Tobacco Manufacturers

        Tobacco Manufacturers

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Industry Summary

The 110 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.


Recent Developments

Aug 27, 2025 - USPS Halts Shipping of Unregulated Vapes: Reuters
  • 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.”
  • Indicators measuring the collective mood of US consumers show mixed signals, with consumer confidence levels slightly up and consumer sentiment falling. Consumer confidence levels, an indicator of discretionary expenditures, improved in July 2025, month over month, rising by 2 points, according to the Consumer Confidence Index. Consumer confidence levels have stabilized since May but remain lower than last year’s, according to The Conference Board, which publishes the monthly index. July’s gain can be attributed to consumers over 35 years old and shared across all income groups, except the lowest income group earning below $15K. In addition, the consumer sentiment index from the University of Michigan dropped in August 2025 for the first time in four months. The index fell to 58.6 in preliminary August data from 61.7 in July. Year-ahead inflation expectation results were higher monthly, as consumers convey lingering anxiety about prices amid tariff impacts. The index serves as a predictor of consumer spending as it indicates consumers’ perception of their financial prospects and the broader economy.
  • A recent survey by the Premium Cigar Association showed improvement for manufacturers, with 67% saying they performed better in 2024 compared to 2023, 17% of manufacturers performing the same, and 17% doing worse. The First Quarter 2025 survey also revealed that 51% of retailers said they did better in 2024 compared to 2023, with 29% performing the same and 20% performing worse. Cigar manufacturers were asked to list their top concerns, which included rising costs, competitors over-discounting products, connecting with retailers on a timely and regular basis, finding quality sales help, and tariffs and complexity of different state taxes. Retailers were asked what they would like to communicate with manufacturers to help sell their products, and the most common answers were controlling moderate price increases and shipping, limiting high-end offerings and creating more economy cigars, better education/communication, fixing supply issues, and focusing on core lines and not “what’s new.”
  • 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.

Industry Revenue

Tobacco Manufacturers


Industry Structure

Industry size & Structure

A typical tobacco manufacturer operates out of a single location, employs 107 workers, and generates about $463 million annually.

    • The tobacco manufacturing industry consists of about 110 companies which employ about 11,800 workers and generate about $51 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

                                    Industry Forecast
                                    Tobacco Manufacturers Industry Growth
                                    Source: Vertical IQ and Inforum

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