Organic tobacco does not contain any harmful chemicals and pesticides and has fewer side-effects as compared to the conventional one. They are available in different forms such as semi processed, chewing, snuff, homogenized, and tobacco extracts.
The global organic tobacco market is estimated to account for US$ 165.2 Mn in terms of value and 14,631 Tonnes in terms of volume by the end of 2019.
Drivers:
An increasing number of smokers around the globe is predominantly propelling the market growth of organic tobacco. According to the U.S. Department of Health & Human Services, in 2018, nearly 14 of every 100 U.S. adults aged 18 years or older (13.7%) smoked cigarettes. Therefore, a growing number of smokers is a major factor augmenting the market growth of organic tobacco over the forecast period.
Rising health-conscious consumers is raising demand for organically farmed tobacco. Moreover, rising awareness regarding organic products due to its various health benefits is projected to augment the market growth of organic tobacco. Organically grown tobacco contains fewer chemicals and harmful products such as fertilizers and pesticides. Thus rising health-conscious consumers is augment the market growth of organic tobacco.
North America region dominated the global organic tobacco market in 2019, accounting for 47.3% share in terms of value, followed by Europe and Asia Pacific, respectively.
Figure 1. Global Organic Tobacco Market, Revenue Share (%), By Region, 2019
Market Restraints
High cost and low yield of organic tobacco as compared to conventional tobacco are projected to hinder the market growth. Organic tobacco is twice the rate as compared to conventional tobacco and around 20-30% less yield is obtained from organic tobacco. Thus the high cost of tobacco is expected to hinder the market growth of organic tobacco.
Adverse effects associated with carbon monoxide, heavy metal, and tar released by organic tobacco as they lead to various chronic disease is expected to limit the market growth of organic tobacco.
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2019 | Market Size in 2019: | US$ 165.2 Mn |
| Historical Data for: | 2016 to 2019 | Forecast Period: | 2020 to 2027 |
| Forecast Period 2020 to 2027 CAGR: | 7.5% | 2027 Value Projection: | US$ 295.7 Mn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Santa Fe Natural Tobacco Company, Hi Brasil Tobacco, Bigaratte & Co., Vape Organics and Mother Earth Tobacco |
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| Growth Drivers: |
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| Restraints & Challenges: |
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Market Opportunities
Increasing use of hookah around the globe is projected to serve major growth opportunities to the market of organic tobacco. It is widely used in the hookah and rising consumption of hookah is expected to foster market growth. Increasing income level of the consumer coupled with the changing lifestyle of the consumer is further expected to propel the market growth of the organic tobacco over the forecast period.
The growing adoption of organic farming among farmers due to growing concern over health due to the use of pesticide residue is projected to provide enormous opportunities. According to the Organic Without Boundaries, in 2017, a total of 69.8 million hectares of land were organically farmed which shows twenty percent growth from 2016 numbers. Thus growing adoption of organic farming practices is anticipated to foster market growth.
Figure 2. Global Organic Tobacco Market – Opportunity Analysis
Market Trends/Key Takeaways
Consumption of organic tobacco products in the form of cigarettes and cigars to quit conventional smoking is a major trend in the market. The rising trend of smokeless tobacco consumption is expected to expand the scope of organic tobacco as they are eco-friendly and smokeless alternatives. All these factors are projected to accelerate the market growth of organic tobacco over the foreseeable timeframe.
Various manufacturers are introducing organic tobacco with low sugar content and this is expected to expand the application of the product. This factor is augmenting the market growth of organic tobacco. Moreover, a growing number of party-goers coupled with the increasing focus of manufacturers to adopt effective marketing and promotional activities to create brand awareness is further expected to fuel market growth.
Regulations:
Regulation on the launch of new products
Under the Family Smoking Prevention and Tobacco Control Act the U.S. Food and Drug Administration (FDA) has authority to regulate the tobacco products. They have the right to decide whether a new product could be introduced in the market.
Global Organic Tobacco Market - Impact of Coronavirus (Covid-19) Pandemic
The covid-19 pandemic has immensely affected organic tobacco market, owing to decreasing demand for tobacco products. The tobacco industry has become standstill due to lockdown. Several countries have banned tobacco sales as a part of their efforts to limit the spread of covid-19 but also as it is considered as a nonessential product. Hence, the pandemic results in declining the sales of tobacco products such as smoking and smokeless.
Competitive Section:
Key players operating in the global organic tobacco market are Santa Fe Natural Tobacco Company, Hi Brasil Tobacco, Bigaratte & Co., Vape Organics and Mother Earth Tobacco
Few Recent Developments
In January 2017, Reynolds American a subsidiary of Santa Fe Natural Tobacco Company announced entry into a merger agreement with British American Tobacco. The goal of this Acquisition is to Create Stronger, Truly Global Tobacco Company with Strong Portfolio of Iconic Brands and Next-Generation Products.
Organic tobacco is processed and grown without using any chemicals or preservatives. These are surrounded with sunflower plants as trap crop for beneficial insects such as bugs. Organic tobacco products are available in various forms such as cigarette and organic flavored tobacco. Organic tobacco products always possess United States Department of Agriculture (USDA) certification.
Market Dynamics
The anti-tobacco activists claim that organic tobacco helps to quit smoking habit, as it does not contain ammonia, pesticides and bleach as that of tobacco is one of the key factor burgeoning growth of market. However, the high cost of organic tobacco is expected to hinder market growth. According to United States, Department of Agriculture (USDA), the average cost of conventional tobacco was US$ 4.11 per kg and that of organic tobacco was US$ 7.67 per kg in 2016, which is restraining the growth of the market.
North America is expected to show a significant growth in global organic tobacco market in terms of revenue share, over the forecast period owing to growing consumer preference towards organic tobacco products instead of quitting tobacco completely is fueling growth of the market. This is also attributed to increasing smoking population. According to Centers for Disease Control and Prevention (CDC), nearly 15 of every 100 U.S. adults smoked cigarettes and accounted for 36.5 million adult cigarette smoking population in U.S. in 2015. Furthermore, companies in North America are engaged in helping farmers to grow organic tobacco. Santa Fe Natural Tobacco Company (SFNTC), promotes sustainable farming and provide US$ 190,000 as fund to farmers to grow wheat in rotation with organic tobacco in North Carolina in 2011.
Key features of the study:
Detailed Segmentation:
“*” marked represents similar segmentation in other categories in the respective
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