Vaping & tobacco 2025: Outnumbered smokers cut spend on cigs

Vapers now officially outnumber smokers in Britain, November figures from the Office for National Statistics show. One in 10 Brits vape, while the proportion of cigarette smokers is at an all-time low of 9.1%.

That’s bad news for the cigarettes & cigars sector, of course. All but five of the top 30 brands have lost both value and volumes – some severely. Pall Mall, for instance, has shed 23.2% of value on units down 31.4%. Embassy’s value and pack sales have dived 20% and 28.9% respectively. And market leader Benson & Hedges has suffered the biggest absolute value loss, of £172.2m.

Rolling tobacco has also taken a pummelling. It’s down £289.7m and one million kilos.

The popularity of vapes has clearly had an impact on sales of cigarettes, cigars and loose baccy – which have also been savaged by “rising excise duties and broader cost of living pressures”, says Angela Yang, NIQ analytics executive.

“These factors likely contributed to reduced consumption and a shift toward lower-cost alternatives,” she adds. For some, that’s meant illicit cigarettes. They now account for one in four ciggies smoked in the UK, according to a report commissioned by Marlboro owner Philip Morris.

Illegal cigs are one of “the most urgent threats to the livelihoods of convenience retailers in the UK and their communities, with consumers exposed to unregulated, potentially dangerous products from illicit sellers who show little regard for what they sell or to whom”, says Catherine Goger, illicit trade prevention manager at Philip Morris.

The issue has led to major action by law enforcement. Thousands of premises – including vape shops and c-stores – were hit in October by Operation Machinize, a national policing initiative to tackle the criminal exploitation of high street businesses. It seized at least 4.5 million illicit cigarettes and 622kg of illegal tobacco.

The operation also uncovered more than 100,000 illegal vapes, adding to the vaping market’s litany of woes. It’s down £224.8m and 58.5 million units, while top three brands SKE Crystal, Lost Mary and ElfBar have shed a combined £277.8m and 54.5 million packs.

That’s after single-use vapes – the driver of rapid market growth in 2023 – were banned from sale in June. In the first week of the clampdown, the UK’s c-stores lost more than £5m in sales, specialist convenience insight agency Talysis reported.

Says NIQ’s Yang: “Brands reliant on disposable formats saw sharp declines due to the regulatory ban, with limited consumer transition to refillable options. Even technically refillable kits showed low refill uptake, suggesting continued single-use behaviour.”

Where the market has seen growth, it has come “mainly from closed-system brands, which gained traction following the disposable vape ban”, she adds.

That’s meant gains for established players like IVG, Elux and Imperial’s Blu, as well as challengers such as Pixl, Hayati and Titan.

“Success was also supported by strong retail visibility, flavour variety and familiar pod-style formats, helping brands quickly capture market share in a shifting landscape,” Yang says.

Smoking cessation sales boom

There are signs Brits are working to give up both vaping and smoking habits. Sales of nicotine replacement products are booming. Gum, lozenges, sprays and the like have grown value 24.3% on units up 23.8%.

And Big Tobacco is cornering the market. BAT’s pouch brand Velo and Philip Morris’ Terea heat-not-burn sticks now outsell Nicorette. They’ve raked in a combined £104.9m extra. JTI’s Nordic Spirit is buoyant, too. It’s worth £8m more than last year, and pack sales are up 21.3%.

There is still space for challengers, though. Take NGP Tobacco’s Pablo and Killa nicotine pouch brands. They’ve registered 164% and 114.6% value gains respectively.

The pouch market “has evolved from a marginal phenomenon into a rapidly growing and increasingly important segment of the smoke-free nicotine category”, says Markus Lindblad, head of external affairs at specialist retailer Northerner Nicotine Pouches.

“We expect to see factors such as moisture level and pouch size become more important to consumers, but at the moment, it’s the three fundamentals of price, flavours and strength that consumers are focused on.”

The opportunities for further growth are clear. “The UK pouch market is not yet mature, and so there is very little brand loyalty. UK consumers are open to trying different brands and formats,” Lindblad says.

However, regulation could upend the burgeoning category. Retailers, brands and consumer groups have joined to fight for proper regulation of pouches – including strength caps of 20mg of nicotine per pouch and a ban on ads to kids. Their goal, they say, “is to make clear that properly regulated pouches could be the greatest global health innovation of the 21st century”.

Clearly, there’s still all to play for.