Summary

Tobacco consumption in South America has been a significant concern, with a notable trend of younger individuals being drawn to these products due to the perceived relaxation and social benefits associated with smoking. Despite global efforts to reduce tobacco use, South America remains one of the regions with a high prevalence of tobacco consumption. This trend, particularly among the youth, is influenced by a combination of cultural, economic, and marketing factors. In South America, smoking has often been associated with social gatherings and relaxation. The act of smoking is deeply ingrained in many cultures, and it is common for young people to perceive it as a way to relieve stress, bond with friends, or simply as a means of fitting into adult social circles. Moreover, the tobacco industry has historically invested heavily in marketing and advertising to target consumers, capitalizing on their desire to belong and rebel simultaneously. Brands such as Marlboro and Camel, among others, have established presence in the region, creating a sense of aspiration and allure around their products. Companies in the tobacco industry have long been criticized for their role in promoting smoking, especially to the younger population. Some of the key players in the market include British American Tobacco plc, Scandinavian Tobacco Group, Imperial Tobacco Group plc, The Japan Tobacco Inc., Altria Group, Inc.

According to the research report, “South America Tobacco Product Market Outlook, 2028” published by Bonafide Research, the market is anticipated to add more than USD 9 Billion from 2023 to 2028. The tobacco product market in South America is experiencing a notable resurgence and transformation, driven by several key factors. One of the prominent drivers of this growth is the increasing number of consumers, particularly among the younger demographic. South America, like many regions worldwide, has observed a rise in the consumption of tobacco products among its youth. This surge can be attributed to a range of factors, including evolving social norms, marketing strategies, and the allure of tobacco-related products. The availability of new and diverse options within the tobacco market is a significant catalyst for this growth. South American consumers are now presented with a plethora of choices beyond traditional cigarettes. Electronic cigarettes (e-cigarettes), in particular, have gained immense popularity as an alternative to conventional tobacco products. E-cigarettes are often perceived as a less harmful option due to their reduced exposure to harmful combustion by-products. This perception, along with various flavors and sleek designs, has resonated with a younger and tech-savvy audience. Water pipes, commonly known as hookahs, are also increasingly prevalent in South America. These water pipes offer a social and communal aspect to tobacco consumption, making them appealing to a wide range of consumers. The wide array of flavoured tobacco used in hookahs adds to their allure. Additionally, the introduction of innovative products, such as heat-not-burn devices and smokeless tobacco, has expanded the market even further. These alternatives cater to health-conscious consumers who seek alternatives to traditional smoking methods.

Based on the geography, the market is segmented into countries including Brazil, Argentina, and Columbia; Brazil emerges as the undeniable leader. With its extensive tobacco cultivation and a robust domestic industry, Brazil has long held a prominent position in the global tobacco market. The country is renowned for its high-quality tobacco leaves and has a strong presence in both the domestic and international tobacco product markets. Additionally, Brazil has some of the largest tobacco companies that operate on both national and international scales, contributing significantly to the country's market leadership. Following Brazil, Argentina and Colombia also play pivotal roles in the South American tobacco market, together holding substantial market shares. Argentina is well-regarded for its tobacco production, particularly in the Northern provinces, where the fertile soil and favourable climate conditions have allowed for the cultivation of premium tobacco leaves. The country's tobacco industry encompasses a range of products, from cigarettes to cigars and other tobacco-related goods, catering to both domestic and export markets. Colombia, also maintains a notable presence. The country has a rich history of tobacco cultivation, with regions like Santander and Valle del Cauca being significant contributors to the industry. Colombian tobacco is often used in various tobacco products and is known for its unique flavors.

The South American tobacco market is distinguished by a distinct division of products into different categories, each with unique consumer preferences and consumption habits. Traditionally, traditional cigarettes have dominated this industry and accounted for a sizable portion of the consumption of tobacco products. In many of the nations in the region, smoking cigarettes has deep cultural and social roots, making it the preferred behaviour for tobacco users. But a new trend suggests that things are changing and that next-generation devices may soon be able to take a larger chunk of the market. These cutting-edge substitutes, such heated tobacco devices and electronic cigarettes (e-cigarettes), are becoming more and more well-liked, especially among younger customers who are searching for a choice that appeals to their sense of style and less risk. These next-generation products are appealing because of their wide variety of flavors, sleek appearance, and perceived lower risk as compared to traditional smoking. They signify a substantial change in the tobacco industry, moving away from the conventional combustion-based products. Smokeless tobacco, cigars and cigarillos, and Kretek (cigarettes with clove flavor) continue to have niche markets despite this shift, each serving distinct regional and cultural tastes. The South America tobacco market is evolving, reflecting changing consumer attitudes and regulatory trends, and next-generation products are indeed poised to play a more substantial role, potentially challenging the traditional dominance of cigarettes in the region.

The variety of customer interests and lifestyles in the South American region is reflected in the distribution of tobacco products through a wide range of retail outlets. Specialty shops, hypermarkets/supermarkets, convenience stores, internet platforms, and other outlets are examples of these distribution channels. Specialty stores have historically dominated the market among them. These specialty tobacco stores draw in a steady stream of patrons who are looking for certain brands or distinctive tobacco experiences. They also offer a large selection of products and give specialized customer care. Nonetheless, given that the online market is expected to grow rapidly in the upcoming years, there is a discernible shift in the business. Convenience, increased product options, and competitive pricing have been brought about by the growth of e-commerce platforms, and these features are especially appealing to younger, tech-savvy consumers. The distribution environment is changing as more customers resort to internet channels for their demands related to tobacco products. Online shopping's convenience and ability to make discrete transactions fit in nicely with how consumer preference is changing. The rising internet industry is ready to challenge specialty retailers' dominance and change the way tobacco products are supplied and bought throughout South America, even as they continue to hold a significant market share.

Companies covered in this report:
British American Tobacco plc, Scandinavian Tobacco Group, Imperial Tobacco Group plc, The Japan Tobacco Inc., Altria Group, Inc., Habanos S., ITC Limite, Tabacos Monte Paz

Considered in this report:
• Geography: South America
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report:
• South America Tobacco Product market Outlook with its value and forecast along with its segments
• Country-wise Tobacco Product market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Country covered in the report:
• Brazil
• Argentina
• Columbia

By Product:
• Cigarette
• Smokeless Tobacco
• Cigar and Cigarillos
• Next Generation Products
• Kretek

By Distribution Channel:
• Speciality Store
• Hypermarket/supermarket
• Convenience Stores
• Online
• Others

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience:
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organisations related to the Tobacco Product industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.



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