GlobalData – Tobacco brands need to reinvent branding
With more countries likely to adopt plain packaging legislation as a next step in anti-tobacco policies, tobacco companies need to find avenues beyond packaging to ensure brand influence over a long term, according to GlobalData, a leading data and analytics company.
The company’s study “The Impact of Plain Packaging on Tobacco Products” reveals that plain packaging may have some utility in getting regular smokers to quit, but is more effective at discouraging occasional smokers.
Australia was the first country in the world to adopt plain packaging in 2012. The Republic of Ireland, the UK and France followed in 2016. Canada, South Africa, Germany, Japan and a host of other countries are most likely to move towards or consider similar legislation. However, according to GlobalData’s 2015 Q4 consumer survey, only 17% of smokers globally said plain packaging would encourage them to quit smoking.
On the other hand, plain packaging seems to deter occasional smokers. A recent GlobalData survey shows that, amongst smokers in Australia, there has been a shift away from occasional smoking. Occasional smokers and those who smoked only with alcohol made up a combined 39% of the smoking population in 2014, but in 2017 this had dropped to 28%. However, plain packaging is expected to have some unintended negative side effects such as the emergence of illegal tobacco trade. When Australia introduced plain packaging, their illegal tobacco market rose by 13% in the first year, costing the government A$1bn in lost tax.
Plain packaging is also likely to affect brand loyalty as the brands can no longer rely on the impact of attractive packaging and the benefits associated with branding in packaging. This could have a shakeup in the market as it could create a more even platform for smaller brands taking away market share from established bigger brands. GlobalData’s 2017 Q4 survey reveals that around 21% of consumers globally said they would consider buying a different brand to the one they usually buy.