Sales of alternative tobacco products to double by 2021 | Progresiv
According to Moody's, the global tobacco sector outlook is stable as price hikes offset falling cigarette sales. Operating profits expected to grow by 3%-4% into 2020 on price rises, cost reductions, while E-cigarette sales growth will double into 2021, but remain small part of overall market. 
The outlook for the global tobacco sector for the coming 12 to 18 months remains stable, Moody's Investors Service said in its annual report on the industry.
The key driver of the stable outlook is the anticipated growth in operating profits of 3.3% in 2019 and 3.8% in 2020. This comes on the back of ongoing price rises, cost reductions and smokers switching to higher priced cigarette brands. These factors will offset the impact of fewer cigarettes being sold.
"Sales of alternative products, like e-cigarettes, will continue to grow rapidly, doubling in the next two years," said Roberto Pozzi, a Moody's Senior Vice President. "But their share of the tobacco market will remain a modest 3%-4% partly due to competition and low adoption."
Regulation continues to be a risk, although a manageable one. The US Food and Drug Administration (FDA) plans more regulation, but so far has not enacted any which could exacerbate the pressure on the industry. Several litigation cases remain ongoing but are unlikely to be settled in the next 12-18 months. (www.moodys.com)
