Continued regulatory pressures, on-going cigarette declines and changing consumer dynamics has put tobacco at a nexus point, Boris Oglesby, executive vice president and practice leader of alcoholic beverages and tobacco at Chicago market research firm Circana, said in an education session Sept. 11 at CSP’s Tobacco Plus Forum in Schaumburg, Illinois.
“Everybody wants to move consumers to a more reduced harm product and reduce combustibles, which are cigarettes and cigars, usage,” Oglesby said.
With increased focus, Oglesby said the convenience channel can support the tobacco industry’s desire to provide reduced harm products and moderate category performance.
According to Circana data from the convenience channel for the 52-week period ending Aug. 11, Oglesby said cigarettes represent about 72% of the total category of dollar sales, down almost 4%. Smokeless tobacco represents growth of 14.3% capturing 13.7% of the total category of dollar sales. E-cigarette growth also fell 5.2% with 8.4% of dollar sales.
Signaling out one segment, Oglesby called modern oral tobacco the “industry darling.”
As more consumers shift to modern oral tobacco, for the 52 weeks ending Aug. 11, the segment captured 4.9% of dollar share of tobacco across channels, he said.
Turning to vape sales in convenience stores, which were down 8.1% for c-store chains and 3.8% down for independent c-stores, Oglesby believes there is more to the story. “We have a hypothesis that consumers are leaving c-stores and going to vape stores, and we can’t track that,” he said.
When it comes to which tobacco products are gaining from cigarettes, Oglesby lists spitless, vape and cigars as the top three. “Spitless is the greatest beneficiary of cigarette buyer switching,” he said.
If access to their preferred product is limited, many consumers will make a switch, according to a Circana consumer survey conducted May through June of 2024. Oglesby said that 28.9% of menthol cigarette consumers said they would buy non-menthol cigarettes if they could no longer purchase menthol.
Almost half (48.9%) said they would be willing to drive up to 50 miles to get cigarettes or other tobacco products if they weren’t able to get the in the way they typically do.
“Twenty percent of flavored tobacco consumers said they would buy non-flavored vaping products if they could no longer purchase flavored tobacco,” Oglesby said.
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