CHICAGO — In a presentation during a CSP Tobacco Update webinar, RBC Capital’s Nik Modi projected that cigarette volume will decline by 5% in 2020, and Joe Teller, director of category management for Swedish Match North America, predicted sales volumes of other tobacco products (OTP) will grow 5.6% over the coming 52 weeks.
Here’s a look at expectations for four specific nicotine and tobacco segments …
After growing “gangbusters” for years, the cigar segment took a hit over the past 24 months or so, Teller said. “It was homogenized tobacco leaf (HTL) products that took the hit,” he said, leaving rolled-leaf and natural-leaf cigars to make up the difference. “Retail is still too heavy with HTL regular items,” he said, leaving him to predict an “upside to only 1.2% volume growth” in 2020.
The young nicotine pouch segment has grown by more than 500% over the past year or so, but off a very small base and with presence in only about half of the c-stores in the United States, according to Teller. As retailers begin to wrap their arms around the products, he loosely predicts 165% growth over the next 52 weeks. This is “still growing too fast to get a good next-year projection,” Teller said. “Dedicated nicotine pouch sections will help.”