Tobacco Manufacturers NAICS 312230

Dec 29, 2025 - Faster Growth Forecast

• The US tobacco manufacturers industry is projected to grow at a CAGR of 6.16% between 2025 and 2029, faster than the overall economy's anticipated growth, according to an updated forecast from Inforum and the Interindustry Economic Research Fund, Inc. Consumer sentiment is expected to improve in the forecast period, which bodes well for the nondurable goods manufacturing industries including tobacco manufacturers. A factor that may curb consumer spending is substantially higher tariffs on consumer goods, which may be painful for households. The forecast noted that a tighter immigration policy could limit the expansion of the labor supply and job growth for nondurable goods manufacturing industries. However, labor productivity could still improve due to new technologies such as AI and 3-D printing as well as adjustments forced by the pandemic.
• Tobacco manufacturers move into 2026 against a backdrop of softening consumer sentiment, as both major confidence measures weakened in December. The University of Michigan Index of Consumer Sentiment edged up to 52.9 but remained nearly 30% below 2024 levels, with durable goods buying conditions declining again and 63% of consumers expecting unemployment to rise. The Conference Board Consumer Confidence Index fell to 89.1, driven by a 9.5 point drop in the Present Situation Index, while the Expectations Index stayed at a recession signaling 70.7 for the 11th straight month. The conditions indicate consumers are prioritizing routine, lower cost purchases over big ticket discretionary spending. For tobacco manufacturers, the environment may support steadier baseline demand even as broader economic uncertainty weighs on overall confidence. Easing inflation and improving expectations for future finances offer some stabilization heading into 2026, though job and income concerns will continue to influence purchasing behavior.

• According to AZPM, Arizona’s new law raising the minimum age to buy or possess tobacco products from 18 to 21 brings the state into compliance with federal regulations enacted in 2019. For tobacco manufacturers, this new law, effective in September 2025, reinforces the need for age-restricted marketing and distribution strategies across all product categories, including cigarettes, cigars, smokeless tobacco, and vaping devices. The law introduces stricter penalties for retailers, making compliance essential throughout the supply chain. While the military exemption exists, enforcement remains limited, minimizing its market impact. Manufacturers should anticipate reduced youth access and potential shifts in demand in Arizona, particularly for flavored and vape products, which are popular among younger consumers. This regulatory alignment may also influence packaging, labeling, and retailer education efforts to ensure consistent enforcement and avoid liability.
• According to a Reuters report, the United States Postal Service (USPS) has cracked down on distributors of unregulated vapes using its services for business shipments, considered a positive development for US tobacco makers. Letters from the USPS to US-based Demand Vape blocked the company from using its services after being alerted to the illicit shipments by the New York City Law Department. Unregulated vapes do not have authorization from the US FDA to be legally sold in the US. Per the report, “USPS' action stands to benefit tobacco giants including Altria and British American Tobacco, which have for years battled against unregulated vapes, mostly from China.” Demand Vape is contesting the revocation, saying the company operates in a “regulatory grey zone.” The USPS is restricted from mailing vapes directly to consumers under a 2021 law, with a limited exception for domestic shipments between businesses with a “mailing exception.”