10.6 Market share and brand share

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British American Tobacco Australia was the clear market leader in 2009–10, with 41.7% of tobacco sales in the grocery market and 55% in the convenience sector. Philip Morris ranked second, followed by Imperial, and Stuart Alexander had a small slice (0.4%) of the convenience sector (Table 10.6.1).1,2

Table 10.6.1
Market share by retail sector, Australian tobacco companies, 2009–10

Company

Retail sector % market share

 


Grocery/supermarket

Convenience retailers

BATA

41.7

55

Philip Morris

40.9

32

Imperial

17.4

12.1

Stuart Alexander

n/a

0.4

Sources: Retail World1 and Convenience and Impulse Retailing2

10.6.1 Market share by brand: cigarettes

The Australian cigarette market has a number of differentiating features including different brand, variations on flavour or blend, pack size, and price. Market share can be assessed either by looking at sales figures (from various industry sources) or at the proportions of smokers who regularly smoke various sorts of products (from surveys of smokers).

10.6.1.1 Sales figures relevant to market share

In broad terms, the cigarette market is broken into three main price brackets: 'value' for the price conscious smoker, 'mainstream' for the middle price range, and 'premium' for the higher end of the market. Table 10.6.2 shows the top five brands, by price category, ranked by share of total cigarette sales value in Australian grocery stores in 2010. It shows that in the supermarket and grocery sector, value brands are the most important segment in terms of percentage of cigarettes sold by value, occupying about 46% of market share based on % value of sales ($2.2 billion of the $4.77 billion in sales). Mainstream brands account for over one-third (37%) of the market, and the most expensive, premium brands account for about 16% of the market.

Table 10.6.2
Top five cigarette brands at grocery retail by price category, 2010

Category: Value
($2.2 Billion – 5.2 billion sticks)
$0.42/stick

Category: Mainstream
($1.8 billion – 3.9 billion sticks)
$0.46/stick

Category: Premium
($770.8 million – 1.5 billion sticks)
$0.51/stick

Brand

% value share

Brand

% value share

Brand

% value share

Longbeach

40.5

Winfield

53.0

Benson and Hedges

50.0

Horizon

23.3

Peter Jackson

36.4

Dunhill

21.0

Holiday

11.9

Alpine

7.3

Marlboro

12.4

Choice

7.6

Escort

3.3

Peter Stuyvesant

11.3

Brandon

3.9

n/a

n/a

Kent

.5

Source: Retail World1

Although British American Tobacco Australia is overall market leader in the grocery sector it does not lead in all segments of the market when examined by price positioning and pack size. Philip Morris International is the company leader in the value category, with a 48.6% value share, followed by Imperial Tobacco Australia with 31.3% and British American Tobacco Australia at 20.1%. In the mainstream price category British American Tobacco Australia is the frontrunner, with 53.0% share trailed by Philip Morris International with 42.7% and Imperial Tobacco Australia with only 3.3%. In the lucrative premium price category, British American Tobacco Australia dominates with a 75.3% share with Philip Morris International and Imperial Tobacco Australia each taking about a 12% share.1

At convenience retail outlets, British American Tobacco Australia clearly dominates with the popularity of Winfield, Dunhill and Benson & Hedges making up six of the top 10 brand variants sold. British American Tobacco Australia is followed by Philip Morris, with Peter Jackson and Longbeach making up the remaining four of the top 10. Imperial Tobacco Australia does not have a brand variant in the top 10, and is represented much lower in the rankings, with Horizon Blue (number 35) and Peter Stuyvesant Filter (number 36).2 The most popular pack size is 25s, followed by 30s. See Table 10.6.3 for details on brands sold through convenience retailers.

Table 10.6.3
Top 10 cigarette brands and variants sold by convenience stores ranked by value % share, 2009

Rank

Brand

Pack size

Manufacturer

1

Winfield Blue

25

BATA

2

Winfield Gold

25

BATA

3

Peter Jackson Rich

30

PMI

4

Benson & Hedges Smoooth

25

BATA

5

Dunhill Distinct

25

BATA

6

Winfield Sky Blue

25

BATA

7

Peter Jackson Original

30

PMI

8

Winfield Blue

20

BATA

9

Longbeach Rich

40

PMI

10

Longbeach Original

40

PMI

BATA = British American Tobacco Australia, PMI = Philip Morris International

Source: Convenience and Impulse Retailing2

10.6.1.2 Survey data on brand preferences

While data on brand preferences among adults has been collected from surveys in Victoria and South Australia, neither the Australian Bureau of Statistics Health Survey or the Australian Institute of Health and Welfare's National Drug Strategy Household Survey have asked about brand preferences, and so only limited data are available at the national level.i

10.6.1.3 Australian adult smokers

Data from the Australian arm of the International Tobacco Control policy evaluation study from 2010 show a pattern of use similar to that evident in the sales data tabulated above, with Winfield, Longbeach, Peter Jackson, Horizon and Holiday the brands most preferred by Australian adult smokers.

Table 10.6.4
Percentage of adults smoking each brand in each pack size, 2010 Australian smokers 18+

 

20

25

30

35

40

50

Brand%

Winfield

11.0

89.0

0.0

0.0

0.0

0.0

18.6

Longbeach

11.2

0.0

24.5

0.0

64.3

0.0

16.7

Peter Jackson

9.9

7.7

81.3

1.1

0.0

0.0

15.5

Horizon

2.5

0.0

24.1

0.0

2.5

70.9

13.5

Benson and Hedges

5.7

92.5

1.9

0.0

0.0

0.0

9.0

Holiday

2.6

2.6

21.1

0.0

0.0

73.7

12.9

Alpine

0.0

100

0.0

0.0

0.0

0.0

5.1

Dunhill

10.3

86.2

3.4

0.0

0.0

0.0

4.9

Marlboro

73.3

26.7

0.0

0.0

0.0

0.0

2.6

Escort

28.6

28.6

0.0

42.9

0.0

0.0

1.2

Size %

9.4

36.8

23.0

0.7

11.1

19.1

 


Source: 2010 International Tobacco Control Policy Evaluation Study, n =587, unpublished data

10.6.1.4 Australian secondary school students

National surveys of smoking prevalence and behaviours among Australian secondary school pupils have included questions about brands smoked. Table 10.6.5 shows the cigarette brands most commonly smoked by school students in 2008.3 Brand preference among school-aged smokers is broadly similar to that indicated by the total market share surveys shown in the preceding tables. In 2008, Winfield (42%) was the most popular cigarette brand among young smokers. Peter Jackson and Longbeach were both smoked by 13% of current young smokers. Since it is illegal in Australia to sell cigarettes to children under the age of 18, under-age smokers are more likely to procure cigarettes from friends or the home, so brands usually smoked are likely to reflect the preferences of the older smokers around them. Other factors known to influence choice of brand among young people include price and marketing.

Table 10.6.5
Preferred brands by Australian secondary school students who smoked in the past week*† , 20083

 

Age

 

12–15 year olds

16–17 year olds

Total

Brand

Male
(%)

Female
(%)

Total
(%)

Male
(%)

Female
(%)

Total
(%)

Male
(%)

Female
(%)

Total
(%)

Winfield

39.1

40.9

40.1

46.8

42.1

43.9

42.6

41.5

42.0

Peter Jackson

17.8

15.4

16.5

9.1

10.2

9.7

13.3

12.9

13.1

Longbeach

16.8

17.7

17.3

7.3

11.1

9.2

11.9

14.5

13.3

Horizon

5.3

7.3

6.4

4.2

4.2

4.2

4.7

5.8

5.3

Benson & Hedges

2.8

3.6

3.2

9.9

10.8

10.4

6.5

7.1

6.8

Holiday

5.7

2.5

3.9

1.3

1.6

1.4

3.4

2.0

2.7

Dunhill

2.4

3.4

2.9

2.9

4.1

3.5

2.6

3.7

3.2

Marlboro

2.8

1.7

2.2

2.9

5.4

4.2

2.8

3.5

3.2

Escort

1.8

1.5

1.6

1.3

1.0

1.1

1.6

1.2

1.4

Alpine

1.0

1.3

1.2

0.0

0.7

0.4

0.5

1.0

0.8

Percentages of total in each age and gender category.

* Percentages exclude responses from students who gave more than one brand

† Percentages do not add to 100 as only the most frequent responses are listed

Cigarettes were most commonly obtained from packets of 25 (40% of all current youth smokers), followed by packets of 20 (29%) and 30 (16%). Among 12–15 year olds, a similar proportion of current smokers obtained cigarettes from packs of 20 (31%) and packs of 25 (31%). Among 16–17 year olds, fewer current smokers used packs of 20 (26%) than packs of 25 (48%). See Table 10.6.6.

Table 10.6.6
Percentage of current smokers obtaining their last cigarette from different pack sizes, Australia, 20083

 

Age

 

12–15 year olds

16–17 year olds

Total

Pack size

Male
(%)

Female
(%)

Total
(%)

Male
(%)

Female
(%)

Total
(%)

Male
(%)

Female
(%)

Total
(%)

20

31.5

31.2

31.3

26.3

26.4

26.4

28.9

28.9

28.9

25

32.1

30.2

31.1

50.2

46.5

48.3

41.3

37.8

39.5

30

12.9

21.5

17.7

11.8

16.9

14.4

12.3

19.4

16.1

35

2.7

2.3

2.5

1.2

1.0

1.1

1.9

1.7

1.8

40

14.1

11.4

12.6

6.5

7.9

7.2

10.2

9.7

10.0

50

11.0

7.8

9.2

8.6

4.1

6.4

9.8

6.1

7.8

10.6.2 Market share by brand: roll-your-own tobacco

Imperial Tobacco Australia accounted for a 62% volume share in the roll-your-own market in 2009.4 In 2010, at convenience retailers, Imperial Tobacco Australia was also the clear market leader in the roll-your-own category, well ahead of British American Tobacco Australia. Philip Morris has only a minor interest in the roll-your-own market. See Table 10.6.7. According to the trade publication, Convenience and Impulse Retailing, roll-your-own has been in continuous growth since 2000 and has accelerated in popularity since 2007 due to the price pressures felt by consumers. The April 2010 25% tobacco excise increase further fuelled roll-your-own market growth. According to 2010 Aztec data, the roll-your-own category achieved a volume growth of 5.8% in the past 12 months while tailor-made cigarettes declined by –5.8%.5 According to Aztec, tailor-made cigarettes represent 95.75% of sales, roll-your-own represent 3.55% and cigars represent 0.7% of the tobacco category at convenience outlets.6

Table 10.6.7
Top 10 roll-your-own tobacco brands, representing 84.2% of total sales of roll-your-own sold through convenience retailers

Brand/product

Manufacturer

Champion Tobacco Ruby 30 g

ITA

Champion Tobacco Ruby 50 g

ITA

Port Royal Tobacco Rum&Wine 50 g

BATA

Winfield Reg Tobacco Blue 30 g

BATA

Winfield Reg Tobacco Gold 30 g

BATA

Winfield Reg Tobacco Blue 50 g

BATA

White Ox Tobacco 30 g

ITA

Winfield Reg Tobacco Gold 50 g

BATA

White Ox Tobacco 50 g

ITA

Drum Tobacco Blue 30 g

ITA

BATA = British American Tobacco Australia, ITA = Imperial Tobacco Australia

Source: Convenience & Impulse Retailing5

10.6.3 Market share by brand: cigars

All cigars sold in Australia are imported, and apart from British American Tobacco Australia, the tobacco companies do not have substantial engagement in the cigar market. The grocery value of cigar sales in 2009 was $23.5 million for a total 22 million sticks. Small cigars accounted for the bulk of the sales with a 70.6% value share, followed by medium 23.8% and large 5.6%. Most cigars (67.7%) were sold in packs of 10, followed by 5s (17.9%) and 20s (12.6%) with singles making up only 1.7% of sales. Stuart Alexander is the cigar market leader with a 50% share, with Swedish Match coming in second with a 36.2% share and British American Tobacco Australia rounding out the category with a 13.8% share.1 Table 10.6.8 details the popular cigar brands sold through Australian grocery stores.

Table 10.6.8
Leading cigar brands sold by grocery stores ranked by % value of market share, 2010

Small

Medium

Large

Brand

Share %

Brand

Share %

Brand

Share %

Willem II

37.8

Henri Wintermans

62.3

Henri Wintermans

97.9

Cafe Creme

23.9

Willem II

36.0

Willem II

2.1

Captain Black

18.3

       

Old Port

17.3

       

Source: Retail World1

Willem II Blue is the best-selling cigar brand/variant in Australian convenience stores.5 See Table 10.6.9 for a ranking of the top 10 cigars products sold through convenience retailers. According to Convenience & Impulse Retailing, there are three types of roll-your-own (RYO) consumers:

'There are the RYO 'Loyalists' who have been smoking RYO for a long time, enjoy the natural RYO taste and purchase predominantly big pouches such as 50g. There are the RYO 'Dualists' a growing segment of consumers who smoke both [tailor-made cigarettes] and RYO. Finally, there are the [tailor-made cigarettes] 'Switchers' who move to RYO for either value reasons or for the unique flavours that RYO can offer. These consumers generally purchase smaller pouches such as 30 g.'5

Table 10.6.9
Top 10 cigar brands, representing 76.0% of total sales of cigars sold through convenience retailers

Brand

Share %

Willem II Wee Willem Blue 10s

Swedish Match

Captain Black Dark Crema 20s

BATA

Cafe Creme Blue 10s

Henri Wintermans

Henri Wintermans Short Panatella 5s

Henri Wintermans

Willem II Wee Willem Regular 10s

Swedish Match

Cafe Creme Regular 10s

Henri Wintermans

Captain Black Sweet Cherry 20s

BATA

Captain Black Classic Filter 20s

BATA

Henri Wintermans Long Panatella 5s

Henri Wintermans

Henri Wintermans Half Corona 5s

Henri Wintermans

BATA = British American Tobacco Australia

Source: Convenience and Impulse Retailing5

i Questions about brands purchased were included in the early surveys evaluating the impact of the National Tobacco Campaign from 1997 to 2001, but reports from this survey have not been published for some years.

References

1. Annual report, Market sizes & shares Retail World 2010;63(23):50.

2. Convenience & Impulse Retailing. Nielsen convenience and impulse sales report. Balmain, NSW: Berg Bennett, 2009, [viewed 1 July 2011] . Available from: http://www.c-store.com.au/industry/acn/acn2009.pdf

3. White V and Smith G. Australian secondary school students' use of tobacco, alcohol, and over-the-counter and illicit substances in 2008. Report prepared for the Drug Strategy Branch Australian Government Department of Health and Ageing. 2009, [viewed 16 July 2011] . Available from: http://www.ancd.org.au/images/PDF/australian_secondary_school%20_drugs_2008.pdf

4. Euromonitor International. Local company profile, Imperial Tobacco Australia Ltd. Tobacco - Australia, September. London: Euromonitor International, 2010, [viewed 31 March 2011] . Available from: http://www.euromonitor.com/tobacco

5. Convenience & Impulse Retailing. RYO & cigar sales continue to defy the odds. Balmain, New South Wales: Berg Bennett, 2010, [viewed 15 July 2011] . Available from: http://www.c-store.com.au/magazine/article.php?id=544

6. Convenience & Impulse Retailing. Tobacco. Endless challenge. Balmain, New South Wales: Berg Bennett, 2010, [viewed 15 July 2011] . Available from: http://www.c-store.com.au/magazine/article.php?id=525

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