Cigarettes and Smoking Cessation Aids - UK

Published by: Mintel International Group Ltd.

Published: May. 1, 2008 - 67 Pages

Table of Contents

Issues in the Market

Key themes

Definitions

Abbreviations

Market in Brief

Cigarettes still a huge industry

The big hitters

Legislation creates hamstrung industry

Impact of smoking ban

Plenty of reasons to give up

Smoking cessation aids still ripe for growth

The future

Internal Market Environment

Key points

Smoking in long-term decline

Figure 1: Trends in cigarette smoking, 2003-07

Potential quitters double

Figure 2: Cigarette smokers who are trying to give up, 2003-07

Less smoking of cigars and hand rolling tobacco

Figure 3: Smoking of hand-rolling tobacco, cigars and pipe tobacco, 2003-07

Smuggled cigarettes steal money

Figure 4: Smuggling and cross-border shopping, 2002/03-2005/06

Anti counterfeit scheme

Budget 2008 - tax increase

The right to smoke

Restrictions on cigarette advertising

Pictorial Health Warnings

Must be 18

Hidden display in the offing?

VAT reduction on nicotine replacement products

Broader Market Environment

Key points

Anti-smoking views intensify

Figure 5: Changes in socio-economic status, 2003-2013

More potential smokers

Figure 6: Changes in the UK demographic profile, by age, 2003-2013

Ban on smoking in public places

Young DE women least favour the ban

Health v pleasure

Competitive Context

Key points

Cigarettes

Addiction to the nicotine rush

Recreational drugs

Swedish Snus

Smoking cessation aids

Willpower competes

Strengths and Weaknesses in the Market

Strengths

Weaknesses

Market Value and Forecast

Key points

Cigarettes

Volume drives down value in real terms

Figure 7: UK retail sales of duty-paid cigarettes, by volume and value, 2003-13

Smoking ban accelerates volume decline

Smokers adapt to ban

Must be 18

Gradually contracting to the core

Trading down as key consumers’ incomes are squeezed

Lower socio-economic form core smokers

Government loses billions

Figure 8: UK duty-paid and non-duty-paid sales of cigarettes, by volume, 2003-08

Effect of EU expansion

Smoking cessation aids

Pressure to quit

Figure 9: UK retail sales of nicotine replacement products, by value, 2003-13

Growth more than halves as ardent smokers remain

The young should form target

The future

Segment Performance

Key points

Cigarettes

Price sensitivity slows creeping average price

Pack price of 20 increases

Figure 10: Typical UK retail prices of cigarettes per pack of 20, by price category, 2003-08

Price increases due to increases in tax and duty

Convenience and price dictate purchase

Figure 11: UK retail volume sales of duty-paid cigarettes, by price category, 2003-07

Smoking cessation aids

Patches and gums continue to dominate

Figure 12: UK retail sales of nicotine replacement products, by type and value, 2003-07

Market Share

Key points

Cigarettes

Imperial occupies imperial position

Figure 13: Cigarette manufacturers' UK market shares of duty-paid sector, by volume, 2005 and 2007

Gallaher’s success with Sterling

Internet

Smoking cessation aids

Shares stable but sales grow

Figure 14: Manufacturers’ shares of smoking cessation aids market, by value, 2005 and 2007

Companies and Products

Key points

Cigarettes

Imperial Tobacco

Gallaher

Philip Morris International

British American Tobacco (BAT)

Smoking cessation aids

Nicorette

NiQuitin

Nicotinell

Boots (NicAssist)

Nicobrevin

Nicopatch/Nicopass

Brand Communication and Promotion

Key points

Cigarettes

Restrictions on cigarette advertising

Point of sale availability crucial

Cigarette display ban

Smoking cessation products

Advertising spend surges ahead

Figure 28: Main media advertising expenditure on smoking deterrents, 2003-07

NiQuitin retains No.1 slot

Figure 29: Main media advertising expenditure on smoking deterrants, by brand, 2005-07

Channels to Market

Key points

Cigarettes

Forecourts lose least

Figure 30: UK retail distribution of duty-paid cigarettes, by value, 2005 and 2007

Forecourts and grocery multiples gain

Forecourts need smokers

Forecourts and brands

Multiples

CTNs

Internet

Smoking cessation aids

Pharmacies enjoy greatest gains

Figure 31: UK retail sales of smoking cessation aids, by outlet type and value, 2005 and 2007

Multiples lose share but gain sales

Internet

Smoking Habits and Effect of Ban in Public Places

Key points

Volumes head south

Figure 32: Trends in cigarette smoking, 2003-07

Fewer people smoking

Less heavy smokers

Cigarette of choice

Figure 33: Type of cigarettes smoked, 2003-07

The challenge to patches

Figure 34: Methods used to try and give up smoking, 2003-07

Smokers divided on wanting to give up

Figure 35: Smoking habits, March 2008

Typical never smoker

Affordability not an issue for the smoker

Smoking higher in Scotland

Effect of smoking ban in public places

Figure 36: Impact of the smoking ban in public places, March 2008

Mixed response to the ban

Figure 37: Smoke fewer cigarettes of smoke more at home since ban, by age and socio-economic group, March 2008

One in ten quit after the ban, but will it be for good?

Impact greatest in Scotland, Ulster and North West

Appendix - Broader Market Environment

Figure 47: Agreement that: ‘The ban on smoking in public places is a good idea, by demographic sub-group, 2007

Appendix - Smoking Habits and Effect of Ban in Public Places

Figure 48: Cigarette smoking, by demographic sub-group, 2007

Figure 49: Smoking patterns, by demographic sub-group, 2007

Figure 50: Smoking habits, by demographic sub-group, March 2008

Figure 51: Impact of the smoking ban in public places, by demographic sub-group, March 2008

Abstract

Some 12 million people smoke in the UK (around a quarter of adults) - this translates to around £25,000 per minute literally “going up in smoke”. The nicotine rush is powerful and pleasurable, and a force to be reckoned with. Over half of smokers claim they want to give up, but only four out of ten are actually trying to give up, and yes, some do actually kick the habit permanently.

As a result, the tobacco industry is in gradual long-term decline, with smokers trading down, and smoking fewer cigarettes. Punitive legislation limits marketing activity, the most visible being the smoking ban in public places introduced in England in 2007. The media predicted meltdown, but they appear to have been proved wrong.

Key themes of the report:

• Has the recent smoking ban in public places caused meltdown in the industry?
• What is responsible for the long-term decline in volume?
• Who smokes, why do they smoke, and how frequently?
• Positioning in the value/economy sector as the way forward.
• Reasons for giving up smoking and attitudes towards quitting.
• What do potential quitters think of smoking cessation aids?

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