Survive On Tobacco Market-Research On Altria Group

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The Tobacco industry has been living in a harsh environment for many years now. Harsh criticism around advertising practices and the detrimental health impact of smoking cigarettes have set the Cigarettes sector into a negative light. All this has come at the same time as increased governmental sin taxes increase the price of their products. During the past few years, the number of smokers within the U.S. has decreased around 2% each year. With so many negative factors influencing the market, the sector has tried many different strategies to maintain profitability. Lately, price hikes have been the main strategy for companies like Altria Group Inc. looking to squeeze money out of a dwindling, yet dedicated consumer group.

One of the latest revenue strategies employed within the sector is the rollout of various new smokeless tobacco products. Marketed as a healthier alternative to smoking for consumers looking to quit, companies within the sector hope that smokeless products will hold onto their consumers for just a little longer before they lose them from the market completely. The smokeless tobacco market has grown between 6% and 7% during past years and grew 9.2% last quarter. This new smoking trend bodes well for Star Scientific Inc. which has been making its case for healthy smoking. However, the company has to put up with larger and financially well-suited rivals.

Elsewhere in the world, emerging markets are proving to be a place of respite for the hurting cigarette companies. As consumers in developing countries gain more access to discretionary capital, they are beginning to smoke more often and to smoke branded products. These markets could serve to sustain the industry while the U.S. domestic market falters.