The nicotine industry is undergoing significant changes as it adapts to evolving consumer preferences and regulatory landscapes. While traditional cigarette smoking continues to decline, new trends are emerging that shape the future of nicotine consumption. Here are the top five trends in nicotine for 2025:
Decreasing prevalence and visibility of the industry
The global prevalence of tobacco use is steadily decreasing, with smoking becoming less accepted and visible in mainstream culture. Cigarette smoking rates have been declining consistently over the past decade, and this trend is expected to continue. By 2035, at least 25 global markets are projected to have smoking rates below 10%, and 35 markets below 15%. Increased regulation, public health campaigns, and the availability of alternative nicotine products drive this decline.
As smoking becomes less visible, it enables further restrictions on tobacco use, creating a cycle that continues to reduce smoking rates.
A broader re-evaluation of nicotine's role, apart from combustible tobacco, could lead to a resurgence of its place in society
Source: Euromonitor International
Consumption polarisation and consumer sensitivities
Despite worldwide economic difficulties, consumers are increasingly split between high-end and budget nicotine products. While premium products remain significant, there is a growing demand for affordable options in categories like heated tobacco and e-vapour. The industry must balance value growth with affordability to meet consumer needs.
Global inflationary pressures and reduced disposable incomes are impacting the nicotine market. Consumers are becoming more sensitive to price changes, and governments are likely to implement tax increases on tobacco and nicotine products. This trend may lead to smokers downgrading their choices and seeking lower-cost alternatives.
Expanding landscape of nicotine consumption
Although cigarettes remain the primary source of nicotine for many, a growing segment of consumers is adopting dual usage and exploring various nicotine delivery methods. The demand for alternatives to cigarettes is rising, driven by health concerns and the desire for convenience.
Technological advances in delivery mechanisms are driving the proliferation of RRPs.
The combined use of cigarettes and RRPs is increasing across various markets
Source: Euromonitor Voice of the Consumer: Nicotine Survey, fielded January to February 2024
In countries like Greece, the UK, and Italy, more individuals are using both cigarettes and e-cigarettes or heated tobacco products than those using only cigarettes.
Regulatory pressures and advancements
The nicotine industry faces significant regulatory pressures that shape its strategic markets and growth prospects. Regulations, including excise policies, have a substantial impact on nicotine consumption. Legislative actions, such as increased taxes, restrictions on flavours, and plain packaging, play a crucial role in decreasing smoking rates and tobacco use.
The industry is also encountering increased scrutiny regarding sustainability, with legislation focusing on minimising environmental impact and adopting more sustainable practices. Additionally, broader regulations beyond tobacco, such as product waste management, affect the industry. Regulatory changes can also fuel the illicit market, as seen with the growth of illicit e-vapour products in response to restrictive regulations.
Beyond nicotine and the next stimulants
Industry participants and consumers are actively seeking effective alternatives to nicotine, particularly tobacco, as their next stimulant. This pursuit involves exploring non-tobacco ingredients, herbal smoking products, and the integration of nicotine with cannabis. As a result, there is a significant surge in experimentation and innovation within the industry.
There is a growing global interest in products that include functional and herbal components, such as adaptogenic herbs, mushrooms, and cannabinoids. Leading tobacco corporations are diversifying their offerings to attract both consumers and investors, with many now engaged in the sale and development of cannabinoid products. The cannabis market, in particular, is experiencing rapid growth and is projected to reach USD61.7 billion by 2028.
Navigating the future of the nicotine industry
The nicotine industry is at a crossroads, with traditional smoking on the decline and new trends shaping the future of nicotine consumption. As the industry adapts to changing consumer preferences and regulatory pressures, the focus shifts towards reduced-risk products, affordability, and innovation in nicotine delivery methods. Understanding these trends is crucial for industry players and regulators to navigate the evolving landscape and effectively meet consumer demand.
Uncover more about the top five trends shaping the nicotine industry in our full report, Top Five Trends in Nicotine. Or read more about the current global landscape for e-vapour products and the rise of the illicit market in our article, Navigating the E-Vapour Market and the Rise of Illicit Products.