Tobacco Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 114 firms in the US produce a range of tobacco products including cigarettes, cigars, chewing tobacco, snuff, and pipe tobacco. The tobacco manufacturing industry is engaged in tobacco leaf processing and aging, stemming and redrying, and manufacturing finished cigarettes or other tobacco products. The industry does not include the manufacturing of electronic cigarettes or electronic cigarette vapor liquids.
Regulations and Compliance
Tobacco companies must comply with a multitude of regulations from the Food and Drug Administration (FDA) regarding registration, product listings, labeling requirements, nicotine levels, flavored products, sales, and distribution.
Litigation
Companies are involved in litigation related to their tobacco and nicotine products, often holding the companies responsible for adverse health effects associated with smoking and exposure to environmental tobacco smoke.
Industry size & Structure
A typical tobacco manufacturer operates out of a single location, employs 86 workers, and generates about $350 million annually.
- The tobacco manufacturing industry consists of about 114 companies which employ about 11,700 workers and generate about $47.5 billion annually.
- The industry is highly concentrated with the 4 largest firms representing 91% of industry revenue.
- Large companies include Philip Morris (owned by Altria), Swisher International, and ITG Brands (subsidiary of Imperial Brands). Other major players include Reynolds America and Natural American Spirits (both owned by British American Tobacco), General Cigar Company (subsidiary of Scandinavian Tobacco Group), and JTI USA (subsidiary of Japan Tobacco Group, JT Group).
- The tobacco manufacturing industry is global; large manufacturers often have international operations.
- Leading states for tobacco manufacturing include North Carolina, California, Florida, New York, Texas, and Virginia.
Industry Forecast
Tobacco Manufacturers Industry Growth
Recent Developments
Feb 4, 2025 - FDA Proposes Rule to Lower Nicotine in Cigarettes
- The US Food and Drug Administration proposed a new rule in January 2025 minimizing nicotine levels in cigarettes and other combusted tobacco products, according to Tobacco Reporter. The goal is to make the products minimally or nonaddictive by limiting the nicotine levels to 0.7 milligrams per gram of tobacco. The US would be the first country globally to set such limits. The proposal would apply to cigarettes, cigarette tobacco, roll-your-own tobacco, most cigars, and pipe tobacco. The FDA said the new standard could prevent 48 million US youth and young adults from starting smoking by the year 2100, according to its population health models. The FDA originally announced its intention for the rule in 2018 and is now seeking input on the proposal from the public.
- Producer prices for tobacco manufacturing rose 11.4% in December 2024 year over year, according to the latest data from the Bureau of Labor Statistics. Producer prices for the industry have been on a sharp incline since the COVID-19 pandemic. Cigarette sales increased during the COVID-19 pandemic for the first time in two decades, as some consumers stocked up fearing shortages. Meanwhile, consumer prices for cigarettes were up 7.8% in December 2024 compared to a year ago. Employment by beverage, tobacco, leather, and allied product manufacturers was up 2.1% in December 2024 compared to a year ago.
- E-cigarette unit sales at US retail outlets have grown by 47% from 2019 to 2023, with flavors accounting for more than three-quarters of sales, according to a recent report released by the CDC Foundation and Truth Initiative. According to the report, flavor categories such as fruit, candy, mint, menthol, and desserts made up more than 80% of sales during the period. Sales of disposable e-cigarettes, commonly used by young people, are up more than 500% from 2019 to 2023. The report also noted that 80% of e-cigarettes are on the market illegally and called on retailers to remove all illegal products from store shelves.
- According to Tobacco Reporter, Swedish Match North America is facing a class action lawsuit for allegedly overcharging its US customers for its tobacco-free Zyn nicotine pouches. The lawsuit seeking more than $5 million in damages was filed in November 2024 in a federal court in Richmond, Virginia. The Florida-based plaintiff says that Swedish Match illegally gained monopoly power through activities aimed at eliminating rivals from the market, per the report. A subsidiary of Philip Morris International, Swedish Match has approximately 80% of the market for nicotine pouches. Philip Morris has said the claims are without merit.
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