HNB Performance Shows Consumer Shift

It is being reported by Brand Finance that the total value of the world’s top 10 most valuable tobacco brands has decreased by 6%, with eight out of ten brands experiencing a decline in brand value this year.

Brand Finance is the world’s leading brand valuation consultancy. 

Brand Finance says: “The ranking reveals a significant shift in the industry towards smokeless alternatives, driven by changing consumer preferences and increasing regulatory pressures. Despite these changes, traditional combustible tobacco brands remain the most valuable, supported by loyal customer bases and effective pricing strategies.”

The brand value of IQOS is said to be up by 8%, giving it a value of approximately £2.68 billion. 

“This makes it the is the fastest-growing tobacco brand, driven by rising revenue from smoke-free products. Philip Morris International reported smoke-free products reached nearly 40% of total net revenues in the fourth quarter of 2023. This was driven by the continued growth of IQOS, which has now surpassed Marlboro in net revenues, solidifying its position as the leading premium nicotine brand less than 10 years after its launch.”

Declining cigarette sales have seen Marlboro’s brand value drop by 6% to approximately £25 billion – meaning that Marlboro continues to lead the sector by a significant margin. Its brand value is more than five times that of L&M, which holds the second spot.

Brand Finance says: “Altria, which owns Marlboro in the USA, and Philip Morris International, which owns the brand elsewhere, have both faced declining revenue from combustible products. Altria has struggled with lower shipment volumes and increased promotional investments, including a recent 17-cent per pack price increase on Marlboro and other brands in the USA. Similarly, Philip Morris has reported a drop in revenue from combustible tobacco. Nevertheless, Marlboro retains its top position due to its loyal customer base and strong promotional strategies.

“L&M (brand value USD6.2 billion) has climbed to second in the ranking, despite recording a 2% decline in brand value. It has overtaken Pall Mall, which now sits in 3rd following a 9% loss in brand value to USD5.9 billion. L&M’s brand value has taken a hit as shipment volumes have declined. L&M is the sector’s strongest brand with a Brand Strength Index score of 77 out of 100.”

Richard Haigh, Global Managing Director, Brand Finance commented: "While Marlboro continues to lead as the most valuable tobacco brand for the tenth consecutive year, the industry is undergoing significant transformation. The rise of smokeless alternatives like IQOS highlights shifting consumer preferences and changing market dynamics. Earlier this year, BAT's announcement of a USD31.5 billion impairment on the value of some of its US cigarette brands marked the first significant write-down in a major market. Acknowledging the reality that the market for traditional cigarettes is shrinking and taking action should be seen both as a bold and an important step in addressing an existential problem for the company. With 8 out of the top 10 brands experiencing declines in value, tobacco giants must be brave in admitting market shifts and strategically planning their next moves to sustain global dominance and relevance."

Photo Credit:

• Background image by Bekky Bekks on Unsplash

Dave Cross

Journalist at POTV

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Dave is a freelance writer; with articles on music, motorbikes, football, pop-science, vaping and tobacco harm reduction in Sounds, Melody Maker, UBG, AWoL, Bike, When Saturday Comes, Vape News Magazine, and syndicated across the Johnston Press group. He was published in an anthology of “Greatest Football Writing”, but still believes this was a mistake. Dave contributes sketches to comedy shows and used to co-host a radio sketch show. He’s worked with numerous start-ups to develop content for their websites.