cigars and cigarillos offer retailers that other forms of tobacco don’t is really great profit margins, on average three times higher than cigarettes, “So for example, our Moments Blue brand offers up to 18 per cent margin when sold at its RRP, and there’s not many products in the tobacco category that can match that. However, with cigars, it’s more important to stock the right range rather than a wide range, so we advise retailers to consider the top two or three brands in the four main cigar segments, as the top ten sellers account for over 90 per cent of total sales.”

    It’s worth reminding convenience retailers that as cigars are exempt from the plain packaging legislation, he adds: “We recommend to stock them on the middle shelf of the gantry where they are visible, and more likely to be purchased by adult smokers who can see them.”

    In addition to the visibility advantage, cigars remain a (luckily low-price) luxury item, perfect for a self-treat, and no longer just at Christmas.

    “Whilst value can of course be a motivating driver of purchase in the cigar category, many adult smokers often like to take the opportunity to ‘trade-up’ to more premium or larger format cigars. One such cigar is our Henri Wintermans Half Corona brand, which is by the far the UK’s best-selling medium / large cigar and is often given as gift on special occasions like birthdays, Father’s Day, or of course Christmas.”

    As always, Gleb advises, it is important to ensure that you and your staff are well trained to talk to your regular adult smoking customers about the cigar category and let them know that you are stocking larger cigars, “in order to fully exploit the gifting opportunity”.

    At the beginning of 2024 STG announced a contemporary redesign for its Signature cigar range. The new simple but smart design appears on packs of Signature Blue, Signature Original and Signature Red Filter. Last year Signature celebrated its 60th anniversary with the launch of some limited-edition packs and the permanent return of the iconic tins for packs of 20’s. “Whilst the packs have changed, the cigars inside certainly haven’t, and will continue to offer a smooth taste and smoking experience with unquestionably high quality,” Gleb assures.


    JTI UK has announced the launch of a new and improved independent retailer platform, JTI 360, replacing JTI Advance.

    The new platform, developed with the help of real retailers, offers updated features and functions including a news feed which keeps retailers abreast of the latest trends and developments. The site also promises the latest pricelists at the click of a button, as well as a brand new “360 Arcade” enabling retailers to earn “points” which can be redeemed for prizes.

    To celebrate its launch, JTI is giving retailers the chance to win one of 360 incredible prizes, including three top prizes of holiday vouchers worth £3500 (includes £500 spending money). With a total of £35,000 in prizes up for grabs, retailers could also walk away with one of two £1,000 Currys vouchers or one of 200 £50 Amazon vouchers.

    Designed specifically for the independent trade, retailers can earn points for their continued engagement with the site, as well as by taking part in games and regular competitions. These points will be redeemable against a variety of prizes including vouchers, tech products, experiences, or entries into additional competitions for larger rewards.

    “We’ve worked closely with retailers to understand how we can develop and enhance our digital offering. After a series of focus groups and one-on-one conversations with our retail partners, we have been able to evolve JTI Advance and deliver a fantastic new JTI 360 website, designed specifically for the independent trade,” said McGuinness.


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