Consumer Cravings: Understanding Preferences in the Heat-Not-Burn Market

Heat-Not-Burn Industry Overview

The global Heat-Not-Burn Market was worth $19.95 billion in 2023 and is forecast to expand at a CAGR of 35.9% from 2024 to 2030. The primary drivers of this market are the ongoing decrease in traditional cigarette consumption and the increasing preference for alternatives like reduced-risk products (RRPs). Growing awareness about the elevated risk of premature death and chronic diseases such as lung cancer has led many consumers to switch to substitutes and change their tobacco consumption habits. This shift is expected to significantly boost demand in the heat-not-burn market during the forecast period.

The World Health Organization (WHO) states that tobacco use leads to the death of nearly half of its users who do not quit. For example, smoking and exposure to secondhand smoke cause over 480,000 deaths annually in the U.S. This has considerably heightened awareness among users in recent times. With increasing consciousness regarding consumption methods and awareness campaigns by governments and various other organizations, the demand for heat-not-burn products is growing at a substantial rate.

Detailed Segmentation:

• Component Insights

The sticks segment dominated the market and accounted for a revenue share of 29.0% in 2023. The product positioning strategy of marketing the sticks as premium heat-not-burn offering primarily drives the growth of this segment. These products are also characterized with numerous flavors and additives which attracts greater number of consumers with different preferences in terms of flavors or tastes. Entry of various key market players from traditional tobacco products industry that offer innovation backed newly developed products is expected to fuel growth for this segment during forecast period.

• Distribution Channel Insights

The online distribution channel is anticipated to experience a significant CAGR over the forecast period. Advantages provided by the online shopping platforms such as ease of access, competitive prices, additional discount offers, and a larger range of products have fueled growth of this segment. In addition, the added services associated with the online shopping such as doorstep delivery, return & refund policy, multiple payment alternatives, and detailed product reviews mentioned by the previous buyers have encouraged large number of customers in recent years. Discretion and privacy have also contributed to the growth of this segment.

• Regional Insights

Asia Pacific heat-not-burn market dominated the global market with a revenue share of 52.5% in 2023. The changing lifestyles and growing disposable income levels in countries such as India, China and Japan are contributing to the increased interest in heat-not-burn products. An increase in availability of the heat-not-burn products, enhanced accessibility through online portals, entry of various brands in the region that offer heat-not-burn products are some of the factors that are expected to generate greater growth for this regional market during forecast period. Large number of existing consumers of smoke-based tobacco products are actively seeking smoke - free alternatives, which in turn has developed lucrative opportunities for the heat-not-burn market in the region.

Gather more insights about the market drivers, restraints, and growth of the Heat-Not-Burn Market

Key Companies & Market Share Insights

Some of the key companies in the heat-not-burn market include Altria Group, Inc., BAT, Firefly Vapor (SLANG WORLDWIDE), Imperial Brands plc, Japan Tobacco Inc., and others. Key players in the industry implement various business strategies such as introducing new products, expanding capacities, securing endorsements, marketing initiatives, and mergers & acquisitions to attract a wide customer base.

• Philip Morris Products S.A. (PMI), an international tobacco company, specializes in smoke-free products that are better alternatives to cigarette smoking. PMI offers its flagship IQOS heat-not-burn tobacco product portfolio, consisting of IQOS ILUMA, IQOS ORIGINALS, and others; E-vapor products, including VEEV ONE and VEEV NOW*; and oral smoke-less products such as ZYN nicotine pouches.
• British American Tobacco (BAT) is a multinational tobacco company that specializes in developing and commercializing heat-not-burn tobacco products. The company provides its flagship glo tobacco-heated brand, which includes glo Hyper Pro and Hyper+ models, and vapor products, including Vuse and Velo, a global brand of oral nicotine pouches.

Key Heat-Not-Burn Companies:

The following are the leading companies in the heat-not-burn market. These companies collectively hold the largest market share and dictate industry trends.

• Altria Group, Inc.
• BAT
• Firefly Vapor (Slang Worldwide)
• Imperial Brands plc
• Japan Tobacco Inc.
• KT&G Corp.
• PAX Labs, Inc.
• Philip Morris Products S.A.
• Shenzhen Yukan Technology Co., Ltd. (iuoc2.com)
• Vapor Tobacco Manufacturing LLC

Order a free sample PDF of the Market Intelligence Study, published by Grand View Research.

Recent Developments

• In January 2024, BAT, one of the major market participants in the heat-not-burn industry, introduced a new product in the heating devices category from the glo range. The glo is a smart alternative provided by the company, which entails heating the tobacco and not burning it, resulting in fewer emissions of toxicants found in smoke-based products.
  
  
• In August 2024, the Japan Tobacco Inc., announced that it had agreed to acquire Vector Group Ltd. (VGR), the fourth largest tobacco company in the U.S., for approximately USD 2.4 billion. The acquisition, which is expected to be completed by the end of JT's current fiscal year, will significantly expand JT's presence in the U.S. market and add a growing and historically profitable business to its portfolio.