Tobacco Industry to Boost a CAGR of 10% by the End of year 2013


tobaccoThe tobacco industry includes companies and people who are engaged in the preparation, expansion of sales, advertisement and distribution of tobacco or products related to it. Indian tobacco industry showed immense growth rate but its forecast is supposed to tumble down because of the restraint put on it by the Government of India, considering the hazardous health effects of consuming it. Indian markets are guided by the sale of chewing tobacco which is in turn followed by cigarettes; but globally the interest in cigarettes lies first. The revenues generated by cigarettes leads the market segment providing 681 billion dollars.

The development in the market is projected to quickly grow by 4.5 percent by the year 2015 with an amount of 890 billion dollars. Every minute around 12 million cigarettes are consumed with 1.3 billion smokers across the globe. An industry analysis report states that young adults are mainly involved in smoking with 34.7 percent males in the age group 25 to 34. The smoking rate in females is also showing a rise, with 27.4 percent in the age group 16 to 24. The budding market for tobacco industry comprises of BRICS (Brazil, Russia, India, China and South Africa) countries.

A CAGR (compound annual growth rate) of 10 percent has been recorded over the period of 2008 to 2013 which has reached a value of 138 billion US dollars. European tobacco market, United States tobacco industry and the Asia-Pacific tobacco sector is expected to grow at a rate of 3 percent, 5.5 percent and 2 percent respectively per year by 2015. These countries will almost reach the value of the tobacco market to 242 billion dollars, 483 billion dollars, and 106 billion dollars respectively.

The use of tobacco in developed countries is declining so the market players are shifting their focus to developing countries of Asia, Middle East etc. Companies are concentrating on different strategies to attract the consumers by offering low risk products which are free of nicotine, innovation in the product like flavored cigarettes etc. Smoking leads to early deaths and lung cancer. Due to the health concerns it is requisite that the companies include the health warnings and they are not permitted to take up the marketing campaigns. Major players in the field of tobacco market are Philip Morris International, ITC (Indian Tobacco Company), China National Tobacco Corporation, British American Tobacco(BAT) and Japan Tobacco etc.