FEATURE
TOBACCO & RYO
62 ASIAN TRADER 17 OCTOBER 2025
the November budget, are
forcing both cigarette and
rolling tobacco smokers to
re-examine their choices
and seek products that
offer value without
compromising on quality.
“Products in the two
lowest pricing tiers – econ
omy and value – currently
account for 72 per cent of
all cigarette sales in the
UK, so it’s clear that the
quest for value remains a
relentless one. “
He adds that it does not mean
premium lines are necessarily in
retreat: “Premium products in
both cigarettes and rolling
tobacco also retain a highly loyal
customer base, so we’d recom
mend retailers continue to stock
these categories too. This is
especially the case in rolling
tobacco where nearly 37 per cent
of products sold are premium
[ITUK].
In other words, the most
prominent trend, which shows no
sign of slowing, is a market
splitting into two distinct trends:
a growing segment focussed on
value and economy brands and a
smaller but highly resilient and
loyal segment dedicated to
premium products. “For retailers
looking to support consumers and
ultimately drive bottom lines, the
key is to cater to both of these
distinct consumer groups with
trusted, high-quality offerings
that meet their specific de
mands,” says Malm.
Value and quality can also be
found fused together in next gen
tobacco products.
“Independent research
conducted by KAM on
behalf of Philip Morris
Limited (PML) high
lights that the opportu
nity is to be found in
appealing to variety,”
adds Dufourne.
“Findings show that 68
per cent of independent
retailers believe that
success will hinge on
offering a varied product
portfolio – one that
includes a full range of
e-cigarettes, heat-not-
burn products, and oral
nicotine pouches, rather
than relying on a single
category as they may
have done so previously with
disposables.
He says that by adopting a
multi-category product approach
that meets different consumer
tastes and preferences and
includes heat-not-burn (HNB)
tobacco devices and consumables
such as IQOS and Terea sticks.
“there’s an opportunity for
retailers to switch single-use vape
users to a different smoke-free
option, preventing them from
reverting back to cigarettes whilst
also protecting their store’s
bottom line.”
So, value and premium
traditional tobacco skus, plus the
option for HNB to catch smokers’
purchases while others peel off to
vapes – and still buy from you.
This protects revenue and
category share overall.
Although traditional tobacco
cannot promote itself in plain
sight, unlike next gen, Imperial’s
Malm recommends focusing on
attracting business through
permitted displays that look
organised and will visually appeal
to all customers.
As for the best products to
stock, Malm explains that with
value cigarette products account
quitting for vape, and the curse of
the black market.
He says that according to
anti-smoking lobbyists ASH, 73
per cent of UK adult smokers have
tried vaping, but only 23 per cent
have stuck with it – just one third.
“Recognizing that no single
smoke-free product can cater to
every smoker’s preferences,
embracing a multi-category
approach becomes indispensable
for those investing in their
smoke-free portfolio,” he says.
What’s changed recently is
that PMI’s IQOS net revenues
have surpassed those of Marlboro,
the world’s most valuable
cigarette brand, and this in less
than a decade since IQOS’ launch.
“In the UK, as with many other
markets, the growth of heated
tobacco has been in sharp contrast
to the decline in cigarette sales,
similarly to Europe where heated
tobacco unit sales have increased
by 9.4 per cent during the first
three months of 2024, reflecting
continuous growth momentum
for IQOS across the continent.”
If you don’t yet stock HNB
products – others are of course
available, such as JTI’s Ploom –
then it’s time to think about doing
so, as the economic case for
ing for 72 per cent of all cigarette
sales [ITUK], “We introduced
Paramount, a cigarette brand
targeting smokers seeking high
quality at exceptional value.
Paramount features premium,
full-flavour Virginia sun-ripened
tobacco, catering to the UK
market where most cigarettes
feature Virginia blends and
full-flavour tobacco”
Available in king-size and
super king-size formats, he says
that Paramount has become the
fastest growing brand in FMC in
FY25 [IMB].
Finally, he cites the
premium Golden Virginia
Original hand-rolling
tobacco, which now comes
in a 40g pouch, as well as
30g and 50g in response to
continued price inflation
and cost-of-living pressures
– “offering adult smokers
more choice”.
The appeal of HNB
Asian Trader talked to PMI’s
Paul Dufourne about the
wisdom of looking
seriously at heat-not-burn
products to defray losses in
traditional tobacco sales
due to taxes, smokers
Top tobacco tips
As the ‘Golden Season’ is now
upon us, Andrew Malm, UK
Market Manager at Imperial
Brands, provides some tips to help indie
retailers get the most out of their tobacco
gantry as Christmas approaches
Follow the money: sales of value products continue to
increase, so there is a clear need to focus efforts there.
However, it is worth remembering that premium products can
carry a higher margin and will always retain a loyal group of
smokers, so not these products completely from your store.
Retailers should engage proactively with customers to
understand what they are looking to purchase – this
intelligence then drives decisions around how ranges are
tailored on a store-by-store basis.
Become more proactive in checking stock levels to ensure the
most popular products are always available. This will help keep
customers happy and ensure they have no need to go.
Impulse purchases are very much on the rise – these present
fantastic incremental sales opportunities for retailers, so stock
a broader range of accessories to take advantage of this.