Whether we like it or not, addiction is profitable. It’s estimated that around 1 in 5 adults smoke, which highlights the gigantic size of the tobacco market. Even in industries as taboo as tobacco, innovation and evolution are inevitable. Often though, this is for the better, and in this article, we’re going to discuss how the business of tobacco is evolving.
Is Tobacco Still Cool?
Some would argue that traditional smoking has lost some of its cultural appeal in recent years. A combination of younger generations becoming more health conscious and more convenient alternatives becoming available has possibly contributed to this. For example, vapes and nicopods offer a similar relief from cravings without the pungent, bitter smell of tobacco.
Vaping: A “Saviour” for the Tobacco Market
If tobacco has lost its coolness, vaping has done a good job of acting as the market’s saviour. The more pleasant aroma instantly makes vaping more socially acceptable compared to traditional cigarettes, while the exotic flavours and catchy branding have reintroduced a cool factor, particularly among younger audiences.
New Opportunities
From a business perspective, it’s important to understand how these cultural changes present new opportunities. Nicotine products like vapes and e-cigarettes now find themselves in the lifestyle category, which brings a wealth of new marketing opportunities. For example, leading brands like Nicocharge can now advertise at major sporting events such as F1 races and Premier League football matches. In the past, strict legislation around alcohol and tobacco advertising would’ve restricted this.
Innovation also becomes a key factor in terms of differentiation. It’s difficult to differentiate a cigarette in terms of the product itself, so previously brands would rely on branding to stand out. Now, brands selling vapes, snus and other alternatives to cigarettes can call on innovation in terms of products and flavours. The relaxed laws also allow more experimentation in terms of brand partnerships and social media content.
This has reduced the barrier to entry for new brands that wish to enter the market. Tobacco smokers tend to be loyal to certain brands due to their name, but now smokers and vapers are being drawn to new brands that are offering something different.
The biggest opportunity, however, lies in the increased value of the market. As already pointed out, this new form of smoking is reaching younger audiences and unlike early e-cigs, vapes and nicopods aren’t positioned as a vehicle for quitting. Instead, these tobacco alternatives appeal to almost anyone, both smokers and non-smokers, and as a result, modern nicotine companies have a much larger audience to target.
Final Thoughts
It would be easy to look at the tobacco industry and assume that it is in decline. But if you take a step back and look at the bigger picture, it becomes clear that the industry is simply evolving in line with consumer demands. Modern nicotine products have addressed concerns, both health and social, to create a safer industry, but also a more profitable one.