Within the tobacco market, which is currently worth £14bn (before tax) per year, there is almost a 50/50 market share split across Factory Made Cigarettes (FMC) and Roll Your Own (RYO) categories – at 53% and 47% respectively (Imperial Tobacco).

Overall, we’re seeing continued movement towards low priced propositions across the entire category as consumer demand for value continues to drive tobacco purchasing patterns.

As part of this shift, the lower price tiers now account for the majority of sales, with the sub-economy segment making up 63% share of FMC, and the economy segment accounting for 51% of RYO, with both value segments growing at 4% YOY (Imperial Tobacco).

“In order to effectively harness the sales opportunities this presents, retailers and wholesalers must be equipped with the right products and importantly, the right knowledge, to help their customers navigate the tobacco category,” comments Duncan Cunningham, UK Corporate Affairs Director at Imperial Tobacco & blu.

Looking at the RYO category in particular, we can see that the consumer drive for value remains a big factor, with the economy segment accounting for 51% of sales, and mid-price and premium products comprising 35% and 14% share respectively (Imperial Tobacco).

“Our new JPS Players Easy Rolling Tobacco is a great example of what wholesalers should be stocking to allow retailers to cater for these increasingly value savvy shoppers,” adds Cunningham. “JPS Players Easy Rolling Tobacco is an exciting new blend of fine cut tobacco that offers an easier rolling experience and benefits from the brand recognition of one of the UK’s best-selling cigarette brands.”

JPS Players Easy Rolling Tobacco features a more vibrant colour and lower levels of moisture, making the blend easier to handle and to roll. The range is available to buy in 30g and 50g and priced at £12.95 and £21.20, and each pouch includes a set of quality rolling papers.

The Riverstone range was recently repositioned to sit within the rising economy RYO segment alongside JPS Players, with its 30g and 50g pouches also priced at £12.95 and £21.20 and including both papers and filters for the ultimate in convenience.

The sale of illicit tobacco is a global industry. Between 2019-20, estimates show 9% cigarettes and 34% tobacco were non UK duty paid, meaning the Government lost £2.3bn in tobacco tax revenue (HMRC). As such, since 2000, £49bn in tax revenue has been lost as a result of non UK duty paid cigarettes or tobacco being sold in the UK (HMRC).

James Hall, Anti-Illicit Trade Manager, Imperial Tobacco UK, comments: “We firmly believe that illicit tobacco trade must not be tolerated. The sale of illicit tobacco is a global industry that harms honest retailers and damages communities.

Illicit tobacco sellers can have links to other organised crime activities and, at worst, fund illegal operations such as human trafficking and modern day slavery. However, to truly address the problem, we need everyone to be alert and take action by reporting any suspected illicit activity to the relevant authorities.”

Imperial Tobacco UK recently launched a new and improved anti-illicit trade website as part of its continued ‘Suspect it? Report it!’ trade campaign to tackle illegal sales of tobacco. The redeveloped website is a valuable resource for information about the illegal tobacco problem in the UK, with the site containing information about the latest developments in illicit tobacco via an updated news page and Twitter feed.

The aim is that this redeveloped site will help ITUK’s trade customers to remain vigilant and raise awareness of the scale of the problem at hand. As well as keeping trade customers informed, Imperial wants to encourage them to report any suspected sellers in their area to the company’s salesforce through ther dedicated SARA trade platform or call Imperial directly through the anti-illicit trade hotline on 0800 0495992. Richmond packs have been revamped with a new look featuring prominent trade outer branding to deliver a coherent design across the range.

The Richmond portfolio has also been adjusted to offer a simplified range, all positioned within the new value tier to deliver great value to hard working shoppers looking for a well-known brand at the lowest price. This will include the variants formerly known as Real Blue, which will now use the descriptors Richmond Original Superkings and Richmond Original Kingsize, as well as Richmond Bright Superkings and Richmond Green Filter Superkings, all of which will be available to buy in packs of 20 at an RRP of £9.75.

Ian Howell, Fiscal & Regulatory Affairs Manager at JTI UK, comments: “The illicit tobacco trade remains a serious problem for law-enforcement agencies, retailers and communities across the UK.” In fact, research conducted for JTI in 2020 found that, despite lockdown and travel restrictions, 30% of smokers were still able to purchase tobacco that was not subject to UK taxes (Kantar).

“Wholesalers play a vital role in combatting the illicit trade and our job at JTI is to ensure that they are knowledgeable and confident in communicating the dangers of the illicit tobacco trade to their customers and steering them away from directly or indirectly supporting organised criminal enterprises,” adds Howell. “Wholesalers can help combat illicit tobacco by engaging with our Don’t Be Complicit In Illicit campaign, helping to raise awareness of the dangers of the illicit trade with customers, and reporting any suspicious behaviour to the relevant law-enforcement agencies. Ultimately, by encouraging more people to report suspicious activity to the relevant authorities, wholesalers can help protect their local communities and prevent underage tobacco sales.”

JTI is committed to supporting wholesalers and providing them with the tools they need to become more knowledgeable when communicating the dangers of the illicit tobacco trade to their customers. The Don’t Be Complicit in Illicit campaign and dedicated microsite (www.jtiadvance/DontBeComplicit), which features a host of useful articles and advice, helps wholesalers join the fight against illicit tobacco in their area by providing them with more information on the scale of the issue.

Ross Hennessy, Sales Vice President at JTI UK, comments: “Price remains a key factor for existing adult smokers. Wholesalers should therefore stock up on value RYO products, such as Sterling RYO, the leading value RYO brand with £592.5 million in retail sales value over the last 12 months (IRI).”

Sterling 3-in-1 Rolling Tobacco offers existing adult smokers the fuss-free and convenient format they want, with tobacco, papers and filters in one handy pouch.

“Wholesalers should look to stock up on value brands to cater to this ongoing demand and offer Sterling 3-in-1 as an option to their customers,” says Hennessy.

Building on the success of Sterling 30g, JTI has announced a new 50g format, which offers the same RYO quality at a competitive RRP of just £21.20. The launch comes as JTI upholds low RRP’s throughout the Sterling Essential range, for both the 30g and 50g formats. The 30g variant currently offers an RRP of just £12.95.

JTI’s decision to release this new, larger format of Sterling Essential Rolling Tobacco reflects the increase in demand for value RYO, with the category growing 14.3% year on year (IRI), and generating sales of £3.9 billion a year (IRI). Sterling Rolling is the UK’s fastest growing RYO brand (IRI), showing that the demand for value tobacco continues.

Mirroring the 30g format, Sterling Essential Rolling Tobacco 50g is a less for less alternative, with no filters and papers providing existing adult smokers the freedom to purchase their preferred tobacco accessories. It also comes in a paper insert pouch packaging which contains less aluminium, and the blend generates less leaf waste compared to other RYO brands due to its unique whole leaf blend.

Sterling Dual Capsule Leaf Wrapped, the UK’s No.1 cigarillo brand, includes a mentholated Virginia blend tobacco and capsule filter that when crushed releases a peppermint flavour. It offers a good value and high-quality product, with an affordable RRP of of £5.25 for a pack of 10 and £10.30 for a pack of 20 cigarillos.

Alastair Williams, Country Director at Scandinavian Tobacco Group UK (STG UK), comments: “The recent rise of the flavoured cigarillo segment has made a pretty big impact on the channels in which cigars are sold. It used to be the case that only around a third of all sales went through the independent trade but now, that figure is just below 50%, and that is largely due to so many cigarillos being sold in that channel.”

The search for value has been a consistent trend in cigars for quite some time which is evidenced by the success of STG’s Moments Blue brand, which offers a quality smoke at a low price.

“It is now the sixth best-selling traditional cigar brand in the UK in value terms, but interestingly most of its’ sales go through the multiple grocery channel, so I wonder if it’s one area where independent retailers and wholesalers might be missing a trick by not stocking it? And with the added impact of the pandemic on the economy for the foreseeable future, I would only imagine this move towards value will increase,” adds Williams.

The performance of traditional cigars is fairly static and doesn’t tend to change too dramatically over time. However, if the recently emerging and fast-growing cigarillos segment is included, one can see that the combined category has grown strongly over the last year or so and is currently worth just over £278m in annual sales across the UK. The cigarillo segment is already worth just over £81m and accounts for just over 41% of all cigars sold in volume terms, but the growth in the total category has also been supplemented by the continual rise in the medium / large segment, albeit from a smaller base. Miniatures are still the largest segment within cigars, currently worth just under £105m in annual sales, while the small cigar segment appears to be continuing a slow but consistent decline.

“Of course, the first cigar on any list should be Signature which is by far the best-selling traditional cigar in the UK and very much the jewel in our crown,” adds Williams. “But there is more to the Scandinavian Tobacco Group cigar offer than just Signature. We also have Moments Blue as a value offer in the miniatures segment, Signature Action in the fast-growing cigarillo segment, and of course our Henri Wintermans Half Corona holds the position as the UK’s favourite Medium to Large cigar, so if wholesalers stock these as a minimum, they should be able to perfectly meet the needs of each and every one of their customers.”

“I think the sub-segments I’ve already mentioned like cigarillos and medium / large cigars will probably continue to grow in importance, so wholesalers need to ensure they are stocking the right brands to meet consumer demand,” advises Williams. “But let’s not forget it is miniatures which are the engine room of the category so ignore the top brands like Signature at your peril! And with the immediate economic forecast looking challenging, I would only expect the trend towards value products continuing and probably accelerating, so our Moments Blue brand should continue to grow in importance.”

“I believe it is very important to ensure our products are merchandised in a way that it makes it easier for the retailers to navigate, find them and purchase them,” suggests Williams. “Of course, consistent availability and competitive cost prices are essential, but keeping the range in sight for the retailer to buy, will ensure we have our products at the ‘risk of sale’ within their outlets. Brand blocking is an effective tool to merchandising, along with a clear category versus market trend approach to stocking products.”

STG regularly has meetings with its wholesale partners, discussing the market dynamics and ensuring their product mix is what the consumers and retailers are asking for. The firm also supports wholesaler to retail purchases of NPD through promotions and money off incentives. This can improve footfall into the wholesaler and potentially influence other purchases in depot, so a ‘win win’ for both parties.

With demand for roll your own accessories at an all-time high, quality, choice and value from leading accessories supplier, Republic Technologies (UK) Ltd, is contributing to the strong growth of the sector.

The tobacco accessories market is now worth over £316m (IRI) in the UK – with increasing pressure on suppliers to innovate to make their mark in the category. The market has seen YOY growth of 4.6% bolstered by a raft of innovative new product development.

“Effective product display is an important consideration in this category for driving awareness and demand, particularly if you are looking to increase profits by stocking a range of products that deliver on quality and brand assurance,” says Gavin Anderson, Head of Sales at Republic Technologies UK.

“Driving visibility of trusted, market-leading tobacco accessories brands is key to increasing shopper awareness and can be a successful tool towards encouraging impulse sales.”


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