There has been a rise in affordable tobacco options as high inflation continues to influence consumer choices, according to the new 2024 Tobacco Landscape report from Chicago-based Circana.
The report said that while the U.S. economy is demonstrating resilience, persistently high inflation continues to weigh on consumers, especially the 21-24 adult consumers and low-income households.
“High prices across consumer product goods signal an opportunity for retailers to leverage frequent shopper platforms to drive focused promotions to adult tobacco consumers,” Circana said.
The report also noted that 49% of consumers are “extremely concerned” about the high prices across consumer product goods. This stat comes from a Circana consumer survey conducted in January 2024.
“Customers continued to opt for lower priced products in c-stores in second-quarter 2024,” said Circana.
The report found that while these consumers over-index on cigar purchases, there have been strong sales in new, more affordable cigarette brands.
The report points out several industry opportunities when it comes to promotions and more affordable options.
“Knowing what else is in tobacco buyers’ baskets can unlock opportunities to cross-merchandise, including carbonated beverages, energy drinks, beer and chocolate candy,” the report said.
Lower-priced products highlight a need for retailers and manufacturers to determine the most effective promotional options for managing trade-downs, Circana said.
The report finds that just more than half of tobacco buyers are polyusers, which are cigarette consumers who also consume other nicotine products.
“Opportunities exist to promote different products for different occasions and to add variety to consumption,” Circana said.
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