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Abstract
This paper aimed to identify continued and emerging trends in the Australian tobacco market following plain packaging implementation, over a period of substantial increases in tobacco taxes. Since 2012, our surveillance activities (including review of trade product and price lists, ingredient reports submitted by tobacco companies to government and monitoring of the retail environment) found several trends in the factory-made cigarette market. These include the continued release of extra-long and slim cigarettes and packs with bonus cigarettes, particularly in the mainstream and premium market segments; new menthol capsule products; other novel flavourings in cigarettes; filter innovations including recessed and firm filters; continued use of evocative and descriptive product names; the proliferation of the new super-value market segment; and umbrella branding, where new products are introduced within established brand families. Several similar trends were also observed within the smoking tobacco market. While not all of these trends were new to the Australian market at the time of plain packaging implementation, their continued and increased use is notable. Plain packaging legislation could be strengthened to standardise cigarette and pack size, restrict brand and variant names, and ban features such as menthol capsules and filters innovations that provide novelty value or that may provide false reassurance to smokers.
- packaging and labelling
- surveillance and monitoring
- tobacco industry
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Background
Australia implemented plain packaging of tobacco products in 2012, requiring all tobacco products to be packaged in drab dark brown packs with brand and variant names in a standard font, colour, size and position on the pack. For factory-made (FM) cigarette products, only hard packs with a flip-top opening were permitted, and minimum and maximum pack dimensions were set to correspond to then typical pack sizes of between 20 and 50 cigarettes.1 Decorative elements were also banned from the cigarette stick. Existing legal agreements and regulations ban the use of light and mild descriptors and fruit or confectionery flavourings that appeal to children.2
Our group’s routine surveillance of the Australian FM cigarette market identified numerous trends in the years immediately prior to, and 1 year post, the implementation of plain packaging.3 Some trends were temporary, such as pack designs observed in the lead-up to implementation that aimed to explicitly reassure smokers that product quality and taste would not change even though tobacco would be contained in drab dark-brown packs. Others were responses to the new regulations, such as introducing long product names to take up more of the space on the front of the pack, incorporating variant names into brand names and changes in pack size to meet new minimum dimensions.3
More persistent trends in the tobacco product market stressed value for money, innovation and diversity. Since the 1980s, FM cigarettes in Australia have been available in a broad range of pack sizes including 30, 40 and 50 cigarettes per pack, as well as 20s and 25s.4 However, shortly before plain packaging, we noted an emerging trend for small packs with ‘bonus’ cigarettes, first in 22s, then 21s, 23s and 26s.3 We also observed several new ‘super-value’ brands that were priced below the cost of brands that formed the traditional value segment in the Australian FM cigarette market. Brand extensions were also introduced for several brands, including extra-long cigarettes, shorter and slimmer cigarettes (‘slims’), products with evocative names and novel menthol products. Finally, the major tobacco companies rationalised their brand portfolios, with several low-market share brands either being discontinued or reduced to only one pack size offering.3
Our continued surveillance of the Australian tobacco market has included: review of ingredient reports for each brand of cigarettes provided annually by manufacturers by voluntary agreement with the Australian Government Department of Health; examination of retail trade magazines, including published lists of recommended retail prices for the three major tobacco companies operating in Australia (British American Tobacco Australia (BATA), Imperial Tobacco (IT) and Philip Morris (PM)); regular checks of supermarket product offerings; and ad hoc checks in various types of tobacco retailers. In addition, we have conducted two large retail audit studies: one national study from May 2012 to August 20135 and one in the city of Melbourne from November 2013 to November 2015,6 in which details of tobacco products and prices were collected from price boards displayed in retailers. From these activities, we have continued to monitor the product offerings on the Australian tobacco market. The following describes the continued and new trends that we have observed up to early 2017.
A key contextual factor applying to the Australian tobacco market over this period is that tobacco taxes increased substantially. Annual 12.5% increases in tobacco customs and excise duty began in December 2013 and continued in September of each subsequent year, taking the recommended retail price of Winfield 25s from $A17.55 in October 20127 to $A29.60 in January 2017.8
Observed trends
Novel pack sizes
Small packs with bonus cigarettes continue to be offered in Australia. While our previous examination of the market found that these small bonus packs were typically offered among value and super-value brands, these have also recently been introduced among mainstream (mid-priced) and premium (prestige) brand families. BATA replaced packs of 25s in the premium brand Dunhill with 23s in 2016, a strategy apparently designed to absorb the cost of that year’s 12.5% tax increase.9
Novel pack sizes have also recently been introduced in large packs. In 2015, the smaller importer Richland Express offered two super-value brands, Deal and Reef, in packs of 43s, and the BATA introduced packs of 44s in early 2017 for the value brand Pall Mall. Over the period of interest, FM cigarettes have variously been offered in packs of 20s, 21s, 22s, 23s, 25s, 26s, 30s, 35s, 40s, 43s, 44s and 50s.
Extra-long and slim cigarettes
Extra-long cigarettes, also called ‘super kings’ or ‘extra kings’, and slim cigarettes were not new to the Australian market at the time of plain packaging implementation.3 Extra-long cigarettes have increasingly been offered within established brand families across all market segments. The previously popular (and very cheap) slim cigarette JPS Nano was repackaged from 20s to 23s to conform to minimum pack dimension requirements set out in the plain packaging regulations3 but was discontinued by IT in early 2014 (as were Benson & Hedges Demi Slims in 2015). As of mid-2017, BATA’s Winfield Jets and Vogue Superslims (also an extra-long cigarette) were the only slims on the Australian market. With tobacco excise and duty set on a per stick basis, not by tobacco weight (up to 0.8 g per stick), slim cigarettes are not competitively priced in Australia.
Menthol capsules
Since plain packaging implementation, menthol capsule products have been offered within at least two brand families (including a premium brand) from each tobacco company. These include a capsule in the filter that releases menthol flavouring when the filter is squeezed, providing ‘customisation’ and ‘consumer interaction’ with the product.10 Peter Jackson Hybrid (PM) was the first menthol capsule product available on the Australian market, well before plain packaging.3 After plain packaging, the variant names of this product were expanded to include the descriptor Regular to Fresh. Imperial Tobacco’s Peter Stuyvesant + Pop Refreshing Crushball is similarly instructive. Other recently introduced menthol capsule brand extensions include Marlboro Ice Blast, Winfield Optimum Crush, JPS Duo and the now discontinued Pall Mall Menthol Capsule.
Further developments in menthol capsule products were observed in early 2017. BATA introduced Winfield Crush Summer Rush, which has a green menthol capsule instead of the usual blue. On calling the BATA information helpline in April 2017, we were informed that the product has a ‘zingy mint flavour’, but the BATA employee would not comment on whether we were correct in our assessment that the scent that we detected on crushing the flavour capsule was lime or citrus. PM has introduced PJ Hybrid 2Xtreme Fresh with two capsules in the filter, one green and one blue (figure 1).
PJ Hybrid 2Xtreme (Philip Morris) pack and inside of filter showing dual menthol capsules. Source: Centre for Behavioural Research in Cancer pack collection.
Other novel tobacco flavours
Most major cigarette brands in Australia offer at least one menthol variant. A new type of menthol product was introduced by IT in 2012, Horizon Fusions, with mint leaves mixed through the tobacco.3 This was discontinued after November 2013, and no other fusion-style products have been launched. Around 2015, PM briefly experimented with kretek cigarettes (Longbeach Kreteks and Marlboro Kreteks), but these were only seen in stores for a short time.
Filter innovations
An entirely new trend for the Australian market, first seen in 2015, is innovative filters on established major brands. Two types of filters have been introduced: recessed filters (figure 2), identified in the variant name as ‘Taste Flow Filter’ on BATA brands, and extra-dense filters, labelled ‘Firm Filter’ (PM brands) or ‘Firmer Feel Filter’ (BATA brands). A Philip Morris executive in the UK, where firm filters have been rolled out on Marlboro packs, explained that these filters ‘offer quality you can feel, and a cleaner way to stub out your cigarette’.11 Recessed filters, on the other hand, reportedly ‘create a smoother taste and shift the staining observed on the cigarette mouth end away from the consumer’.12
Recessed filter tips on Winfield Taste Flow Filter (British American Tobacco Australia). Source: Centre for Behavioural Research in Cancer pack collection.
Packs labelled with these filter innovations have largely replaced all regular product offerings within leading brands including Winfield, Dunhill, Longbeach, Peter Jackson, Rothmans, Alpine and Benson & Hedges. At around this time, BATA introduced a Winfield brand extension, Baseline, that did not have a recessed filter. This was available from approximately 2015 to 2016, perhaps to ease the transition for consumers who did not prefer the Taste Flow Filter range. To date, we are not aware of any IT cigarette products with these filter innovations.
Evocative and descriptive product names
As already noted, many recently introduced brand extensions have long, descriptive names. In the post-plain packaging market, these often use the brand name to communicate product attributes such as length or menthol capsule function. For example, IT introduced a value brand extension, Horizon 93mm Long in 2015, to date the only brand to incorporate the precise length of the cigarette in the product name. Other product names infer quality or sophistication, including words such as Deluxe, Fine, Optimum or Signature. Names such as Nano, Jets, Blast, Switch, Hybrid and Fusion may be intended to imply modernity or masculinity.
In early 2017, a new style of evocative name was observed. PM introduced a ‘Moments’ range to its well-established mainstream brand Longbeach, including Longbeach Moments North Coast, West Coast, East Coast and Fresh Coast. These have relaxing beach or pool-side connotations (as does Winfield Summer Crush Rush) and, while perhaps not ‘fruit or confectionery flavoured’, are highly spiced (figure 3).
Tobacco trade promotional material for Longbeach Moments (Philip Morris) range. Source: https://www.igatas.com.au/web-assets/Retailer/News/News_Bulletin/2017/2017-02-15_Week_07_-_15_February_2017.pdf.
Super-value brands
Each of the major three companies had introduced a super-value brand by plain packaging implementation. BATA’s Just Smokes was discontinued, however, and replaced with the relaunched Rothmans brand (see also the Umbrella branding and brand rationalisation section) in 2014. IT’s JPS has been hugely successful, becoming the leading cigarette brand in Australia in 2015.13 Brand extensions are included among both Rothmans and JPS products, such as extra-long cigarettes, and all super-value brands (including PM’s Bond Street) are available in a wide range of pack sizes from 20s up to 40s or 50s. Our analysis of supermarket price board contents demonstrated the recent dominance of the super-value segment, becoming increasingly listed at the top of price boards between 2013 and 2015.6
Umbrella branding and brand rationalisation
New FM cigarette products introduced by the major three companies in Australia since 2012, to our knowledge, have all been extensions to existing, well-established brands. This is referred to as ‘umbrella’ or ‘family’ branding,14 15 where new products are introduced under the umbrella of an already strong brand family, facilitating instant consumer recognition and imparting established brand associations to the new product. Umbrella branding also produces economies of scale in production and enhances the effectiveness of marketing activities, as consumers are more likely to try a recognisable product than an unfamiliar one.14 15 A striking example of umbrella branding occurred in 2014, when BATA relaunched an established premium brand with low market share, Rothmans, as a super-value brand.16 The recommended retail price for a pack of 25 Rothmans cigarettes was dropped by about $A10, and three new variants were introduced (Blue, Red, Gold). Shortly after, the product range expanded to a Superkings brand extension and then to further pack size and variant options.17
In an unprecedented move, in 2016 IT launched a second version of its premium brand Peter Stuyvesant, Peter Stuyvesant Originals. This second version is manufactured in the Ukraine and, when launched, retailed for $A3–$A6 cheaper per pack of 20s than the main Peter Stuyvesant range, which is manufactured in New Zealand (figure 4).18 Later in 2016, it was discovered that the foil inserts that enclose cigarettes in Peter Stuyvesant Originals were configured in such a way that it was easy to remove the entire foil insert, providing a shiny soft pack free of graphic health warnings (figure 5).19
Imperial Tobacco’s Peter Stuyvesant Originals (top), manufactured in Ukraine, and PeterStuyvesant (bottom), manufactured in New Zealand. Source: Centre for Behavioural Research in Cancer pack collection.
Imperial Tobacco’s Peter Stuyvesant Originals with foil insert (right) removed from original packaging (left). Source: Centre for Behavioural Research in Cancer pack collection.
Brand rationalisation has also occurred, mostly within BATA, which has the largest portfolio of brands in Australia: Just Smokes and Stradbroke were discontinued; the range of Pall Mall products has dramatically shrunk; and the once-popular FM value brand Holiday is no longer included in retailer price lists. Within all companies, several brand extensions have been introduced and then removed from the market since plain packaging implementation. Introducing new products as brand extensions may be a low-risk opportunity, providing benefits in brand awareness and perceptions of innovation even if the product fails to gain market share.
Trends observed in the smoking tobacco market
The Australian roll-your-own (RYO) tobacco market has traditionally been dominated by several RYO-exclusive brands, such as Champion, Drum and Port Royal, with a small number of (mostly mainstream) FM cigarette brand names, such as Longbeach and Winfield, also used for RYO products. However, in recent years, several newer value and super-value FM cigarette brand names have entered the RYO market, including JPS, Choice, Rothmans and Bond Street. Further, while 50 g was traditionally the most common pouch size, with few products available in pouches of less than 30 g, pouches of 27 g, 25 g and now 20 g are being offered by the major three tobacco companies. These small budget RYO products mean that a pouch of RYO tobacco can be purchased for only slightly more than the price of many small packs of FM cigarettes, but yielding many more cigarettes. Very recently, 10 g ‘sampler’ pouches of flavoured tobacco have been available for purchase from an Australian online tobacco retailer.
While IT’s JPS FM cigarettes are offered in the variants Blue, Gold and Red, JPS RYO tobacco is available in Endless Blue, Abundant Gold and Eternal Red, likely aiming to imply a plentiful quantity of cigarettes with every RYO pouch. BATA’s Winfield introduced a RYO brand extension in 2014, Winfield Dark Fired, and several tubing tobacco products (also called make-your-own) have been introduced to the product ranges offered by the brands Choice (PM) and JPS (IT).
Tobacco accessory suppliers also offer a wide range of slim and micro filters, allowing for the rolling of very low-weight cigarettes. ‘Raw’, ‘earth’, ‘unbleached’, hemp and cotton filters and rolling papers are also presently on offer, perhaps capitalising on misperceptions that RYO tobacco is healthier or contains less additives.20 Globally, organic RYO tobacco is a growing product category,21 although only one organic product is currently available on the market in Australia—Manitou Organic (Richland Express).
Finally, BATA recently made a significant change to the design of its RYO tobacco packaging, introducing a zip-lock closure.22 Where previously the pouch was closed by wrapping the front flap of the pouch around the product and securing it with a reusable sticky plastic tab, now the product is fastened close to the pocket containing the tobacco, leaving the front flap (which contains the graphic health warning) redundant. This can be easily snipped off, leaving a neat, sealed, plain pouch (figure 6).
BATA’s Winfield RYO tobacco as sold (left) and with front flap snipped off (right). Source: Centre for Behavioural Research in Cancer pack collection.
Summary
Since Australia’s plain packaging legislation was introduced, along with the advent of large annual excise increases, the tobacco industry has responded by vigorously introducing new types of products, brand extensions and pack sizes to the FM cigarette and RYO tobacco markets, with a particular emphasis on value for money. The product developments described here are not unique to Australia and were not all new to the Australian market in 2012. The number, range and frequency of new products emerging on the Australian tobacco market—in the context of plain packaging and extensive advertising and promotion bans—may be of concern to policy makers in Australia and other countries considering packaging and product regulations.
In particular, brand variant names highlighting cigarette filter features are increasingly common, with second-generation menthol capsules entering the market, including those with two capsules and new flavours. While uptake of menthol capsules among Australian adults has been low up to 2014,23 more than half of past-month teenage smokers reported having smoked a menthol capsule cigarette in 2014.24 In the absence of traditional advertising channels, tobacco companies also appear to be increasingly using the brand itself (umbrella branding) and one of the few remaining opportunities to communicate product offerings to consumers—price boards in retailers.6 In fact, these lists of tobacco products and prices have been a key resource for our product monitoring activities.
While our methods for monitoring the tobacco market have not been always consistent over the entire period of interest, in each year we have collated product information from a variety of sources. If anything, our methods will have underestimated the range of products on the market, particularly those from smaller tobacco companies sold in specialist tobacconists. It has, however, been difficult to identify with precision when different products entered or were removed from the market. Further, retailer price lists and supermarket price boards often do not provide comprehensive variant name information. Therefore, we may have missed further trends in these product descriptors. Variant names, along with brand extensions, are a critical part of the product name from a marketing perspective, conveying information about the product such as strength or harm,25 flavour, quality or modernity,14 and targeting consumers with varying demographics, lifestyles and aspirations.26
At present, tobacco companies operating in Australia are not required to report sales data to government, and we have not been able to obtain market sales data from third parties. This study has demonstrated the importance of monitoring product offerings on the tobacco market, including popular FM cigarette alternatives, such as RYO tobacco. Ideally, tobacco control legislation should require real-time reporting of all tobacco products available for sale as well as detailed sales figures.
In the post-plain packaging, high-tax market of Australia, companies have continued to modify their product offerings and pricing strategies to maximise appeal to consumers and to suggest affordability and innovation.15 The Australian Government and other governments contemplating plain packaging legislation could increase the effectiveness of such legislation by including provisions to standardise the amount of tobacco that may be included in RYO tobacco pouches and to specify the size and numbers of FM cigarettes that may be included in a pack, enhancements that have already been included in legislation soon to come into force in New Zealand. Governments could also ban features such as menthol capsules and filter innovations that provide novelty value. Brand and variant names may distract from the harms of smoking and provide false reassurance to smokers: naming of tobacco products is a form of promotion that needs to be better understood and more effectively regulated.
What this paper adds
Many changes to the Australian factory-made cigarette market were noted at around the time of plain packaging implementation.
This study has continued to monitor those observed, and new, trends in subsequent years, including in the roll-your-own tobacco market.
Innovation, new product offerings, and umbrella branding continue to characterise the Australian tobacco market, despite plain packaging and extensive restrictions on advertising and promotion.
References
Footnotes
Contributors MMS and MB conceived of this paper and coordinated surveillance materials. All authors contributed to the manuscript and approved the final version of the paper.
Competing interests None declared.
Provenance and peer review Not commissioned; externally peer reviewed.