Top Facts You Didn’t Know About Organic Tobacco market & Impact of COVID-19

Posted by Mrudula Anil Karmarkar on April 13th, 2022

The global organic tobacco market size is expected to reach USD 233.5 million by 2025, according to a new report by Grand View Research, Inc. It is projected to expand at a CAGR of 7.4% during the forecast period. The emergence of organic tobacco as key alternative to the conventional cigar and cigarettes owing to its low nicotine and sugar content is projected to remain a favorable growth driver. Over the past few years, anti-tobacco activists have been claiming that moderate consumption of organic cigarettes will help quit smoking.

Asia Pacific is expected to remain the fastest growing segment, witnessing a CAGR of more than 8% from 2019 to 2025, attributed to the shifting inclination of consumers towards roll-your-own cigarette product forms in prominent markets such as South Korea, Japan, Vietnam, and Malaysia. Furthermore, increasing disposable income and changing lifestyle among working class population in countries including China, India, Bangladesh, and Thailand is expected to expand the market size in the near future.

Smokeless segment is expected to foresee a CAGR of 9.8% from 2019 to 2025. Organic tobacco also finds application as an herbal alternative for curing various health problems including obesity and heal wounds. Rising concerns over adverse effects associated with synthetic pharma drugs in global healthcare sector is projected to promote the research spending towards the development of organic tobacco as medicinal alternative.

Over the past few years, tobacco farmers have been increasing spending on adopting organic farming methods which boost the crop yield as compared to conventional cultivation technologies. Furthermore, the United States Department of Agriculture (USDA) permitted use of the product for smoking as well as non-smoking applications.

The majority of smokers are now shifting towards organic tobacco rolled cigarettes, which is positively impacting the market. Rising health awareness is driving smokers to change their preferences. As the product is less harmful compared to conventional tobacco, the majority of smokers have been shifting their focus towards the consumption of cigars and cigarettes derived from organic tobacco, instead of quitting the smoking habit completely. This factor projected to drive product demand over the projected period.

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The smoking segment is one of the lucrative markets which is anticipated to retain its dominance over the forecast period. The sub-segment, roll-your-own tobacco, is gaining popularity and is one of the key reasons propelling the organic tobacco market growth. The key driver here is anti-tobacco activists who have a belief that organic tobacco compels one to quit smoking.

Further key findings from the report suggest:

  • Flue-cured is projected to exceed USD 100 million by 2025, on account of the product being enriched with high sugar content and low nicotine levels
  • The market revenue from smoking segment was valued at USD 122.6 million in 2018. Rising awareness among heavy smokers to quit smoking, is expected to expand the scope of organic tobacco over the next eight years
  • North America and Europe led the market, generating a total revenue of exceeding USD 80 million in 2018. High concentration of smokers in developed markets including U.S., Germany, and France is projected to remain the favorable factor in near future
  • Major manufacturers operating in the organic tobacco market include Santa Fe Natural Tobacco Company; Japan Tobacco Inc.; Hi Brasil Tobacco; Quinnington Organic Tobacco Company Pty; Bigarette & Co.; Vape Organics; and Mother Earth Tobacco

Key market participants include Santa Fe Natural Tobacco Company; Japan Tobacco Inc.; Hi Brasil Tobacco; Quinnington Organic Tobacco Company Pty; Cigarette & Co.; Vape Organics; and Mother Earth Tobacco. Mergers and Acquisitions (M&A) and increasing spending on R&D is projected to remain the critical success factor over the next eight years.

In 2015, Japan Tobacco Inc. completed the acquisition of Natural American Spirit, which includes nine subsidiaries owned by Reynolds American Inc. (RAI). Supportive policies aimed at upscaling the agriculture output through the utilization of organic farming by the governments of China and India is expected to open new business avenues for organic tobacco manufacturing firms in the near future.

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Mrudula Anil Karmarkar

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Mrudula Anil Karmarkar
Joined: July 2nd, 2020
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