The European Union’s increasing regulations and taxation posed significant growth challenges for tobacco companies, prompting them to explore opportunities outside the EU. This case study details how one such brand, guided by insights from Brandscapes Worldwide, successfully expanded into the South American market.
Brandscapes Brew Insights:
Brandscapes Worldwide’s research revealed distinct consumption patterns in South America. A different format of tobacco product emerged as a significant segment, with an increase in tobacco consumption among women and teenagers. Low tar and flavored cigarettes gained popularity among women, while teenagers showed a strong inclination towards reduced-risk products like vaporizers. Smokeless tobacco products also gained traction among the youth.
Two multinational companies dominated the South American tobacco market, holding approximately 85% of the market share. Hotels, restaurants, and cafes (HoReCa) and grocery stores were the primary channels for tobacco products. Key markets for machine-made and hand-made cigars were identified, along with consumer preferences and trends across these markets.
Following Brandscapes Worldwide’s recommendations, the brand launched its products in South America, focusing on the identified key markets. They introduced flavored tobacco products targeting women and leveraged key retail channels like grocery stores to enhance distribution.
The brand’s launch in the South American market was met with encouraging performance, confirming the success of its strategic expansion. This case study serves as a prime example of strategic market expansion, demonstrating the importance of thorough market research and informed decision-making in achieving business growth.