How COVID-19 has Affected the Tobacco Industry

The COVID-19 pandemic has had an effect on nearly every person across the globe. Virtually all businesses have been affected, whether it’s the financial, service, convenience store, travel or CPG industry. The tobacco industry is no exception. While the tobacco business is somewhat resilient through the ups and downs of the economy, we have seen shifts in the way business is done.

In the early days of COVID when there were many unknowns, we began to see shut downs and store closings. As this happened, adult consumers flooded to stores, emptying shelves to stock up on their frequently-purchased goods, including tobacco. What showed as a significant decrease in stores trips translated to a larger market basket, increasing sales overall. As second quarter carried on, we saw the opposite: fewer store trips and fewer purchases as consumers worked their way through the inventory in their homes. After leveling out over the summer we continue to see fewer store trips than years past, but a larger basket size, purchasing more at one time.

The tobacco industry was able to manufacture and provide secure jobs during the pandemic but that doesn’t mean it didn’t experience challenges. Some manufacturers struggled with inventory supply as COVID-related factors crept in. Staff shortages, commodity scarcities and transportation challenges all culminated and at times made delivering products to store shelves difficult. Distributors and retailers were left empty handed while consumers were forced to shop elsewhere or switch brands.

Changing the way business was done was the biggest impact of the pandemic. Learning to quickly adapt to consumer purchasing habits while protecting employees and providing a safe work environment was no small feat. However, the unity between the suppliers, distributors and retailers was important to ensure business kept moving forward.