Market for Cigars
Swedish Match maintains a strong presence with its machine made cigars in the US, especially within the natural leaf segment where the Company has the leading position.
Swedish Match's portfolio of products within machine made cigars is one of the broadest portfolios on the US market with flavored, natural, and sweet varieties available under well-known mass market brands such as Game, White Owl, Jackpot, and Garcia y Vega.
Market and highlights
The US machine made mass market cigar category has experienced significant growth over the past several years, but in 2019, the market is estimated by Swedish Match to have declined slightly in volume terms and amounted to approximately 7.5 billion cigars excluding little cigars. The category volume decline was driven by the homogenized tobacco leaf (HTL) segment, and in particular for low priced flavored HTL cigars. The natural leaf segment continued to demonstrate growth. Swedish Match cigar volumes were down less than 1 percent compared to the prior year. During the year, the market remained highly competitive. Swedish Match estimates that the Company’s share of market was approximately 22 percent in 2019. Swedish Match participates in both HTL, which is the largest segment, and in natural leaf, a smaller but growing segment in which Swedish Match holds the leading market position. Within the natural leaf segment, rolled leaf cigars have experienced rapid growth.
The volume growth for Game and Garcia y Vega natural leaf cigars was particularly strong, and was a major contributing factor for increased sales and operating profit. The demand for the Company’s rolled leaf cigars continued to be strong. While Swedish Match’s rolled leaf volumes increased during the year, tightened tobacco supplies due to the high demand limited the volume growth of rolled leaf cigars. However, the Company made significant progress throughout the year in easing these constraints. Swedish Match’s HTL volumes declined in 2019.