Organic tobacco is less harmful than regular tobacco and is cultivated without the use of any chemicals and fertilizers. They have organically certified tobacco since they are free from any pesticide residue. They are used for smoking and smokless applications. Smoking includes cigars and cigarillos, cigarettes, and pipes whereas smokeless tobacco comprises tobacco, snuff, and vapor.
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:
Organic tobacco provides benefits to the farmers due to its sale at a premium price to the manufacturer which is projected to fuel the market growth of organic tobacco. According to the Coherent Market Insights analysis, organic tobacco growers earn more profit over conventional tobacco growers; around twice the amount of a regular crop. Organic farmers can earn up to US$ 4.5 per pound, as compared to US$ 2.2 for traditional tobacco.
Market Opportunities
Increasing launch of new flavors in organic tobacco by manufacturers is projected to offer lucrative opportunities to the market of organic tobacco. For instance, in January 2018, Japan Tobacco Inc. announced that it has launched "Natural American Spirit Organic Mint" nationwide in late February 2018. The main features of the Natural American Spirit brand are "100% additive-free tobacco leaf," the use of only carefully selected and high-quality tobacco leaf" and "densely packed tobacco leaf.
Market Restraints
Strict rules and regulations for eliminating tobacco cultivation and consumption are expected to restrict the market growth. For example, USDA has made it mandatory for farmers to obtain a certification for cultivating organic tobacco. Moreover, the government has imposed heavy taxation on tobacco products, which has led to reducing tobacco consumption in recent years.
Key Takeaways:
Asia Pacific accounted for a significant share of in 2019. This is attributed to its increasing consumption of smoking organic tobacco products such as cigarettes, cigars and cigarillos. According to World Health Organization (WHO), India accounted for 84% of the world’s consumption of smokeless tobacco in 2015. Furthermore, the smoke from organic tobacco is considered as environmentally friendly, which is propelling growth of market.
Among applications, smoking dominated the global organic tobacco market in 2019 and was valued at US$ 12,772 Mn in 2019. The increasing consumption of cigarettes in emerging economies such as China and India, is expected to propel the growth of this segment. According to The World Health Organization, nearly 5.6 trillion cigarettes were consumed in 2013. China and Russia are the countries consuming cigarette owing to high smoking prevalence and high smoking intensity.