SpendEdge Forecasts a Spend Growth of over USD 90 Billion for the Tobacco Market
LONDON--(BUSINESS WIRE)--Nov 22, 2019--
SpendEdge, a global procurement market intelligence firm, has announced the release of its Global Tobacco Market - Procurement Intelligence Report.
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Global Tobacco Market Procurement Intelligence Report. (Graphic: Business Wire)
The advent and awareness about NGP alternatives such as tobacco and nicotine products will contribute to the spend growth of this market and will drive the spend momentum at a CAGR of over 2% between 2016-2021. The initiatives taken by large-scale manufacturers to make their products more cost-effective to the proliferating demography of smokers will bring more investments in the tobacco market. A major share of the global tobacco consumption is accredited to 60% of the smoking population in China which is continuing to grow at an exponential rate. The availability of low-cost tobacco products and the relaxation of regulations in Indonesia have catapulted the country to the position of one of the top five tobacco consumption countries worldwide.
However, this spend growth will not be bereft of challenges. Periodic and unplanned changes in regulatory policies governing the global tobacco market will render the procurement complex. Tobacco suppliers will face restrictions to display in-store advertisements and provide special offers and discounts owing to the imposition of monetary policies and a blanket ban.
“ The new set of restrictions such as the introduction of plain packaging of cigarette products is aimed at reducing the influence that suppliers have on smokers,” says SpendEdge procurement analyst A Kowshik.
Want to know what are the price trends that are changing the procurement outlook in the tobacco market? Subscribe to our free procurement platform to get regular and real-time insights into price trends, procurement strategies, supply market scenarios, and many more on this industry.
Things You Need to Know Before Venturing into the Tobacco Market:
- In a bid to curtail people’s penchant towards smoking, governments are imposing higher tax rates on tobacco-based products to restrict the marketing of such products at low rates. This will increase the procurement price in the tobacco market.
- Litigation expense is one of the main cost components as the settlements are not easily predictable with payments required to be structured according to the requirements of law. High fines and penalties in one quarter may affect the operational capability for the remaining production cycle.
- To offset some of the potential rising costs, buyers must employ measures to track and trace the movement of tobacco leaves from growers to processors. Tobacco suppliers must have complete transparency and traceability of the movement of tobacco leaves from growers to processors. This is important as it prevents the use of an illegal set of tobacco leaves for the production of tobacco-based products. Various large-scale tobacco manufacturers have partnered with dealers that manage the upstream activities such as leaf procurement, managing operational workflow, and product traceability. Few suppliers track information such as volume procured and crop loans from individual growers and farmers by issuing them with unique IDs.
Uncontrolled procurement spend and the lack of visibility of the same is hitting the buyer’s business where it hurts the most. Subscribe to our free web-based platform to get instant and real-time insights on the price trends and procurement strategies that will change your procurement outlook.
Some of the key topics covered in this report are:
- Tobacco market demand and supply Snapshot
- Tobacco market demand and supply shift
- Porter’s Five Forces
- PESTLE Analysis
- Tobacco suppliers market highlights
- Tobacco supplier operational capability matrix
- Tobacco supplier cost breakup
- Regional tobacco price trends
- Procurement Best Practices
- Pricing Models- pros and cons
To know the best performing procurement strategies and the regional and global spend dynamics in the tobacco market, Request a free sample of this tobacco market intelligence report.
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INDUSTRY KEYWORD: TOBACCO RETAIL COMMUNICATIONS OTHER COMMUNICATIONS
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PUB: 11/22/2019 11:00 AM/DISC: 11/22/2019 11:00 AM