Tobacco Insights: August 2017

Table of Contents

1. A Global Perspective 6

1.1. Cigarette Consumption & Production 6

1.1.1 Cigarette Consumption Trends, 2006-2016 6

1.1.2 Cigarette Production Trends, 2004-2016 10

1.1.3 Regional Cigarette Consumption, 2014 14

1.1.4 Regional Cigarette Production, 2014 15

1.1.5 Per Capita Consumption of Cigarettes by Country, 2006-2016 16

2. Global News 20

2.1. Asia-Pacifc 20

2.1.1. Australia 20

2.1.2. Bangladesh 20

2.1.3. Bhutan 20

2.1.4. Cambodia 20

2.1.5. China 20

2.1.6. Egypt 21

2.1.7. India 21

2.1.8. Japan 21

2.1.9. Malaysia 22

2.1.10. The Philippines 22

2.1.11. Singapore 23

2.1.12. South Korea 23

2.1.13. Thailand 23

2.2. Africa 23

2.2.1. Malawi 23

2.2.2. Tunisia 23

2.3. Middle East 23

2.3.1. Israel 23

2.3.2. Jordan 24

2.4. North America 24

2.4.1. Canada 24

2.4.2. The US 26

2.5. Latin America 30

2.5.1. Argentina 30

2.5.2. Cuba 30

2.6. Europe 30

2.6.1. Europe 30

2.6.2. France 30

2.6.3. Germany 32

2.6.4. Greece 32

2.6.5. The Netherlands 32

2.6.6. Spain 33

2.6.7. Sweden 35

2.6.8. The UK 35

3. Consumer Analysis of Recent Product Development 37

3.1. Pall Mall XL Black Edition – Maui Crepuscule 37

3.2. Moments – Panatella 38

3.3. Smoke Kitchen Trix – e-Liquid 39

3.4. Glo – Tobacco Heating Device 40

3.5. Marlboro – Amber Advance 41

3.6. Pall Mall – Red Beat 42

3.7. PromTekhNCH – Vape Inc Eagle – e-liquid 43

4. Company News 44

4.1. British American Tobacco 44

4.2. Eastern Co 45

4.3. Japan Tobacco 45

4.4. KT&G 45

4.5. Nicoventures Retail 46

4.6. Palmer & Harvey 46

4.7. Philip Morris International 46

4.8. R.J Reynolds Tobacco 52

4.9. Swedish Match 52

5. Consumer Analysis of Recent Product Development 54

5.1. Design innovation is becoming more important than packaging innovation 54

5.1.1. Filter as a tool to enhance flavor 54

5.1.2. Embedded capsules personalize cigarette flavors to specific tastes 55

5.1.3. Water capsules help regulate flavor intensity 56

5.2. Filters will experence greater innovation to differentiate products 57

5.2.1. Colored filters adds novelty to traditional cigarettes 57

5.2.2. Changing filter shapes to consumers needs helps persnalize a product 58

5.2.3. Transparent filters create a distinctive appearance 58

5.3. Is the RYO sector next? 59

5.4. Specialty filters will help identify counterfeit cigarettes 59

5.5. Who will set the filter innovation direction? 59

6. Appendix 60

6.1. About GlobalData 60

7. Disclaimer 61

List of Tables

Table 1: Global Cigarette Consumption, pieces (million), 2006-2016 6

Table 2: Global Cigarette Production, pieces (million), 2004-2016 10

Table 3: Regional Cigarette Consumption, 2014 14

Table 4: Regional Cigarette Production, 2014 15

Table 5: Per Capita Consumption of Cigarettes by Country, pieces, 2006-2016 16

Table 6: Japanese Smoking Rate, May 2017, Percentage Share (%) 21

Table 7: Japanese Smoking Rate, May 2017, Millions 22

Table 8: Japan and Japan Tobacco Monthly Cigarette Production, 2016-2018 22

Table 9: Canada: Monthly Cigarette Production and Sales, 2014-2017 24

Table 10: The US: Monthly Cigarettes Consumption & Production Trends, 2015-2017, Million Pieces 26

Table 11: The US: Monthly Small Cigars Consumption & Production Trends, 2015 – 2017, Million Pieces 27

Table 12: The US: Monthly Large Cigars & Cigarillos Consumption & Production Trends, 2015 – 2017, Million Pieces 27

Table 13: The US: Monthly Snuff Consumption & Production Trends, 2015- 2017, Thousand Pounds (lbs) 28

Table 14: The US: Monthly Chewing Tobacco Consumption & Production Trends, 2015- 2017, Thousand Pounds (lbs) 28

Table 15: The US: Monthly Pipe Tobacco Consumption & Production Trends, 2015 – 2017, Thousand Pounds (lbs) 29

Table 16: The US: Monthly Roll Your Own Tobacco Consumption & Production Trends, 2015 – 2017, Thousand Pounds (lbs) 29

Table 17: France: Monthly Tobacco Quantities Released for Consumption, 2014-2017 31

Table 18: Spain Tobacco Quantities Released for Consumption, 2014-2017 33

Table 19: Spain: Monthly Brand Shares, April 2016 & April 2017, % Volume 34

Table 20: Sweden: Swedish Match Shipment Volumes, Millions of Cans, 2016-2017 35

Table 21: Sweden: Swedish Match Scandinavian Snus Market Shares, Percentage Share (%), 2016-2017 35

Table 22: UK: Tobacco Quantities Released for Consumption, 2015, 2016 & 2017 36

Table 23: Pall Mall XL Black Edition – Cigarettes – Maui Crepuscule 37

Table 24: Moments- Cigars-Panatella 38

Table 25: Smoke Kitchen Trix – E-Liquid 39

Table 26: Glo – Tobacco Heating Device 40

Table 27: Marlboro – Cigarettes – Amber Advance 41

Table 28: Pall Mall – Cigarros – Red Beat 42

Table 29: PromTekhNCH – Vape Inc Eagle – e-liquid 43

Table 30: BAT: Half Year Financial Results, January-June 2017 44

Table 31: BAT: Half Year Financial Results and volume by Region, January-June 2017 44

Table 32: BAT: Cigarette Volumes by Region HY 2017, billion pieces, 2016-2017 45

Table 33: KT&G: Consolidated Sales/Profit for 1H 2017, KRW Billions 46

Table 34: KT&G: Domestic Sales/profits for 1H 2017, KRW Billions 46

Table 35: PMI: Smokeable Products: Shipment Volume (sticks in millions) 47

Table 36: PMI: Shipment Volume by Region in the 1st Quarter, million units, 2016-2017 47

Table 37: PMI: Shipment Volume by Brand in the 1st Quarter, million units, 2016-2017 48

Table 38: PMI: EU: Total Market: Shipment Volumes, million units, 2016-2017 48

Table 39: PMI: EU: Shipment Volumes by Brand, million units, 2016-2017 49

Table 40: PMI: EU Market Shares by Brand, Percentage Share (%), 2016-2017 49

Table 41: PMI: EEMA: Total Market: Shipment Volumes, million units, 2016-2017 49

Table 42: PMI: EEMA: Shipment Volumes by Brand, million units, 2016-2017 50

Table 43: PMI: Asia: Total Market: Shipment Volumes, million units, 2016-2017 50

Table 44: PMI: Asia: Shipment Volumes by Brand, million units, 2016-2017 50

Table 45: PMI: Latin America and Canada: Total Market: Shipment Volumes, million units, 2016-2017 51

Table 46: PMI: Latin America and Canada: Shipment Volumes by Brand, million units, 2016-2017 51

Table 47: Swedish Match: Summary of Consolidated Income Statement, Millions SEK, 2016-2017 52

Table 48: Swedish Match: Snus and Moist Snuff, Millions SEK, 2016-2017 52

Table 49: Swedish Match: Cigars and Chewing Tobacco, Millions SEK, 2016-2017 53

Table 50: Swedish Match: Lights, Matches and Complementary Products, Millions SEK, 2016-2017 53

List of Figures

Figure 1: Imports as % of Consumption, 2014 14

Figure 2: Exports as % of Production, 2014 15

Figure 3: Pall Mall XL Black Edition – Cigarettes – Maui Crepuscule 37

Figure 4: Marlboro Double Mix – Cigarettes 38

Figure 5: Smoke Mitchen Trix – E-Liquid 39

Figure 6: Glo – Tobacco Heating Device 40

Figure 7: Marlboro – Cigarettes – Amber Advance 41

Figure 8: Pall Mall – Cigarros – Red Beat 42

Figure 9: PromTekhNCH – Vape Inc Eagle – e-liquid 43

Figure 10: Filter innovation quote: Patrick Meredith, Director of Essentra 54

Figure 11: Consumer flavor preference in tobacco and anti-smoking aids 54

Figure 12: Bohem Café Cigarettes with capsules in orange coffee and ice coffee flavors 55

Figure 13: Change Esse Cigarettes with two capsules of strawberry wine and mango flavors 55

Figure 14: Winston XS Plus Aqua cigarettes with water capsule 56

Figure 15: Filter tow innovation quote: Perry Aliotti, sales vice-president at Celanese Corp 57

Figure 16: Solvay Acetow’s Rhodia colored filter 57

Figure 17: Essentra’s Twin Tec filter 58

Figure 18: YunYan’s transparent filter 58