Organic Tobacco Market Positive long-term growth outlook 2018-2025
North America is expected to be the largest market in terms of revenue share, over the forecast period owing to growing consumer preference towards organic tobacco products instead of quitting tobacco completely is fueling growth of the market. This is also attributed to increasing smoking population. According to Centers for Disease Control and Prevention (CDC), nearly 15 of every 100 U.S. adults smoked cigarettes and accounted for 36.5 million adult cigarette smoking population in U.S. in 2015. Furthermore, companies in North America are engaged in helping farmers to grow organic tobacco. Santa Fe Natural Tobacco Company (SFNTC), promotes sustainable farming and provide US$ 190,000 as fund to farmers to grow wheat in rotation with organic tobacco in North Carolina in 2011.
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Asia Pacific is the fastest growing region in global organic tobacco due to its increasing consumption and its applications such as cigarettes, cigars and cigarillos. According to World Health Organization (WHO), India accounted for 84% of the world’s consumption of smokeless tobacco in 2015. Furthermore, the smoke from organic tobacco is considered as environmentally friendly, which is propelling growth of market.
Additionally, the manufacturers in North America are focused on launching new organic tobacco products which are less harmful as compared to tobacco products. For instance, in October 2017, Japan Tobacco Inc. launched Natural American Spirit Organic Leaf One which is an additive-free tobacco leaf and was organically cultivated, accredited by USDA with its strict standards.
Organic tobacco manufacturers are adopting various strategies such as partnerships and research & development, to sustain their market positions. For instance, in 2015, Japan Tobacco Inc., acquired Natural American Spirit brand name, which includes Reynolds American Inc. (RAI)’s nine subsidiaries
Organic tobacco is processed and grown without using any chemicals or preservatives. These are surrounded with sunflower plants as trap crop for beneficial insects such as bugs. Organic tobacco products are available in various forms such as cigarette and organic flavored tobacco. The anti-tobacco activists claim that organic tobacco helps to quit smoking habit, as it does not contain ammonia, pesticides and bleach as that of tobacco is one of the key factor burgeoning growth of market. Organic tobacco products always possess United States Department of Agriculture (USDA) certification.
However, the high cost of organic tobacco is expected to hinder market growth. According to United States, Department of Agriculture (USDA), the average cost of conventional tobacco was US$ 4.11 per kg and that of organic tobacco was US$ 7.67 per kg in 2016, which is restraining the growth of the market. Furthermore, organic tobacco contains harmful substances such as carbon monoxide, heavy metal and tar leading to diseases such as chronic obstructive pulmonary disease (COPD), which may have negative impact on the growth of this market. According to Centers for Disease Control and Prevention (CDC), in America, nearly 15.7 million was diagnosed with COPD in 2014.
Among applications, cigarettes segment accounted for the largest market share in terms of revenue. The increasing consumption of cigarettes in emerging economies such as China and India, is expected to propel the growth of this segment. According to The World Health Organization, nearly 5.6 trillion cigarettes were consumed in 2013. China and Russia are the countries consuming cigarette owing to high smoking prevalence and high smoking intensity.
Some of the major market players operating in the global organic tobacco market include Reynolds American, Inc., Mother Earth Tobacco, Seke S.A., Vape Organics, Hestia Tobacco LLC, R. J., and Quinnington Organic Tobacco Company Pty.
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