1、Circana,LLC|For public use1Copyright 2024 Circana,LLC(“Circana”).All rights reserved.Circana,the Circana logo,and the names of Circana products and services are trademarks of Circana.All other trademarks are the property of their respective owners.2024 Tobacco Landscape November 2024An Omnichannel a

2、nd Consumer ViewCIRCANA INSPIRE Circana,LLC|For public use2 2Executive SummaryThe tobacco category,including cigarettes,cigars,smokeless tobacco and electronic smoking devices,has$84 billion in multioutlet and convenience channels sales,with declines across cigarettes and electronic smoking devices,

3、but growth in smokeless tobacco.This report examines shifting consumer behavior and how the industry is responding.Inflationary pressures persist,and consumers are looking for promotions and more affordable options.Knowing what else is in tobacco buyers baskets can unlock opportunities to cross-merc

4、handise,including carbonated beverages,energy drinks,beer and chocolate candy.The convenience channel reflects the largest vape product sales gains;non-tracked independent tobacco and vape stores likely command the largest share of vape sales.Just more than half of tobacco buyers are poly-users.Oppo

5、rtunities exist to promote different products for different occasions and to add variety to consumption.Aligning with tobacco company goals of developing reduced-harm nicotine products,innovation should highlight reductions in harmful chemicals or promote positive attributes of flavor or aroma.TREND

6、SOPPORTUNITIES While the U.S.economy is demonstrating resilience,persistently high inflation continues to weigh on consumers,especially the 21-24 adult consumers and low-income households.While these consumers over-index on cigar purchases,there have been strong sales in new,more affordable cigarett

7、e brands.Tobacco is one of the most heavily regulated industries,with the Food and Drug Administration overseeing the manufacturing,distribution and marketing of tobacco products in the U.S.Every global tobacco company has a stated goal of developing and selling reduced-harm nicotine products.The co

8、nvenience channel is the dominant tobacco channel;other channels include supermarkets,liquor stores,newsstands and pharmacies.The tobacco industry would also like to track sales of vape products from vape stores.C-stores outperformed other multioutlet retailers in sales of cigarettes,but underperfor

9、med in“other tobacco,”which includes spitless and chewing tobacco,and papers.Cigar sales show growth(2.3%YOY)across channels,but“modern oral,”or spitless tobacco,now commands nearly 5%of total tobacco sales,and it has experienced unit increases of 50%YOY.Among new products tracked through MULO+C,aff

10、ordable cigarettes top the list in dollar sales,but electronic smoking devices are tops in the number of new offerings.2Circana,LLC|For public useCircana,LLC|For public use3 3Persistently high inflation weighs heavily on U.S.consumers,especially adults ages 21-24 and lower-income householdsHigh pric

11、es across consumer product goods signal an opportunity for retailers to leverage frequent shopper platforms to drive focused promotions to adult tobacco consumers.Source:Circana Survey Solutions,January 2024,total U.S.primary grocery shoppers.The Total U.S.Based on Generation Extremely ConcernedBase

12、d on HH Income Level Extremely Concerned49%43%7%N-2,324Total respondents:2,324Extremely ConcernedSomewhat ConcernedNot at All Concerned59%53%51%46%45%40%Gen Z/Younger MillennialOlder MillennialGen XOlder BoomersRetirees and SeniorsYounger Boomers61%54%36%Lower IncomeMiddle IncomeUpper IncomeCircana,

13、LLC|For public use4 4Circana,LLC|For public useTobacco appears to be at a nexus pointContinued regulatory pressures,ongoing cigarette declines,and changing consumer dynamics have the industry rethinking its strategiesSource:The World Health Organizations(WHO)Framework Convention on Tobacco Control(F

14、CTC).Statista.Regulatory EnvironmentTobacco is one of the most heavily regulated industries in the world.The Family Smoking Prevention and Tobacco Control Act regulates tobacco products,including cigarettes,cigars and e-cigarettes.The FDA regulates the manufacturing,distribution and marketing of the

15、se products.Channel CoverageTobacco retailers include convenience stores,supermarkets,liquor stores,newsstands independent shops and pharmacies.The tobacco industry has expressed strong interest in tracking sales of e-vapor products in vape stores.Consumer TrendsIn 2020,22.3%of the global population

16、 used tobacco,encompassing 36.7%of all men,and 7.8%of the worlds women.The revenue size of the global tobacco products market was$912 billion as of 2022,and it is projected to grow at a compound annual rate(CAGR)of 3.75%from 2023 to 2028.Reduced Harm FocusThe global nicotine replacement therapy mark

17、et was valued at$2.7 billion in 2021,and it is projected to reach$5.9 billion by 2031,growing at a CAGR of 8.3%.Every global tobacco company has a stated goal of developing and selling reduced-harm nicotine products.Circana,LLC|For public use5 5Convenience,the dominant tobacco channel,shows gains in

18、 the numbers of stores,dollars and units per trip,but fewer trips per buyer C-store channel performance relative to competition for critical drivers in Q2 2024Difference vs.=YOY%Chg.Conv-YOY%Chg.Competition.Source:Circana U.S.C-Store Landscape Q2 2024.To learn more about the convenience channel,read

19、 our U.S.C-Store Landscape report.%vs.YADiff vs.MULO+Dollar Sales-1.2%-3.2%Unit Sales-4.3%-4.2%Number of Stores+1.1%+1.3%CPG%vs.YADiff vs.QSRDollar Sales+2.0%+0.0%Traffic-3.1%-1.1%Average Check+5.0%+0.0%FOODSERVICE%vs.YADiff vs.OmnichannelDollars per Trip+2.8%+2.8%Units per Trip-0.9%+3.1%Trips per B

20、uyer-4.1%-5.2%TRIPS%vs.YA%vs.Q1Average MonthlyFuel Volume per Buyer(Gallons)-1.6%+1.5%FUELCircana Convenience ScorecardC-stores decreased trips per buyer and units per trip year over year in Q2 2024Channel Performance|Q2 2024%Change vs.YASource:Circana,Consumer Receipt Panel,data NBD adjusted,Rollin

21、g 13 WE June 16,2024,total store excluding fresh.Circana,LLC|For public use6 6Circana,LLC|For public useUnits per trip decreased YOY for all channels in Q2Convenience and drug channels saw the most significant decreases in trips per buyer YOY-12.0%-10.0%-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%OMNICH

22、ANNELCONVENIENCEFOODDRUGDOLLARCLUBMASSXTrips per BuyerUnits per TripDollars per TripCircana,LLC|For public use7 7Circana,LLC|For public useU.S.MULO+U.S.Convenience YOY price per unit growth remained consistent in convenience,and outpaced MULO+in Q2Source:Circana,POS,13 WE June 30,2024.Average price

23、per unit across the store%change vs.YAIn Q2,average PPU increased from$4.08 to$4.22 YOY in c-stores,while MULO+increased from$4.98 to$5.08.8.5%5.4%3.3%1.7%2.0%6.1%5.2%3.2%3.2%3.2%Q2 2023Q3 2023Q4 2023Q1 2024Q2 2024Circana,LLC|For public use8 8Circana,LLC|For public use-8%-6%-4%-2%0%2%4%6%8%HEALTH&BE

24、AUTY CAREALTERNATIVE SNACKSOTHER DAIRY&DELISWEET SNACKSCANDYSALTY SNACKSOTHER TOBACCOBEERPACKAGED BEVERAGES(NA)CIGARETTESCigarettesPackaged Beverages(NA)BeerOther TobaccoSalty SnacksCandy Sweet SnacksOther Dairy&DeliAlternative SnacksHealth and Beauty CareTotal U.S.Convenience Total U.S.Multi-outlet

25、+C-stores outperformed MULO+in cigarettes,but underperformed in other top categories in Q2Category Performance|Q2 2024 Dollar Sales%Change vs.YA*Top categories based on U.S.convenience sales$in Q2 2024;Source:Circana,POS,13 WE June 30,2024.Circana,LLC|For public use9 9Customers continued to opt for

26、lower-priced products in c-stores in Q2 2024Lower-priced products highlight a need for retailers and manufacturers to determine the most effective promotional options for managing trade-downs.Circana Inflation MonitorSource:Circana,U.S.convenience POS,13 WE June 30,2024.Customers are trading down to

27、 lower-priced products(mix)in many of the top sales categories,including cigarettes and other tobacco products.-4%-2%0%2%4%6%8%10%Q22022Q32022Q42022Q12023Q22023Q32023Q42023Q12024Q22024AssortmentWhat the retailer makes availableMixWhat the customer purchasesInflationWhat prices the retailer sets-15%-

28、10%-5%0%5%10%15%20%OverallCIGARETTESOTHER TOBACCOPACKAGED BEV(NA)BEERCANDYSALTY SNACKSHEALTH&BEAUTYInflationAssortmentMixCigarettesOther TobaccoPackaged Bev(NA)BeerCandySalty SnacksHealth&BeautyOverallCircana,LLC|For public use1010Circana,LLC|For public useCigarettes dominate the tobacco landscape,b

29、ut other tobacco products are gainingTotal U.S.Convenience|Aug 2024Share of Dollar SalesShare of$SalesGrowth vs.YACigarettes71.7%(3.6%)Smokeless Tobacco13.7%+14.3%Electronic Smoking Devices8.4%(5.2%)Source:Circana POS 52 weeks ending August 11,2024.10Circana,LLC|For public useCircana,LLC|For public

30、use1111Circana,LLC|For public useTobacco sales are over$84B in MULO+c-store channelWhile sales are declining,c-store outperforms other channelsSource:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.Circana,LLC|For public use11Channel struggles highlight the need for retailers to be mi

31、ndful about customer experience.-17.2%-6.0%-5.6%-5.7%-1.3%-6.1%-6.0%-4.5%3.5%-0.8%-0.9%-0.7%52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Total Tobacco|Dollar Sales%Change vs.YA Total U.S.-Multi Outlet+Total U.S.-FoodTotal U.S.-ConvenienceCircana,LLC|For public use1212Circana,LLC|F

32、or public use3.8%3.5%0.3%-1.5%-0.1%-1.5%-1.1%-0.4%Chain Convenience Dollar Sales%Chg vs YAIndependent Convenience Dollar Sales%Chg vs YAChain vs.Independent C-Store%Change52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Tobacco performance in independentc-stores is outpacing chain sto

33、resSource:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.Circana,LLC|For public use1313Cigarette sales continue to decline across channels,with convenience experiencing the lowest rate of YOY lossSource:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.-16.9%-6.9%-6.4%-7

34、.2%-1.2%-6.5%-6.8%-5.8%1.2%-3.1%-3.0%-3.1%52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Cigarettes|Dollar Sales%Change vs.YA Total U.S.-Multi Outlet+Total U.S.-FoodTotal U.S.-ConvenienceCircana,LLC|For public use1414Cigar sales show growth across channels,moderating at 2.3%YOYSourc

35、e:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.-14.8%-2.0%-2.4%4.5%0.7%-2.7%1.9%2.4%6.5%0.2%-0.2%2.3%52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Cigar|Dollar Sales%Change vs.YA Total U.S.-Multi Outlet+Total U.S.-FoodTotal U.S.-ConvenienceCircana,LLC|For public u

36、se1515Traditional smokeless tobacco sales show decreases in all channelsSource:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.-22.7%-7.4%-6.7%-8.8%-3.2%-6.8%-5.0%-3.2%1.7%-2.4%-1.1%-2.6%52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Traditional Smokeless|Dollar Sales

37、%Change vs.YA Total U.S.-Multi Outlet+Total U.S.-FoodTotal U.S.-ConvenienceCircana,LLC|For public use1616as consumers shift to modern oral tobaccoRetailers should review current assortment to ensure that theyre meeting consumer preferences.Source:Total U.S.MULO+&Convenience Circana POS CY 2024,Augus

38、t 11,.2023.93.1%40.5%49.7%77.4%110.4%38.8%52.7%64.1%46.9%33.7%40.5%65.8%52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Modern Oral|Dollar Sales%Change vs.YA Total U.S.-Multi Outlet+Total U.S.-FoodTotal U.S.-ConvenienceModern oral refers to disposable,smokeless,spitless nicotine pouc

39、hes placed between the gum and lip.16Circana,LLC|For public useCircana,LLC|For public use1717Circana,LLC|For public useModern oral tobacco is the industry darling As consumer preferences change,retailers will have to monitor shopping behaviors to stay ahead of current trends.Source:Total U.S.MULO+&C

40、onvenience Circana POS CY 2024,August 11,2023.$882M$1309M$1753M$2469M$4106M52 WE 08-16-20 52 WE 08-15-21 52 WE 08-14-22 52 WE 08-13-23 52 WE 08-11-24Dollar Sales Modern Oral Tobacco2.0ppts Dollar Share Change+50%Unit change4.9%Dollar Share of Tobacco721B Unit Sales$20.9K Dollars Per Store SellingCir

41、cana,LLC|For public use1818Circana,LLC|For public useVape sales have made a dramatic comeback in the food channel since 2021However,food represents only a small%of total vape industry salesSource:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.Circana,LLC|For public use18-68.9%190.1%1

42、9.7%5.0%-26.6%53.2%34.2%36.7%23.8%15.6%5.8%-5.3%52 WE 08-15-202152 WE 08-14-202252 WE 08-13-202352 WE 08-11-2024Vape|Dollar Sales%Change vs.YA Total U.S.-Multi Outlet+Total U.S.-FoodTotal U.S.-ConvenienceCircana,LLC|For public use1919Circana,LLC|For public useWe believe theres more to the vape story

43、Source:Total U.S.MULO+&Convenience Circana POS CY 2024,August 11,2023.HypothesisConsumer traffic appears to be migrating to non-tracked/measured channels:Independent tobacco and vape storesVape$Sales Change 2024-8.1%Chain C-Stores-3.8%IndependentC-Stores19Circana,LLC|For public useCircana,LLC|For pu

44、blic use202001MontegoBrooke GroupCigarette$413.9M06Tyson Heavy WeightJBrandsElectronic Smoking Devices$41.9M02Geek Bar PulseGeek BarElectronic Smoking Devices$105.0M07Pall Mall Red-Blue-GreenBritish American TobaccoCigarette$23.4M03Camel ClassicBritish American TobaccoCigarette$94.9M08Game LeafSMCI

45、HoldingCigar$20.5M04Elf Bar Lost MaryVape OnlyElectronic Smoking Devices$74.2M09GrizzlyBritish American TobaccoSmokeless Tobacco$20.4M05CougarBritish American TobaccoSmokeless Tobacco$69.3M10Raz Vaping ProductsGuangdong Qisitech Electronic Smoking Devices$17.0MSeveral top new tobacco products in the

46、 convenience channel were vape productsSource:Circana Total U.S.Conv 52 Weeks ended December 2023Circana,LLC|For public use2121Circana,LLC|For public useTobacco landscape implications and opportunities21Circana,LLC|For public useInflationary pressures impact total store.Howcan you and manufacturer p

47、artners determine themost effective promotional options for managingtrade-downs for tobacco?Are you leveraging frequent shopper platforms to drive focused promotions to adult tobacco consumers?The highest sales gains are seen in the smokeless tobacco segment.Review current assortment to ensure that

48、youre meeting preferences for your stores.Monitor shopping behavior to stay ahead ofchanging trends.Many consumers will look for alternative products if their preferred tobacco products are unavailable.How do you compete against vape stores and independent tobacco stores to keepyour customers?How do

49、es the customer experience compare toother channels?What innovations satisfy consumer demand and state laws?Monitor tobacco users total basket for promotional opportunities.Circana,LLC|For public use2222Circana,LLC|For public useCircana Solutions Learn more about how the solutions in this report can

50、 support your business.22Circana,LLC|For public useReceipt Panel provides best-in-class item classification and on-the-fly alignment to market measurement sales trends to understand omnichannel purchasing.Receipt PanelInflation MonitorInflation Monitor is the only source that quickly decomposes aver

51、age price to diagnose whether changes in average price are true inflation,mix shifts or assortment.Survey Solutions operates at the intersection of what people think and what they do,leveraging verified purchase behaviors and a comprehensive survey portfolio to better explain and anticipate peoples

52、choices.Survey SolutionsMULO+is the largest census-based POS coverage of CPG core channels.MULO+Circana,LLC|For public use23Circana,LLC|For public use23Want to learn more?Circana can help.Plus,registered users get new thought leadership from Circanas research,data,and analytics experts.Scan the QR code to subscribe or email us at Circana,LLC|For public use24ThankyouBoris OglesbyExecutive Vice President,Practice Leader,Alcoholic Beverages and T