The majority of new product activity over the past year or so has been surrounding the budget sector as smokers have followed a trend of trading down to cheaper brands.
Producers have been quick to work on this area of the market in trying to develop strong brands to target the down-trading customer.
Gallaher, for example, launched its Sterling budget brand nationwide this year after selling solely in multiples. The brand was launched into the cheapest cigarette sector. “We know this brand is in demand and that retailers will benefit from stocking it,” says Jeremy Blackburn, Gallaher’s trade communications manager.
Sterling has a retail price of £1.98 for King Size 10s and £3.95 for 20s. Superkings versions sell for £2.00 for
ten and £3.99 for 20.
In January, Imperial Tobacco launched Windsor Blue. The budget brand has been extended into five versions - King Size and King Size Smooth (rsp: £3.90 for 20 and £1.96 for ten), Superkings, Superkings Smooth and Superkings Menthol (rsp: £3.95 for 20 and £1.98 for ten).
One top-selling budget brand, Mayfair, also underwent a revamp to upgrade its packaging. The new look - designed for maximum impact on shelf - came into effect at the end of last year.
And in a bold move at the premium end, Gallaher announced last August that it was aiming to reverse the trend to budget cigarettes by the launch of a 14-stick pack for Benson & Hedges in both its Gold and Silver brands. The price per cigarette remains consistent with a 20-pack, with pack prices per pack of 14 varying between £3.10 and £3.49, and still competes with budget prices.
Blackburn says that the launch of 14s had been successful and admitted the company wasn’t ruling out further development in this area.