3 Predictions for the Tobacco Industry in 2016 and Beyond

By 
Melissa Vonder Haar, Freelance Writer

1. Altria Going Superpremium?

natural american spirits

Three trends in tobacco products and regluation stood out during the NATO Show in May as having the legs to disrupt the category in 2016 and beyond.

They begin with the largest tobacco-product manufacturer in the country: Altria. Given the continued double-digit growth of Reynolds’ Natural American Spirits brand, analyst Bonnie Herzog of Wells Fargo Securities said No. 1 player Altria is “open” to entering the superpremium space via acquisition or developing its own brand.

2. A Vape Ban?

vaping equipment

Mitch Zeller, head of the FDA's Center for Tobacco Products was quick to refute claims that the proposed deeming regulations could effectively ban e-vapor, pointing out that only Congress can ban products. Yet Briant of NATO said keeping the predicate product date in 2007 would cost manufacturers millions, if not hundreds of millions, in compliance—meaning only the largest manufacturers would survive.

The Era of ‘Big Marijuana’?

marijuana

With more states legalizing recreational marijuana, analyst Bonnie Herzog of Wells Fargo Securities is frequently asked if Big Tobacco will enter the space. While she described Altria and Reynolds as being “cautious” in comments about marijuana, she thinks it’s a good fit: “My belief is they will enter when and if marijuana is legalized federally. It makes sense.”