From the Associate editor
A Citi analyst says smoking will disappear by 2050, and maybe this is going to happen in the US, some parts of Europe, Australia, and some parts of Latin America. According to the analyst, cigarette use may fall to zero three decades from now in those regions if the drop in smoking rates seen in the past few decades continues. Notably, though, it seems that Asia will not follow that trend.
Nattira Medvedeva
Nattira Medvedeva, Associate Editor
But, just this February, the decline in smoking in the US actually leveled off for the first time in 20 years. Yes, it’s possible that this might not last and is just temporary but it might also be possible that this is the beginning of a resurgence for combustible tobacco products.
Either way, it makes sense that tobacco companies are diversifying product portfolios to remain competitive, investing in r&d for e-cigarettes, vaping and heat-not-burn products, and oral nicotine products in addition to traditional tobacco products. And, let’s not forget the ventures into the cannabis business, the latest being British American Tobacco (BAT) announcing on March 11 that it will buy an almost 20% stake in Canada-based cannabis producer, Organigram.
Aside from making business sense and not putting one’s eggs in one basket, this shows tobacco companies listen and respond to what consumers say, putting out products that cater to consumer needs and demands. After all, people will smoke something somehow, let’s not pretend that one day everyone is just not going to smoke. So, isn’t it better that whoever does decide to smoke can smoke products that meet set standards that will lessen harm as much as possible? Isn’t it better to provide consumers with products that are scientifically researched and developed rather than leaving them with so few options that they end up smoking something that has an even more dangerous effect on their health and well-being?
Even the Citi analyst said, “The current trends do not suggest a world without cigarettes.”
Taking a look at the nearer future, Grand View Research estimates that the global tobacco market, valued at US$932.11 billion as of 2020, will grow at a compound annual growth rate of 1.8% through 2028, reaching US$1.07 trillion. Fidelity reported that as of this March, stocks in the tobacco sector gained 9.54% year-to-date, well ahead of the 3.8% gain by the S&P 500 versus a 3.48% decline by the overall consumer staple sector. In that same period, Philip Morris International stocks climbed 4.8%, and Altria jumped 17.6%.
After all is said and done, it looks like tobacco isn’t going away anytime soon.