Kicking the habit: Rising excise taxes and declining smoking rates will singe wholesalers

The Cigarette and Tobacco Products Wholesaling industry has sustained sales over the past five years despite growing regulatory, economic and operational challenges. Due in part to revitalizing demand for smokeless tobacco products and higher per-unit prices on cigarettes, as well as higher levels of consumer spending and disposable income, industry revenue has increased over the five years to 2017. However, revenue is expected to decline over the next five years, as demand for smokeless tobacco and e-cigarettes is also expected to decelerate and cigarette sales volume continue to decline. Furthermore, expected hikes in federal and state excise taxes will also contribute to revenue declines over the five years to 2022...purchase to read more.

Industry Statistics & Market Size
Revenue
$128bn
Annual Growth 12-17
0.3%
Forecast Growth 17-22
Profit
Employment
49,982
Businesses
3,500

Industry Threats & Opportunities

  • Cigarettes and other tobacco products have experienced intense regulatory scrutiny from both the government and the public
  • Wholesale distributors of tobacco products are pressured to mark up their prices as low as possible
  • Several major tobacco product manufacturers have their own wholesale distribution operations
  • Industry Report - Industry Locations Chapter

    The spread of industry establishments generally follows the spread of upstream tobacco product manufacturers and downstream retailers. Based on data from the US Census Bureau, tobacco product wholesalers are heavily concentrated in the Southeast, Mid-Atlantic and the Great Lakes regions. A large share of cigarette manufacturing establishments is also located in these regions. The Southeast region accounts for the largest share of industry establishments, with Florida and North Carolina being most significant. Likewise, almost two-thirds of tobacco product manufacturing establishments are also based in this region, and the region is major tobacco growing area. The region is also home to a third of all convenience stores, a major downstream market for this industry's products. Ove...purchase to read more.

    Additional Insights for the Cigarette & Tobacco Products Wholesaling Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Cigarette & Tobacco Products Wholesaling Industry are

  • Economies of scale
  • Having relationships with key markets
  • Automation - reduces costs, particularly those associated with labor
  • IBISWorld analysts also discuss how external factors such as Excise tax on tobacco products and Percentage of smokers in the Cigarette & Tobacco Products Wholesaling industry impact industry performance..

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    What's in this report

    What is the Cigarette & Tobacco Products Wholesaling Industry?

    Companies within this industry acquire packaged cigarettes and other tobacco products from manufacturers and sell the goods to retailers such as convenience stores, supermarkets, specialized tobacco stores, street vendors or internet tobacco retailers. They may also sell to other wholesalers. The sales and distribution offices of tobacco product manufacturers are included in this industry.

    Industry Products
  • Menthol cigarettes
  • Regular cigarettes
  • Cigars
  • Other tobacco products
  • Non-tobacco products
  • Industry Activities
  • Distributing cigarettes
  • Distributing cigars
  • Distributing loose and pipe tobacco
  • Distributing smokeless tobacco products such as snuff or snus
  • Distributing modern tobacco products such as e-cigarettes or vaporizers
  • Distributing accessories such as lighters, hookahs (water pipes) or ashtrays
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Excise tax on tobacco products
  • Percentage of smokers
  • Regulation for the Cigarette and Tobacco Production industry
  • Consumer spending

  • Current Performance
  • Tobacco regulation, excise taxes and demand for industry products
  • Industry structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Competition and threats
  • Smoking rates on the way down
  • Table: Cigarette & Tobacco Products Wholesaling Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cigarette & Tobacco Products Wholesaling Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Supermarkets & Grocery Stores
  • Convenience Stores
  • Beer, Wine & Liquor Stores
  • Pharmacies & Drug Stores
  • Gas Stations with Convenience Stores
  • Small Specialty Retail Stores
  • Non-Hotel Casinos
  • Golf Courses & Country Clubs
  • Bars & Nightclubs

  • Key Selling Industries
  • Cigarette & Tobacco Manufacturing

  • Products & Services
  • Regular cigarettes
  • Menthol cigarettes
  • Non-tobacco products
  • Other tobacco products
  • Cigars
  • Chart: Cigarette & Tobacco Products Wholesaling Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Other Wholesalers
  • Convenience stores and gas stations
  • Supermarkets, pharmacies and grocery stores
  • Other retail channels
  • Chart: Major Market Segmentation for the Cigarette & Tobacco Products Wholesaling Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesState or local excise taxesOther
  • Chart: Cost Structure Benchmarking – Sector vs Cigarette & Tobacco Products Wholesaling

  • Basis of Competition
  • Internal Competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cigarette & Tobacco Products Wholesaling Industry

  • Industry Globalization
    McLane Company Inc., Altria Group Inc., Reynolds American Inc., Core-Mark Holding Company Inc.,
  • Table: McLane Company Inc. - financial performance
  • Table: Altria Group Inc. - financial performance
  • Table: Reynolds American Inc. - financial performance
  • Table: Core-Mark Holding Company Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Cigarette & Tobacco Products Wholesaling Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Cigarette & Tobacco Products Wholesaling Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • percentage of smokers (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Broadline Distributor
  • Wholesalers that distribute a wide range of grocery and nonfood items; tobacco products generate only a small and incidental share of these wholesalers' revenue.
  • Candy And Tobacco Distributor
  • Wholesalers that primarily distribute tobacco products and confectioneries (e.g. candy and snacks); these companies generate only a small share of revenue from general grocery and nonfood items.
  • Cigarillo
  • A small and narrow cigar that is often wrapped in leaf tobacco (not paper).
  • E-Cigarette
  • A battery-powered electronic device that simulates the act of smoking cigarettes by producing water vapor (which resembles smoke), while delivering nicotine via the liquid solution when heated.
  • Manufacturers' Sales Branches And Offices (Msbo)
  • The sales and distribution divisions of large tobacco manufacturers, which sell directly to large, national wholesalers such as McLane Co. and Core-Mark.
  • Merchant Wholesaler
  • Traditional distributors that purchase products from upstream suppliers for distribution to retailers and other downstream markets.
  • Snus
  • A smokeless tobacco product that is placed under the lip for absorption through the gums rather than being inhaled or ingested.
  • Wholesale Bypass
  • A growing trend whereby producers supply goods directly to retailers and end users using their own distribution channels, rather than relying on intermediary merchant wholesalers.
  • What Our Customers Say

    Why buy this report?

    The Cigarette & Tobacco Products Wholesaling Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Cigarette & Tobacco Products Wholesaling:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cigarette & Tobacco Products Wholesaling market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Cigarette & Tobacco Products Wholesaling, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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