Cigarettes are losing their hold on the nicotine fix

livemint.com:

Pretty soon, Americans who crave a nicotine hit will be more likely to reach for a vape or an oral nicotine pouch than a cigarette. Few tobacco companies look ready for this milestone. According to data from Marlboro maker Altria, cigarettes’ share of the U.S.

nicotine industry fell to 60% last year, down from 80% in 2018. Smokers are switching to smoke-free products such as vapes in higher numbers than expected. If the trend continues, it will only take another three years for cigarettes’ share to slip below 50%.

In another bearish sign for cigarettes, British American Tobacco recently announced a £27.3 billion noncash impairment of some of its U.S. tobacco brands, equivalent to $34.6 billion at current exchange rates. The move reduced the book value of brands such as Camel and Newport by a third, in an admission that their long-term prospects have deteriorated since BAT took control of their maker Reynolds American in 2017.

In 2023, the number of cigarettes sold in the U.S. shrank by around 8%, double the long-term average. There is a debate within the tobacco industry about what is causing volumes to contract so fast and whether the trend is short-term.

Tobacco use has been out of kilter for a few years: It was unusually high during the pandemic when people were stuck at home and smoked more, but has been lower than normal recently. Inflation and price increases may have forced some smokers to cut back on cigarettes, or to quit altogether. Both BAT and Altria announced new price increases that took effect in January, after raising them three and four times respectively in 2023.