Tobacco Insights: December 2018

Table of Contents

1. A Global Perspective 1

1.1. Cigarette Consumption and Production 1

1.1.1. Cigarette consumption trends, 2006-2016 1

1.1.2. Cigarette production trends, 2004-2016 5

1.1.3. Regional cigarette consumption, 2014 10

1.1.4. Regional cigarette production, 2014 11

1.1.5. Per capita consumption of cigarettes by country, 2006-2016 12

2. Global News 16

2.1. World News 16

2.2. Africa 17

2.2.1. Lesotho 17

2.2.2. Malawi 17

2.2.3. South Africa 17

2.2.4. Zimbabwe 18

2.3. Asia-Pacific 18

2.3.1. Australia 18

2.3.2. China 19

2.3.3. Hong Kong 20

2.3.4. India 20

2.3.5. Indonesia 20

2.3.6. Japan 21

2.3.7. Malaysia 21

2.3.8. New Zealand 22

2.3.9. Philippines 22

2.3.10. Singapore 23

2.3.11. South Korea 24

2.3.12. Thailand 25

2.4. Europe 26

2.4.1. The EU 26

2.4.2. Azerbaijan 27

2.4.3. Belgium 27

2.4.4. Finland 27

2.4.5. France 28

2.4.6. Germany 31

2.4.7. Hungary 34

2.4.8. Ireland 34

2.4.9. Italy 36

2.4.10. Romania 36

2.4.11. Russia 36

2.4.12. Spain 36

2.4.13. Sweden 38

2.4.14. Switzerland 39

2.4.15. The UK 39

2.5. Middle East 44

2.5.1. Israel 44

2.5.2. Jordan 44

2.5.3. Kuwait 45

2.5.4. Pakistan 45

2.6. North America 45

2.6.1. Canada 45

2.6.2. Mexico 48

2.6.3. The US 48

2.7. South and Central America 57

2.7.1. Brazil 57

2.7.2. Chile 57

3. Analysis of Recent product Development 58

3.1. Forte – Cigarettes with Charcoal Filter – Original 58

3.2. Royal Swag – Ayurvedic Smoke Therapy – Clove, Frutta, Mint 60

3.3. Herb Era Naturalo – Ayurvedic Smokes – Regular 61

3.4. Charlie's Chalk Dust Pacha Mama – Nicotine-Free Short Fill E-Liquid – Passion fruit Raspberry Yuzu 63

3.5. La Palina Goldie – Cigar – Canonazo 65

3.6. Gran Habano Gran Reserva No. 5 2012 – Cigar – Gran Robusto, Corona Gorda, Imperial, Czar, Grandioso 67

3.7. Fuente Fuente OpusX Heaven & Earth – Cigar – Purple Rain, BBMF, Tauros the Bull 68

3.8. El Rey del Mundo Coleccion Vintage – Cigar – Choix Supreme 70

3.9. Twelve Monkeys Ice Age – E-Liquid Short Fill – Hakuna Iced, Sabae Iced, Kanzi Iced, Matata Iced, Nikko Iced 71

3.10. Nasty Juice – E-Liquid Short Fill – Fat Boy, Cush Man, Bad Blood, Slow Blow, Asap Grape 73

3.11. Wick Liquor – Zero Nicotine E-Liquid Shortfill – Boulevard, Deja Voodoo, Carnival, Boulevard Shattered, Contra 75

3.12. Vgod Stig – Disposable E-Cigarette Pod – Lush Ice, Cubano, Mighty Mint, Tropical Mango 76

3.13. Vasconha – Rolling Tobacco 78

3.14. UltraBio – E-Liquid – Sweet Shot,Fresh Shot 79

3.15. 80

3.16. Mea Ame Organic Smokes – Cigarettes – Menthol, Regular, Mild 81

3.17. Ohm Baked – E-Liquid – Chocolate Brownie Ice Cream, Apple & Rhubarb Crumble, Cherry Bakewell, Apricot Passion Fruit Roulade 82

3.18. Archetype Fantasy Miniseries – Cigar – Crystals, Curses, Cloaks 83

3.19. Herrera Esteli – Cigar – Brazilian Stalk-Cut Maduro 85

3.20. Vapouriz 50/50 – E-Liquid – Lemon & Mango, Blue Raspberry Menthol, Mango & Raspberry Menthol, Cherry Menthol,Pear Drops, BlackJack, Rhubarb & Custard, Rolling Tobacco, Apple & Blackcurrant Menthol, Grape, Bubblegum, Gold Tobacco, Strawberry Licorice, Ice Mint, Blueberry, Silver Tobacco, Mango & Raspberry, Apple & Mixed Berries, Fruit Salad, Rainbow Fruits Menthol, Apple & Rhubarb Crumble 87

3.21. Vapouriz – Vaping Kit – V-Mini Rose Gold, V-Mini Dark Teal, V-Switch Rose Gold, V-Switch Dark Teal 88

4. Company News 90

4.1. Alliance One International 90

4.2. Altria 90

4.3. British American Tobacco 97

4.4. Habanos 98

4.5. Imperial Brands 98

4.6. Japan Tobacco Inc. 102

4.7. Joyetech Group 106

4.8. Juul Labs Inc. 106

4.9. Philip Morris International 106

4.10. Swedish Match 110

4.11. Universal Corporation 114

5. Summary of Next Generation Nicotine Delivery 2018 115

5.1. Regulatory Trends 115

5.1.1. Increasing the burden of proof 115

5.1.2. Protecting minors 115

5.1.3. Taxation 116

5.2. Consumer Trends 117

5.2.1. Nicotine Salt 118

5.2.2. Cannabis: An alternative to the alternative? 118

6. Appendix 121

6.1. About GlobalData 121

7. Disclaimer 123

List of Tables

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

Table 2: Global Cigarette Production (million pieces), 2004-2016 5

Table 3: Regional Cigarette Consumption, 2014 10

Table 4: Regional Cigarette Production, 2014 11

Table 5: Per Capita Consumption of Cigarettes by Country, Pieces, 2006-2016 12

Table 6: Per Capita Consumption Japan: Monthly Cigarette Production for Japan and Japan Tobacco, 2015-2017 21

Table 7: France Monthly Tobacco Quantities Released for Consumption, 2014-2017 28

Table 8: Top 10 Cigarette Brands in Ireland, 2014-2018 35

Table 9: Top 10 RYO Cigarette Brands in Ireland, 2014 – 2018 35

Table 10: Spain January Tobacco Quantities Released for Consumption, 2014-2017 37

Table 11: UK: Vaping hotspots by total number of vape shops, Top five hotspots 41

Table 12: UK: Tobacco Quantities Released for Consumption, 2015, 2016, 2017 & 2018 42

Table 13: Canada: Monthly Cigarette Production and Sales, 2014-2017 46

Table 14: The US: Monthly Cigarettes Consumption & Production Trends, 2016-2018, Million Pieces 52

Table 15: The US: Monthly Small Cigars Consumption & Production Trends, 2016-2018, Million Pieces 52

Table 16: The US: Monthly Large Cigars Consumption & Production Trends, 2016-2018, Million Pieces 53

Table 17: The US: Monthly Snuff Consumption & Production Trends, 2016-2018, Thousand Pounds 54

Table 18: The US: Monthly Chewing Tobacco Consumption & Production Trends, 2016-2018, Thousand Pounds 54

Table 19: The US: Monthly Pipe Tobacco Consumption & Production Trends, 2016-2018, Thousand Pounds 55

Table 20: The US: Monthly Roll-Your-Own Tobacco Consumption & Production Trends, 2016-2018, Thousand Pounds 56

Table 21: Forte – Cigarettes with Charcoal Filter – Original 58

Table 22: Royal Swag – Ayurvedic Smoke Therapy – Clove, Frutta, Mint 60

Table 23: Herb Era Naturalo – Ayurvedic Smokes – Regular 62

Table 24: Charlie's Chalk Dust Pacha Mama – Nicotine-Free Short Fill E-Liquid – Passion fruit Raspberry Yuzu 63

Table 25: La Palina Goldie – Cigar – Canonazo 66

Table 26: Gran Habano Gran Reserva No. 5 2012 – Cigar – Gran Robusto, Corona Gorda, Imperial, Czar, Grandioso 67

Table 27: Fuente Fuente OpusX Heaven & Earth – Cigar – Purple Rain, BBMF, Tauros the Bull 69

Table 28: El Rey del Mundo Coleccion Vintage – Cigar – Choix Supreme 70

Table 29: Twelve Monkeys Ice Age – E-Liquid Short Fill – Hakuna Iced, Sabae Iced, Kanzi Iced, Matata Iced, Nikko Iced 72

Table 30: Nasty Juice – E-Liquid Short Fill – Fat Boy, Cush Man, Bad Blood, Slow Blow, Asap Grape 74

Table 31: Wick Liquor – Zero Nicotine E-Liquid Shortfill – Boulevard, Deja Voodoo, Carnival, Boulevard Shattered, Contra 75

Table 32: Vgod Stig – Disposable E-Cigarette Pod – Lush Ice, Cubano, Mighty Mint, Tropical Mango 77

Table 33: Vasconha – Rolling Tobacco 78

Table 34: UltraBio – E-Liquid – Sweet Shot, Fresh Shot 79

Table 35: Mea Ame Organic Smokes – Cigarettes – Menthol, Regular, Mild 81

Table 36: Ohm Baked – E-Liquid – Chocolate Brownie Ice Cream, Apple & Rhubarb Crumble, Cherry Bakewell, Apricot Passion Fruit Roulade 82

Table 37: Archetype Fantasy Miniseries – Cigar – Crystals, Curses, Cloaks 84

Table 38: Herrera Esteli – Cigar – Brazilian Stalk-Cut Maduro 85

Table 39: Vapouriz 50/50 – E-Liquid – Lemon & Mango, Blue Raspberry Menthol, Mango & Raspberry Menthol, Cherry Menthol, Pear Drops, BlackJack, Rhubarb & Custard, Rolling Tobacco, Apple & Blackcurrant Menthol, Grape, Bubblegum, Gold Tobacco, Strawberry Licorice, Ice Mint, Blueberry, Silver Tobacco, Mango & Raspberry, Apple & Mixed Berries, Fruit Salad, Rainbow Fruits Menthol, Apple & Rhubarb Crumble 87

Table 40: Vapouriz – Vaping Kit – V-Mini Rose Gold, V-Mini Dark Teal, V-Switch Rose Gold, V-Switch Dark Teal 89

Table 41: Altria Headline Financials1 91

Table 42: Altria's Adjusted Results 92

Table 43: Smokeable Products: Revenues and OCI (US$ in millions) 93

Table 44: Smokeable Products: Shipment Volume (sticks in millions) 94

Table 45: Smokeless Products: Revenues and OCI (US$ in millions) 95

Table 46: Smokeless Products: Shipment Volume (sticks in millions) 96

Table 47: Imperial Brands Overview Adjusted Basis 99

Table 48: Imperial Brands Overview Reported Basis 99

Table 49: Imperial Brands Market Share Gains in Priority Markets led by Growth Brands 100

Table 50: Imperial Brands Growth Brands 101

Table 51: Japanese Domestic Cigarette Sales Results for October 2018 103

Table 52: JT 2018 Q3 Consolidated Results 104

Table 53: JTI 2018 Q3 Japanese Domestic Tobacco Business 105

Table 54: PMI Shipment Volume by Brand (million units) 108

Table 55: PMI Financial Summary (million US$) 110

Table 56: Swedish Match Financial Summary (MSEK) 111

Table 57: Swedish Match Snus and moist stuff Financial Summary (MSEK) 112

Table 58: Swedish Match Snus and moist stuff Shipment Volumes (Million in cans) 112

Table 59: Swedish Match Other tobacco products Financial Summary (MSEK) 112

Table 60: Swedish Other tobacco products US Shipment Volumes 113

Table 61: Universal Corporation Consolidated Results (US$) 114

List of Figures

Figure 1: Imports as % of Production, 2014 10

Figure 2: Exports as % of Production, 2014 11

Figure 3: Top 20 Market Shares of Cigar Sales From Gas Stations by Value in 2017 (%) 32

Figure 4: Top 20 Market Shares of Cigarillo Sales From Gas Stations by Value in 2017 (%) 33

Figure 5: Forte – Cigarettes with Charcoal Filter – Original 59

Figure 6: Royal Swag – Ayurvedic Smoke Therapy – Clove, Frutta, Mint 61

Figure 7: Herb Era Naturalo – Ayurvedic Smokes – Regular 62

Figure 8: Charlie's Chalk Dust Pacha Mama – Nicotine-Free Short Fill E-Liquid – Passion fruit Raspberry Yuzu 64

Figure 9: Herb Era Naturalo – Ayurvedic Smokes – Regular 66

Figure 10: Gran Habano Gran Reserva No. 5 2012 – Cigar – Gran Robusto, Corona Gorda, Imperial, Czar, Grandioso 68

Figure 11: Fuente Fuente OpusX Heaven & Earth – Cigar – Purple Rain, BBMF, Tauros the Bull 69

Figure 12: El Rey del Mundo Coleccion Vintage – Cigar – Choix Supreme 71

Figure 13: Twelve Monkeys Ice Age – E-Liquid Short Fill – Hakuna Iced, Sabae Iced, Kanzi Iced, Matata Iced, Nikko Iced 72

Figure 14: Nasty Juice – E-Liquid Short Fill – Fat Boy, Cush Man, Bad Blood, Slow Blow, Asap Grape 74

Figure 15: Wick Liquor – Zero Nicotine E-Liquid Shortfill – Boulevard, Deja Voodoo, Carnival, Boulevard Shattered, Contra 76

Figure 16: Vgod Stig – Disposable E-Cigarette Pod – Lush Ice, Cubano, Mighty Mint, Tropical Mango 77

Figure 17: Vasconha – Rolling Tobacco 78

Figure 18: UltraBio – E-Liquid – Sweet Shot, Fresh Shot 80

Figure 19: Mea Ame Organic Smokes – Cigarettes – Menthol, Regular, Mild 81

Figure 20: Ohm Baked – E-Liquid – Chocolate Brownie Ice Cream, Apple & Rhubarb Crumble, Cherry Bakewell, Apricot Passion Fruit Roulade 83

Figure 21: Archetype Fantasy Miniseries – Cigar – Crystals, Curses, Cloaks 84

Figure 22: Herrera Esteli – Cigar – Brazilian Stalk-Cut Maduro 86

Figure 23: Vapouriz 50/50 – E-Liquid – Lemon & Mango, Blue Raspberry Menthol, Mango & Raspberry Menthol, Cherry Menthol, Pear Drops, BlackJack, Rhubarb & Custard, Rolling Tobacco, Apple & Blackcurrant Menthol, Grape, Bubblegum, Gold Tobacco, Strawberry Licorice, Ice Mint, Blueberry, Silver Tobacco, Mango & Raspberry, Apple & Mixed Berries, Fruit Salad, Rainbow Fruits Menthol, Apple & Rhubarb Crumble 88

Figure 24: Vapouriz – Vaping Kit – V-Mini Rose Gold, V-Mini Dark Teal, V-Switch Rose Gold, V-Switch Dark Teal 89

Figure 25: Global: Consumers who say they are often/always influenced by the following factors when buying tobacco products, 2018 117

Figure 26: Pure CBD Exchange Aspen Valley CBD cigarettes 120