Middle East/Africa  Market and Product Trends

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By Patrick Meredith, Innovations Director, Essentra

Tobacco legislation and regulation continues to increase in complexity around the world, with further restrictions - such as indoor smoking bans, marketing, packaging, and tobacco content - being implemented. Legislation varies in severity from one country to the next.

Take tobacco packaging, for example; in China legislation requires warnings to cover 35% of the packaging, whereas this increases to 50% in the Philippines and Singapore, and 85% in India. Even stricter, in Australia plain tobacco packaging laws have been in place since 2012, stating that all tobacco packaging must be a uniform olive color and all brand names must be printed in small, non-distinctive lettering.

Reviewing wider tobacco legislation, in 2009 Barack Obama signed the Family Smoking Prevention and Tobacco Control Act, giving the US Food and Drug Administration (FDA) full authority to regulate the manufacturing, marketing, and sale of tobacco products in the US, while menthol cigarettes will be banned by May 2020 in the EU under the Tobacco Products Directive.

In the Middle East and Africa (MEA) legislation tends to focus on smoking in public places, advertising, packaging, and imported goods, rather than tobacco content, ingredients, and flavorings. According to 2017 Euromonitor data, overall the MEA region has seen a steady growth since 2011, with retail volume increasing from 439,956 million sticks in 2011 to 476,131 million in 2016; indeed, from 2015 to 2016 alone, the market as a whole grew by 4.5%.  Looking at specific countries, there was a significant 41.2% increase in retail volume sales in Iraq (growing from 18,622 million sticks in 2015 to 26,294 million in 2016). Meanwhile, other countries - such as Cameroon, Israel, South Africa, Tanzania, and Ghana - saw a decline from 2015 to 2016, with Ghana posting the largest decrease at 11.4% (from 785 million to 695 million sticks).

According to the latest Euromonitor data, the MEA market is still dominated by monoacetate filters, with a 92% share and volume growth of 2.8% in 2016. However, despite this strong presence, there are a number of higher growth segments including carbon filters, flavoured filters, capsule filters and slimmer filters. For example, carbon filters saw growth of 8% in 2016, highlighting their potential in the region, with a cooler and smoother taste experience leading to a different consumer experience. Within MEA, Iran is the largest market for carbon filters, with a volume of 18,316 million sticks in 2016 – a figure which has doubled since 2011.

Looking at trends in product size, we can also segment the market by regular, slim, and super slim. In the MEA region, although regular filters again make up the vast majority of the market, demand is quite steady with growth of around 1-2% every year since 2011. Slim and super slim filters, however, have both seen double-digit growth, with slim filters experiencing a 11.8% increase between 2015 and 2016 and super slims seeing a 14.2% rise. In Nigeria, there was a particularly dramatic increase in the slim filters segment; from 2015 to 2016 retail volume rose from 294.1 million to 713 million sticks, equating to a 142.4% increase according to Euromonitor data. This steep incline can be explained by the fact that the slim and super slim segments are still relatively new in this market, and prove an effective way for tobacco companies to differentiate their product. The largest market in MEA for slimmer filters is Iran, with 5,037 million slim and 6,239 million super slim cigarettes on sale in 2016.

This significant increase is not just seen in MEA however; super slim filters are in fact one of the fastest growing segments in the cigarette market globally. Slimmer cigarettes use less materials making them potentially more environmentally friendly and, when coupled with innovative packaging, can be positioned as more premium products, allowing tobacco companies to maintain revenues. 

To cater for this trend Essentra supplies its own range of slim, superslim, and even microslim filters, which have circumferences as small as 14.5mm. Similarly, in response to the high demand for slimmer filters, Essentra has expanded its ranges, ensuring that many of its previous innovations – such as tubes, recess and CPS – can also be offered in the smaller circumference variants. 

Essentra’s most recent innovation in this area is the super slim Corinthian filter – a patent-pending, multi-segment filter with a mouth end segment which has flutes formed in the cellulose acetate around its circumference.  This mouth end segment can be combined with a number of other technologies – carbon, flavor, or colored tow, for example – to create a highly differentiated and premium product.  

Finally, categorizing data by flavor types, the most popular of these – in line with global trends – is menthol which, from 2015-2016 saw an increase in retail volume of 5.1% in MEA, with Iran posting the highest growth at 16.9%.  It is therefore evident that, although the Middle Eastern and African markets show generally modest growth, there are certain segments that still present increased potential – particularly special filters, with manufacturers producing a wide range of products catering for every consumer taste. To this end Essentra Dubai is expanding its capability to produce carbon dual filters and is also currently working to introduce recess filters. It will also be attending the WT Middle East 2017 show, occurring 5-6 December in Dubai, to share this progress and explore future anticipated industry trends. In addition to showcasing its filter innovations, Essentra will also present its tobacco packaging and labelling offering, including its freshness and AquaSense™ labels. Essentra’s freshness labels allow consumers to simply reseal their cigarette packs, ensuring that the contents stays fresher for longer - and with speciality digital label printing technology, Essentra can additionally print eye-catching and brand-enhancing designs onto the labels, increasing space for information and differentiation. The AquaSense™ labels also help to enhance freshness, through controlling humidity and dryness, and storing and absorbing any liquids.

As a total solutions provider to the industry, Essentra is committed to investing in new products and research & development to meet the market requirements, such as stricter regulation, increased legislation, and changing consumer tastes. As outlined above, these vary greatly from region to region, but with its global footprint - including its manufacturing facility in Dubai - Essentra is optimally positioned to be able to provide both global and regional support to our partners.