Global Next-Generation Cigarettes Market
Next-Generation Cigarettes Market size was valued at USD 25.8 billion in 2019 and is projected to reach a valuation of USD 194.5 billion by the end of 2031, rising at a CAGR of 17.1% during the forecast period, i.e., 2019-2031. In 2020, the industry size of next-generation cigarettes was evaluated at USD 28.9 billion.
The next-generation cigarettes market is rising due to increased consumer demand for smoke-free alternatives, as well as reduced-risk products. The major tobacco companies are spending big bucks on innovative products like heated tobacco and e-cigarettes to keep up with changing market preferences. In June 2023, ITG Brands added a nicotine pouch range from TJP Labs to its portfolio as the company looks to capitalize on the burgeoning market for smoke-free products in the U.S. This acquisition continues an emerging trend of diversifying the methods of consuming nicotine of which the first is moving towards non-combustible nicotine products. With the competition getting intense, companies are stretching out their offerings further to develop novel flavor profiles and improve device performance.
Government regulations that restrict youth access and promote safer choices of traditional cigarettes are also acting as growth catalysts for the market. For instance, the World Health Organization (WHO) called for stricter regulations on novel nicotine products aimed at younger demographics in May 2024 as youth addiction rates grow. The regulatory shift is forcing manufacturers to innovate responsibly while maintaining compliance with developing public health policies. Moreover, governments in Europe and North America have started public awareness campaigns to educate consumers on the possible health benefits of reduced-risk nicotine products that continue to fuel next-generation cigarettes market momentum.
Growth Drivers
Challenges
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Base Year |
2019 |
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Forecast Year |
2019-2031 |
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CAGR |
17.1% |
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Base Year Market Size (2019) |
USD 25.8 billion |
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Forecast Year Market Size (2031) |
USD 194.5 billion |
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Regional Scope |
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Product Type (E-Cigarettes, Heated Cigarettes)
Heated cigarette segment is estimated to account for more than 71.1% next-generation cigarettes market share by the end of 2031. Heated cigarettes are seeing some popularity as the smoke contains fewer toxins than traditional combustible cigarettes. In June 2023, Altria acquired NJOY Holdings, providing access to NJOY ACE, an FDA-authorized e-vapor product. Altria’s move is strategic as it includes a mainly reduced-risk product category. Further driving demand for heated cigarettes as a safer alternative is increasing consumer awareness about health risks related to smoking.
Components (Device, E-Liquid, Flavors, Accessories)
By the end of 2031, device segment is poised to hold over 40.3% next-generation cigarettes market share, on the back of continuous advancement in product design and technology. In August 2021, RELX took its premium vape brand to Saudi Arabia, responding to rising demand for inventive devices in emerging markets. This expansion highlights the key role of advanced devices in stimulating market growth. Furthermore, tech-savvy demand customizable devices with longer battery life and more temperature controls, another factor driving the segment’s growth.
Our in-depth analysis of the global market includes the following segments:
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Product Type |
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Components |
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Age Group |
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Gender |
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Distribution Channel |
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Europe Market Analysis
Europe in next-generation cigarette market is expected to capture over 46.7% revenue share by 2031. The growth is propelled by changing consumer preference for reduced-risk tobacco products and increased government rules on smoking traditional cigarettes. Importantly, 24 percent of the EU population still smokes, suggesting that there is still an ongoing need for alternatives as consumers continue to seek healthier options. This is a development tied to Europe greater focus on harm reduction and alternative, healthier products such as e-cigarettes, heated tobacco products (HTPs), and vaping devices. Market growth across the region is further accelerated by the expansion of retail channels and increasing awareness of smoking cessation programs.
Germany is one of the largest markets for next generation cigarettes in Europe due to the evolution of public attitudes and increasing acceptance of alternative tobacco products. Large manufacturers have been encouraged by the country’s progressive regulations and tax incentives for reduced-risk products. In 2021 in Germany, 22.7% of 18 to 64-year-old adults were current tobacco smokers, thus leaving a large potential market for next-generation products as smoking rates slowly decrease. Also, the increasing number of adult smokers switching from e-cigarettes and heated tobacco products to Germany, also promotes the market growth in Europe. Furthermore, widespread product availability is further fuelled by tobacco company collaborations with significant retail chains.
The next generation cigarette market in France is expanding steadily as the government works towards eliminating smoking with innovations, such as heavy taxes on traditional cigarettes. Changing preferences and increasing health consciousness have led to a growing demand for e-cigarettes and heat-not-burn products among younger consumers. In fact, the average daily consumption of electronic cigarettes by adults in France increased from 2.2% to 15.2% between 2021 and 2022. French tobacco companies are investing heavily in innovation to maintain market share while complying with tight EU regulations.
APEJ Next-Generation Cigarettes Market Statistics
APEJ next-generation cigarette market is set to exhibit CAGR of around 17.4% from 2019 to 2031, influenced by rapid urbanization, growing disposable income, and growing health awareness. Governments are launching various initiatives to stop smoking initiative, and consumers are forced to change their ways by embracing products of a higher ‘harm level'. Aggressive marketing in the region is driving the adoption of e-cigarette brands, along with the proliferation of e-cigarette brands. APEJ is also experiencing strong growth fueled by the increase in flavored vaping products among the younger demographics.
India next generation cigarette market is anticipated to expand at a steady pace due to urbanization, growing awareness of the health risks of traditional smoking, and increasing attention to harm reduction alternatives. Despite strict government regulations on e-cigarettes, the market for heated tobacco products still keeps growing. India has one of the highest rates of youth smoking in the world, with major implications for public health programs attempting to decrease youth tobacco use. Tobacco manufacturers are leading the way in introducing new products that better meet changing consumer preferences. Moreover, next-generation products grow as middle-class incomes rise and social attitudes towards smoke alternatives evolve.
In APEJ next generation cigarette market, China is emerging as a leader with a robust base of e-cigarettes and heated tobacco products consumers. Furthermore, China government emphasizes national health campaigns to reduce smoking rates and adopt alternatives that embrace harm reduction. For instance, nearly 300 million people in China smoke, a huge potential market for next generation products as public health initiatives gain momentum. To grow their next-generation product lines, major Chinese tobacco companies are devoting major efforts to research and development. With the growth of e-commerce platforms and specialty stores, the broad product availability can only positively contribute to China’s position in the regional next generation cigarette industry.
The next-generation cigarettes market is highly competitive, with the leading players including British American Tobacco, Philip Morris International, Japan Tobacco Inc., Imperial Brands plc, Altria Group, Inc., and JUUL Labs, Inc. Strategic collaborations and acquisitions are shaping the competitive landscape. To increase their product awareness, these players are spending on digital marketing campaigns to expand their consumer base. In November 2023, PMI reported that smoke-free products contributed 36.5% of its total revenue, driven by increased demand for reduced-risk alternatives. The fact that companies investing in next generation products are gaining such a competitive advantage points to companies that choose to invest in the emerging tobacco industry as future leaders in the evolving tobacco industry.
Here are some leading companies in the next-generation cigarettes market:
Author Credits: Parul Atri
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