The need for adult smokers to garner the best possible value for their money continues to fuel growth and NPD in the roll your own market

Shoppers want value for money. It’s nothing new, but as the years roll on and the “Aldi effect” takes an even greater hold on the UK shopping psyche, it’s certainly becoming increasingly pertinent to c-store retailers.

The discount channel is set to double in value over the next four years, according to IGD, as chains such as Aldi and Lidl continue to change consumer perceptions – proving that products can still offer ‘quality’ without the accompanying large price tags.

Fortunately for the UK’s booming convenience sector (which is expected to remain the third fastest growing grocery market segment behind online sales and the discounters), Aldi and Lidl don’t currently sell tobacco in their UK stores. But the hard-wired need for shoppers, and in particular adult smokers, to garner the best possible value for their money is shaping what’s on sale in c-stores and is what continues to fuel growth in the UK roll your own (RYO) market. 

RYO now represents 32.6% of the total tobacco market and is growing at 3.5% year on year according to JTI data.

Raj Patel, owner of Weybridge News in Surrey, says that RYO sales are still growing in his store. “The UK is out of the recession and our store is located on a busy high street in an affluent area, yet even now, and in this area, adult smokers are continuing to downtrade from cigarettes into RYO as they realise that it can offer them better value for money,” he says.

Top 10

RYO brands

Amber Leaf

Golden Virginia Classic

Cutters Choice

Gold Leaf

Golden Virginia Smooth



Pall Mall RYO

Sterling Rolling

Old Holborn

Source: Nielsen Market Track 
year to date May 2015

“RYO also allows them the flexibility of managing their consumption; they can roll as large, or as small as they like, depending on exactly how much value for money they want to eke out of a pouch. The past year has also shown a noticeable swing towards smaller pack sizes among existing RYO smokers.

“Manufacturers have been lowering pack sizes, partly to hit certain price points, and smokers are buying into that,” he says.

Sam Coldbeck, owner of Wharfedale Premier in Hull, agrees. “We are selling more RYO than we were a year ago and small pack sizes are increasingly popular, especially with what we call the 
‘leisure smokers’ – people who smoke socially on evenings or lunches out, or those who switch between cigarettes and RYO.

“Large packs are still popular, though, but they tend to be bought by regular, loyal RYO smokers,” she adds.

The 12.5g pack is the UK’s most popular size, with just over a 30% share of the RYO market, according to JTI head of communications Jeremy Blackburn.

Amber Leaf 12.5g is JTI’s biggest selling SKU and it’s the UK’s best-selling RYO SKU overall, followed by Amber Leaf 25g and Amber Leaf 50g. And even smaller pack sizes such as 8g and 9g are also growing in popularity.

JTI itself launched Holborn Smooth Taste and Sterling Rolling Tobacco in 9g pack formats back in 2014, while Imperial’s GV Smooth brand is available in an 8g Handy Pack (with an rrp of £3) while Gold Leaf (£2.99 PMP, £3.05 rrp) and JPS RYO (£2.99 pmp, £3.12 rrp) both offer 9g pouches.

“As this trend takes hold and the tobacco market continues to evolve, retailers should ensure they’re offering a wide choice of tobacco brands and pack formats, including a range of 9g, 10g, 12.5g, 20g, 25g, 40g and 50g packs,” JTI’s Blackburn adds.

It’s sound advice considering the way in which adult smokers are purchasing tobacco throughout the week.

Alan Graham, general manager for the Santa Fe Natural Tobacco Company (SFNT), elaborates: “Anecdotally, smaller packs tend to be bought towards the end of the day by consumers to carry them over until they can buy a bigger pack. Larger packs are bought before the weekend and especially before Christmas and other holiday periods,” he says.

But from next year, the flood of small pack sizes will start to dry up when new EU Tobacco Product Directive rules banning manufacturers from producing RYO in packs of less than 30g come into play. Retailers will have a further 12 months in which to sell through old stock, but retailers such as Raj Patel are already warning regular adult smokers about the impending changes.

“I am already starting to communicate to adult smokers that from next year small pack sizes will no longer be able to be produced, and the number available on the market will start to dwindle as stocks run down,” he says.

“It’s important to start readying them for this now as it’s going to force people to manage their budgets in a very different way.”

Tobacco manufacturer Ritmeester UK is planning now for the ban on small pack sizes. The specialist cigar manufacturer recently launched its first-ever RYO pack into the mid-priced sector. Bentley Hand Rolling Tobacco is available through Booker branches across the UK now.

The company chose to launch in just two pack sizes, 12.5g and 25g (pricemarked at £4.19 and £7.99), as its national sales manager Andy Swain explains. “We didn’t want to mess around launching lots of different pack sizes. All that’s out of the window from next year.

“With a minimum size of 30g it will be a much more level playing field for manufacturers – and it will also make it easier for adult smokers to assess which brands are truly offering them the best value for money in terms of price per gram,” he says.

“Bentley is a true value for money product. That’s what shoppers want these days and it’s where we come from with our cigar heritage – offering quality tobacco products at great price points is what we are all about.”

Explaining the rationale for launching with a 12.5g and 25g pack format, he adds: “While it won’t be around for long the 12.5g pack size is perfect for trialling.

“We needed to hit that low introductory price of £4.19 as it’s silly to think that people will invest in buying large packs of a brand they have never tried before.”

The 25g pack size was likely to be popular with repeat customers, and the jump in price points from 25g to 30g shouldn’t be too onerous for them once the new law has been enforced, he adds.

Settling on the perfect price points has taken time. “With value for money so key to adult smokers we didn’t want to charge the same price as our competitors – keeping a £1 undercut was important to us and that’s what we’ve achieved with the £4.19 and £7.99 points. The low rrp will hopefully get consumers to buy on price, but then they will stay for the quality,” he adds.

Dark dealings

The loss of small pack sizes is, however, likely to boost sales of illicit tobacco, JTI’s Blackburn says. In fact, he says the loss of smaller pack sizes is a gift to the illicit trade.

“There will suddenly be this huge price gap between what people have been used to paying and what they will have to pay. Just under 50% of all RYO smoked in the UK is already illicit – and measures such as this are bound to make it worse,” he adds.

The RYO market is particularly susceptible to counterfeiting, and JTI intelligence suggests that counterfeit versions of leading RYO brands are now being produced right here on UK soil in illegal factories.

These criminals currently tend to focus on larger 50g pack sizes and that’s unlikely to change once the new EUTPD restrictions come into force.

Pete Nelson, Imperial Tobacco’s anti-illicit trade manager, agrees: “Counterfeiters predominantly focus on larger pack sizes, like 50g, as they offer opportunities for maximum profit. For instance, although forged packs of Golden Virginia Classic 50g often sell for a third to half the price of the rrp (£18.41) they still generate a healthy profit for the criminals who supply them.

“From an illicit trade perspective, smaller pack sizes have traditionally suffered less in terms of being counterfeited. We don’t have any conclusive recent evidence that this situation is changing,” he adds.

However, like the UK cigarette industry, the legitimate RYO market is also increasingly losing out to  ‘cheap white’ RYO brands.

Notorious ‘cheap white’ cigarette brands such as Jin Ling, Fest, Raquel and Richman are now being joined by ‘cheap white’ RYO brands.

“Some of the ‘cheap white’ RYO brands include Durango, Marble, Sheriff and Robin Hood. If any readers have encountered brands such as these and possess information about individuals who may be supplying them, we’d encourage them to call the Customs Hotline on 0800 59 5000,” Nelson adds.

Combi products

Offering papers in pouches is another way in which tobacco brands are attempting to demonstrate value for money to their adult smoking customers.

“Consumers are also demanding extra value in the form of bundled papers, or papers and tips. Indeed, in the value and economy RYO sectors bundled papers are increasingly an industry norm,” Imperial Tobacco head of field sales Andrew Miller says.

Sam at Wharfedale Premier agrees, but says that products with papers tend to be bought more by so called ‘leisure smokers’ who like the convenience that they provide, while hardened regular RYO smokers tend to buy separate papers and filters.

Imperial has invested heavily in the launch of combi products. Aside from the GV Midnight and Sunrise launches, other GV Smooth offerings include an 8g Handy Pack with tips and papers included (rrp £3.00, PMP £2.95) and a 50g pouch – which also includes papers – and has an rrp of £17.30 (£16.98 PMP).

Since this April pouches of JPS RYO have also included rolling papers and another of Imperial’s RYO offerings, Players Gold Leaf, is available in a 9g pack complete with papers, enabling adult smokers to make 22 hand-rolled cigarettes for £3.05 (if they use 0.4g tobacco per hand-rolled cigarette).

JPS RYO is available in 9g, 25g and 50g pouches at £3.12, £8.09 and £15.79 (rrp) respectively. The 9g and 25g PMPs are also available at £2.99 and £7.56.

Last year JTI updated its Holborn Smooth Taste RYO range with a new format, price and the inclusion of papers to offer existing adult smokers value for money.

Smoothly does it

UK adult smokers have traditionally preferred smoother-smoking products, and demand for smoother variants continues to grow in the UK. This is to the detriment of the fuller flavoured, traditional products, points out Graham at SFNT.

He explains: “The UK consumer has always been a smoker of ‘smoother’ products than in the rest of Europe as we prefer a pure Virginia tobacco-based RYO, which tends to be smoother and less full flavoured than the Burley-based blends on the continent (the UK is approximately 90% Virginia in RYO).

“The fuller-flavoured blends have been in decline for some years so there is evidence that the consumer has been slowly switching, but the move has been increased with the raft of ‘smooth’ NPD,” he adds.

The influx of new product development in this area has certainly been hard to ignore. Recent years have seen smooth variants take the market by storm, and launches have included Cutters Choice Smooth Blend, GV Smooth, GV Sunrise and most recently Natural American Spirit Original Yellow.

The long-running trend is also continuing to shape NPD in accessories, as Republic Technologies general sales manager Gavin Anderson explains: “Republic Technologies’ recent NPD has concentrated on activity which taps into key consumer trends such as the growing demand for smoother taste and enhanced tobacco flavour, which was behind the launch of the Ultra Slim Swan filter.”

He adds: “The filter is the thinnest Swan filter ever produced and provides RYO smokers with a smoother taste and enhanced tobacco flavour.”

Premium RYO

While the most significant growth in RYO is occurring in the economy sector, sales of premium brands are holding their own and the market accounts for about 20% of sales, according to Imperial Tobacco. 

The need for manufacturers to offer smaller pack sizes and hit certain pricing sweet spots is clearly not as pertinent within the premium pricing sector – illustrated by the fact there are almost no premium RYO brands sold in packs of less than 12.5g. And neither is pricemarking as important.

However, premium tobacco brands do still need to demonstrate value for money to their adult smokers.

One way in which many manufacturers including JTI, BAT and SFNT are achieving this is via ‘natural’ or organic credentials. According to JTI, more than 70% of existing adult smokers now declare an interest in organically-grown tobacco.

“Attributes such as the use of premium tobacco and being additive-free may lead to a premium price point, but an increasing number of discerning adult tobacco consumers are seeing this type of quality product as great value,” adds SFNT’s Graham.

The market as a whole is currently showing a slow but steady growth of 1.3% in volume year on year, with London accounting for about 25% of all additive-free sales.

SFNT’s   atural American Spirit, in particular, is making headway. The brand, which is made using only 100% additive-free, certified organic, whole leaf tobacco, is enjoying great success with its 12.5g pack format, which has seen sales increase by 9% year on year, while its 25g packs are up 14% year on year.

There are also regional differences when it comes to premium RYO, with Brighton in the South and Bristol in the South West showing a much higher consumption level of additive-free products, Graham adds.

Last year JTI expanded its Amber Leaf tobacco brand with Amber Leaf Signature Blend – a Brazilian blend which contains organically-grown tobacco leaf. The brand was given a summer makeover in July with a new pack design rolled out across both the 10g 3-in-1 SKUs and 20g pouches with papers.

“Amber Leaf Signature Blend is well positioned to meet the growing trend towards organically-grown tobacco, with the new pack design strengthening the relevance of the brand among this group of existing adult smokers,” Jeremy Blackburn says.

BAT’s Cutter’s Choice brand, meanwhile, has its True Blend variant, which contains no added artificial flavourings. True Blend offers adult smokers a bright and aromatic taste, with musky, spicy and nutty hints. The line includes humectants to ensure that the tobacco remains moist enough to roll and smoke.

The thinking behind GV Midnight and GV Sunrise

GV Smooth’s RYO family was recently expanded with the introduction of GV Midnight and GV Sunrise.

GV Sunrise and Midnight have been created to focus on identified niches within the value RYO sector.

GV Sunrise is designed to appeal to adult smokers who are potentially new to RYO and looking for an ultra-smooth, more modern RYO smoking experience.

GV Midnight, while remaining a modern blend, offers a rich, full-flavour smoke – potentially attracting those adult smokers who may be looking to downtrade to RYO from the full-flavour  dominated factory-made cigarettes market.

Both variants are available in a 10g pack size, including papers, with an rrp of £3.60.

The small pack size reflects recent industry trends, Imperial Tobacco says, where there has been “a marked increase in the number of consumers who are shopping ‘little and often’ – and who are also seeking a quality product in combination with a lower out-of-pocket spend,” the copmpany adds.

The GV Midnight/Sunrise team also wanted to build brand equity while at the same time increasing customer awareness by focusing on a smaller weight pack, and they believe 
the 10g offering is not only an increasingly popular size with RYO consumers, but also a good fit for encouraging trialling.

Creating GV Sunrise and Midnight in 10g packs also means the launches can both achieve a sub-£4 price point (rrp of £3.60).


Accessories to success

Despite sweeping changes in the tobacco market and the display ban coming into full force, the UK’s £242m RYO accessories market is shining brightly.

Imperial Tobacco’s Rizla brand continues to lead the pack with an 84% share of the market, according to Imperial Tobacco figures.

Rizla Regular Green continues to be the nation’s favourite RYO paper, accounting for almost 59% of all papers sales.

Indeed, the tobacco display ban may have provided a helping hand to sales. Gavin Anderson, general sales manager for RYO accessories supplier Republic Technologies (UK), says the display ban has prompted many retailers to “think long and hard about how to promote and maintain tobacco sales”.

He adds: “Many shopkeepers are now featuring accessories on display stands and off gantry fixtures, using them as a signpost for tobacco in store.

“The additional prominence given to them is boosting demand for market-leading RYO products such as Swan filters and Zig-Zag papers,” he says.

Market data shows that filters are the best-performing sector of the accessories market, now valued at £65m and growing at 1.3%, according to IRI data for the 52 weeks to 26 April 2015.

Swan filters, meanwhile, are growing at almost 
three times the total market, with year-on-year sales up 3.6%.

Republic Technologies’ Zig-Zag brand is growing at 9% year on year, helping to boost the UK’s £83m papers market.