2024年烟草市场全渠道和消费者视角分析报告（英文版）-Circana

CIRCANAINSPIRE

2024Tobacco

Landscape

AnOmnichannelandConsumerView

November2024

Copyright2024Circana,LLC(“Circana”).Allrightsreserved.Circana,theCircanalogo,andthenamesofCircanaproductsandservicesaretrademarksofCircana.Allothertrademarksarethepropertyoftheirrespectiveowners.

ExecutiveSummary

Thetobaccocategory,includingcigarettes,cigars,smokelesstobaccoandelectronicsmokingdevices,

has$84billioninmultioutletandconveniencechannelssales,withdeclinesacrosscigarettesandelectronicsmokingdevices,butgrowthinsmokelesstobacco.Thisreportexaminesshifting

consumerbehaviorandhowtheindustryisresponding.

TRENDS

•WhiletheU.S.economyisdemonstratingresilience,persistentlyhighinflationcontinuestoweighonconsumers,especiallythe21-24adultconsumersandlow-incomehouseholds.Whiletheseconsumersover-indexoncigarpurchases,therehavebeenstrongsalesinnew,moreaffordablecigarettebrands.

•Tobaccoisoneofthemostheavilyregulatedindustries,withtheFoodandDrugAdministrationoverseeingthemanufacturing,distributionand

marketingoftobaccoproductsintheU.S.Everyglobaltobaccocompanyhasastatedgoalofdevelopingandsellingreduced-harmnicotineproducts.

•Theconveniencechannelisthedominanttobaccochannel;otherchannelsincludesupermarkets,liquorstores,newsstandsandpharmacies.Thetobaccoindustrywouldalsoliketotracksalesofvapeproductsfromvapestores.

•C-storesoutperformedothermultioutletretailersinsalesofcigarettes,butunderperformedin“othertobacco,”whichincludesspitlessandchewingtobacco,andpapers.Cigarsalesshowgrowth(2.3%YOY)acrosschannels,but“modernoral,”orspitlesstobacco,nowcommandsnearly5%oftotaltobaccosales,andithasexperiencedunitincreasesof50%YOY.

•AmongnewproductstrackedthroughMULO+C,affordablecigarettestopthelistindollarsales,butelectronicsmokingdevicesaretopsinthenumberofnewofferings.

OPPORTUNITIES

•Inflationarypressurespersist,andconsumersarelookingforpromotionsandmoreaffordableoptions.Knowingwhatelseisintobaccobuyers'basketscanunlockopportunitiestocross-merchandise,includingcarbonatedbeverages,energydrinks,beerandchocolatecandy.

•Theconveniencechannelreflectsthelargestvapeproductsalesgains;non-trackedindependenttobaccoandvapestoreslikelycommandthelargestshareofvapesales.

•Justmorethanhalfoftobaccobuyersarepoly-users.Opportunitiesexisttopromotedifferentproductsfordifferentoccasionsandtoaddvarietytoconsumption.

•Aligningwithtobaccocompanygoalsofdevelopingreduced-harmnicotineproducts,innovationshouldhighlightreductionsinharmfulchemicalsorpromotepositiveattributesofflavororaroma.

Circana,LLC

Forpublicuse2

PersistentlyhighinflationweighsheavilyonU.S.consumers,especiallyadultsages21-24andlower-incomehouseholds

Highpricesacrossconsumerproductgoodssignalanopportunityforretailerstoleverage

frequentshopperplatformstodrivefocusedpromotionstoadulttobaccoconsumers.

BasedonHHIncomeLevelExtremelyConcerned

BasedonGenerationExtremelyConcerned

LowerIncome

61%

MiddleIncome

UpperIncome

54%

36%

N-2,324

49%

7%

43%

Totalrespondents:2,324

ExtremelyConcernedSomewhatConcerned

NotatAllConcerned

TheTotalU.S.

GenZ/YoungerMillennial

OlderMillennial

GenX

59%

53%

51%

OlderBoomers

RetireesandSeniors

YoungerBoomers

46%

45%

40%

Source:CircanaSurveySolutions,January2024,totalU.S.primarygroceryshoppers.

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Circana,LLC|Forpublicuse

Tobaccoappearstobeatanexuspoint

Continuedregulatorypressures,ongoingcigarettedeclines,andchangingconsumerdynamicshavetheindustryrethinkingitsstrategies

RegulatoryEnvironment

Tobaccoisoneofthemostheavilyregulated industriesintheworld.TheFamilySmokingPreventionandTobaccoControlActregulatestobaccoproducts,includingcigarettes,cigars ande-cigarettes.TheFDAregulatesthemanufacturing,distributionandmarketingoftheseproducts.

ConsumerTrends

In2020,22.3%oftheglobalpopulationused tobacco,encompassing36.7%ofallmen,and7.8%oftheworld'swomen.Therevenuesizeof theglobaltobaccoproductsmarketwas$912billionasof2022,anditisprojectedtogrowata compoundannualrate(CAGR)of3.75%from2023to2028.

ChannelCoverage

Tobaccoretailersincludeconveniencestores,supermarkets,liquorstores,newsstands

independentshopsandpharmacies.

Thetobaccoindustryhasexpressedstronginterestintrackingsalesofe-vaporproductsinvapestores.

ReducedHarmFocus

Theglobalnicotinereplacementtherapymarketwasvaluedat$2.7billionin2021,anditis

projectedtoreach$5.9billionby2031,growingataCAGRof8.3%.Everyglobaltobacco

companyhasastatedgoalofdevelopingandsellingreduced-harmnicotineproducts.

Source:TheWorldHealthOrganization's(WHO)FrameworkConventiononTobaccoControl(FCTC).Statista.

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Circana,LLC|Forpublicuse

Diffvs.MULO+

%vs.YA

Convenience,thedominanttobaccochannel,showsgainsinthenumbersofstores,dollarsandunitspertrip,butfewertripsperbuyer

C-storechannelperformancerelativetocompetitionforcriticaldriversinQ22024

CPGTRIPS

DollarSales

-1.2%

-3.2%

UnitSales

-4.3%

-4.2%

NumberofStores

+1.1%

+1.3%

Diffvs.QSR

%vs.YA

..

FOODSERVICE

DollarSales

+2.0%

+0.0%

Traffic

-3.1%

-1.1%

AverageCheck

+50%

+00%

Circana

Scorecard

Convenience

%vs.YADiffvs.Omnichannel

DollarsperTrip

+2.8%

+2.8%

UnitsperTrip

-0.9%

+3.1%

TripsperBuyer

-4.1%

-5.2%

FUEL

%vs.YA

%vs.Q1

-1.6%

+1.5%

AverageMonthlyFuelVolumeperBuyer(Gallons)

Tolearnmoreabouttheconveniencechannel,readourU.S.

C-StoreLandscapereport

.

Source:CircanaU.S.C-StoreLandscapeQ22024.Differencevs.=YOY%Chg.Conv-YOY%Chg.Competition.

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Circana,LLC|Forpublicuse

C-storesunitsper

decreasedtripsperbuyerand

tripyearoveryearinQ22024

ChannelPerformance|Q2

2024%Changevs.YA

UnitsperTrip

DollarsperTrip

TripsperBuyer

Unitspertrip

MASSX

decreasedYOY

CLUB

forallchannels

inQ2

DOLLAR

DRUG

FOOD

Convenienceanddrug

channelssawthemost

significantdecreasesin

tripsperbuyerYOY

CONVENIENCE

OMNICHANNEL

-12.0%

-10.0%

-8.0%-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%8.0%

Source:Circana,ConsumerReceiptPanel,dataNBDadjusted,Rolling13WEJune16,

2024,totalstoreexcludingfresh.

Circana,LLC|Forpublicuse6

YOYpriceperunitgrowthremainedconsistentinconvenience,andoutpacedMULO+inQ2

Averagepriceperunitacrossthestore%changevs.YA

U.S.MULO+

U.S.Convenience

InQ2,averagePPUincreased

from$4.08to$4.22

YOYinc-stores,whileMULO+

increasedfrom$4.98to$5.08.

8.5%

6.1%

5.2%

5.4%

3.3%3.2%3.2%3.2%

2.0%

1.7%

Q22023Q32023Q42023Q12024Q22024

Source:Circana,POS,13WEJune30,2024..

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Circana,LLC|Forpublicuse

C-storesoutperformedMULO+incigarettes,butunderperformedinothertopcategoriesinQ2

CategoryPerformance|Q22024DollarSales%Changevs.YATotalU.S.ConvenienceTotalU.S.Multi-outlet+

Cigarettes

PackagedBeverages(NA)Beer

OtherTobacco

SaltySnacksCandy

SweetSnacks OtherDairy&Deli AlternativeSnacksHealthandBeautyCare

-8%-6%-4%-2%0%2%4%6%8%

*TopcategoriesbasedonU.S.conveniencesales$inQ22024;Source:Circana,POS,13WEJune30,2024.

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Circana,LLC|Forpublicuse

Customerscontinuedtooptforlower-pricedproductsinc-storesinQ22024

Lower-pricedproductshighlightaneedforretailersandmanufacturersto

determinethemosteffectivepromotionaloptionsformanagingtrade-downs.

Customersaretradingdowntolower-pricedproducts(mix)inmanyofthetopsalescategories,includingcigarettesandothertobaccoproducts.

10%

8%

6%

4%

2%

0%

-2%

-4%

Inflation

Whatpricestheretailersets

Assortment

Whattheretailermakesavailable

Mix

Whatthecustomerpurchases

Q22022

Q32022

Q42022

Q12023

Q22023

Q42023

Q12024

Q22024

Q32023

InflationAssortmentMix

Overall

Cigarettes OtherTobaccoPackagedBev(NA)

BeerCandy

SaltySnacksHealth&Beauty

-15%-10%-5%0%5%10%15%20%

CircanaInflationMonitorSource:Circana,U.S.conveniencePOS,13WEJune30,2024.

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Circana,LLC|Forpublicuse

Cigarettesdominatethetobaccolandscape,butothertobaccoproductsaregaining

TotalU.S.Convenience|Aug2024

Shareof$SalesGrowthvs.YA

Cigarettes71.7%(3.6%)

SmokelessTobacco13.7%+14.3%

ElectronicSmokingDevices8.4%(5.2%)

ShareofDollarSales

Source:CircanaPOS52weeksendingAugust11,2024.

Forpublicuse10

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Circana,LLC

Circana,LLC|Forpublicuse

Tobaccosalesareover$84BinMULO+c-storechannel

Whilesalesaredeclining,c-storeoutperformsotherchannels

TotalTobacco|DollarSales%Changevs.YA

wTotalU.S.-MultiOutlet+wTotalU.S.-FoodwTotalU.S.-Convenience

3.5%

-0.7%

-1.3%

-0.8%-0.9%

-4.5%

-6.0%

-6.1%-5.6%-6.0%-5.7%

-17.2%

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

Channelstruggleshighlighttheneedforretailerstobemindfulaboutcustomerexperience.

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse11

Tobaccoperformanceinindependentc-storesisoutpacingchainstores

Chainvs.IndependentC-Store%Change

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

3.8%

3.5%

-0.1%

-0.4%

0.3%

-1.1%

-1.5%-1.5%

ChainConvenienceDollarSales%ChgvsYAIndependentConvenienceDollarSales%ChgvsYA

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse12

Cigarettesalescontinuetodeclineacross

channels,withconvenienceexperiencingthelowestrateofYOYloss

Cigarettes|DollarSales%Changevs.YA

TotalU.S.-MultiOutlet+TotalU.S.-FoodTotalU.S.-Convenience

1.2%

-1.2%

-3.1%-3.0%-3.1%

-6.9%-6.5%-6.4%-6.8%-7.2%-5.8%

-16.9%

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse13

Cigarsalesshowgrowthacross

channels,moderatingat2.3%YOY

Cigar|DollarSales%Changevs.YA

TotalU.S.-MultiOutlet+TotalU.S.-FoodTotalU.S.-Convenience

6.5%

4.5%

1.9%

2.4%2.3%

0.7%

0.2%

-0.2%

-2.0%-2.7%-2.4%

-14.8%

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse14

Traditionalsmokelesstobaccosalesshowdecreasesinallchannels

TraditionalSmokeless|DollarSales%Changevs.YA

TotalU.S.-MultiOutlet+TotalU.S.-FoodTotalU.S.-Convenience

1.7%

-1.1%

-3.2%

-2.4%-3.2%-2.6%

-5.0%

-7.4%

-6.8%-6.7%

-8.8%

-22.7%

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse15

…asconsumersshifttomodernoraltobacco

Retailersshouldreviewcurrentassortmenttoensurethatthey'remeetingconsumerpreferences.

ModernOral|DollarSales%Changevs.YA

110.4%

TotalU.S.-MultiOutlet+TotalU.S.-FoodTotalU.S.-Convenience

93.1%

77.4%

65.8%

64.1%

49.7%

52.7%

46.9%

40.5%38.8%

40.5%

33.7%

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

Modernoralreferstodisposable,smokeless,spitlessnicotinepouchesplacedbetweenthegumandlip.

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,.2023.

Circana,LLC|Forpublicuse16

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Circana,LLC|Forpublicuse

Modernoraltobaccoistheindustrydarling

Asconsumerpreferenceschange,retailerswillhavetomonitorshoppingbehaviorstostayaheadofcurrenttrends.

DollarSalesModernOralTobacco

$4106M

$2469M

$1753M

$1309M

$882M

52WE08-16-22WE08-15-22WE08-14-22WE08-13-22WE08-11-24

+50%

Unitchange

4.9%

DollarShareofTobacco

721B

UnitSales

2.0ppts

DollarShareChange

$20.9KDollarsPerStoreSelling

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse17

Vapesaleshavemadeadramatic

comebackinthefoodchannelsince2021

However,foodrepresentsonlyasmall%oftotalvapeindustrysales

Vape|DollarSales%Changevs.YA

wTotalU.S.-MultiOutlet+wTotalU.S.-FoodwTotalU.S.-Convenience

190.1%

53.2%

34.2%19.7%

36.7%

23.8%15.6%

5.8%

5.0%

-5.3%

-26.6%

-68.9%

52WE08-15-202152WE08-14-202252WE08-13-202352WE08-11-2024

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse18

Webelievethere’s

moretothevapestory

Vape$SalesChange2024

-3.8%

IndependentC-Stores

-8.1%

Chain

C-Stores

Hypothesis

Consumertrafficappearstobemigratingtonon-tracked/measuredchannels:

Independenttobaccoandvapestores

Source:TotalU.S.MULO+&ConvenienceCircanaPOSCY2024,August11,2023.

Circana,LLC|Forpublicuse19

Severaltopnewtobaccoproductsintheconveniencechannelwerevapeproducts

02GeekBarPulse

GeekBar

03CamelClassic

BritishAmericanTobacco

04ElfBar–LostMaryVapeOnly

05Cougar

BritishAmericanTobacco

01MontegoBrookeGroup

CigaretteElectronicSmokingDevicesCigaretteElectronicSmokingDevicesSmokelessTobacco

06TysonHeavyWeight07PallMallRed-Blue-Green08GameLeaf09Grizzly10RazVapingProducts

$413.9M$105.0M$94.9M$74.2M$69.3M

JBrandsBritishAmericanTobaccoSMCIHoldingBritishAmericanTobaccoGuangdongQisitech

ElectronicSmokingDevices

$41.9M

Cigarette

$23.4M

Cigar

$20.5M

SmokelessTobaccoElectronicSmokingDevices

$20.4M$17.0M

Source:CircanaTotalU.S.–Conv–52WeeksendedDecember2023

Circana,LLC|Forpublicuse20

Tobaccolandscapeimplicationsandopportunities

Whatinnovationssatisfyconsumerdemandandstatelaws?

Monitortobaccouser’stotalbasketforpromotional

opportunities.

Inflationarypressures

Manyconsumerswilllookforalternativeproductsiftheirpreferredtobaccoproductsareunavailable.

H