Cigarette Dollar Sales Strong as Volumes Decline

By 
Angel Abcede, Senior Editor/Tobacco, CSP

Cigarette sales

NEW YORK -- While volume sales continued to decline, price increases stabilized the cigarette market in the past quarter, according to New York-based Nielsen’s quarterly all-channel data.

For a four-week period ending Nov. 4, cigarette sales increased 0.9% despite a 4.4% decline in volume. The declines were in part a response to California’s new $2-per-pack tax increase on cigarettes that went into effect earlier in the year, according to Bonnie Herzog, managing director for consumer equity research, Wells Fargo Securities LLC, New York. She projected total industry volumes for the year to decline 3.5%, well within the range of historic trends.

Here are other tobacco-category insights from the past quarter …

Marlboro pressures

Marlboro cigarettes

Altria Group Distribution Co., Richmond, Va., and its Marlboro brand showed a dollar-sales decline of 0.6% and volume decline of 6.1%, part of “strong exposure” to the California tobacco-tax increase, Herzog said. On the bright side for the marketer, pricing opportunities and new-product innovation slated for 2018 are hopeful signs, she said.

Newport growth

Newport cigarettes

London-based British American Tobacco and its newly acquired Reynolds American Inc., Winston-Salem, N.C., showed dollar-sales increases of 5.7% and a lower rate of volume decline (2.1%) than the industry as a whole (4.4%), Nielsen said. The company’s Newport and Natural American Spirit brands led the trend.

Upbeat news for smokeless

Smokeless tobacco

Dollar sales of smokeless tobacco grew 7%, reflecting continued consumer loyalty to the category and acceptance of the latest line extensions, Herzog said.

E-cigarette sales rise

Vuse

Led by Reynolds’ Vuse and San Francisco-based Pax Lab’s Juul products, the e-cigarette category saw a 28.4% increase in dollar sales and an 18.1% increase in volume, according to Nielsen data.

Cigars show solid increases

Cigar

Dollar sales of cigars remained solid with a 13.5% increase, Nielsen reported. Altria’s Middleton cigars led in sales with No. 2 being Darien, Conn.-based Swisher International.