An increasing amount of people worldwide are continually becoming aware of the injurious nature of smoking cigarettes. Societal trends are moving towards cigarette alternatives to satisfy the desire of smoking without the detrimental attributes cigarettes impose.
Swedish snus is one such product. Due to the potential that snus has to offer as a cigarette alternative, it presents a prospective investment opportunity on the stock market, either in the US or worldwide.
Snus is a form of smokeless oral tobacco, which is moist and ground. Snus is generally placed behind the upper lip for extended periods, commonly between 20 minutes to 1 hour, and is consumed by orally absorbing the dissolved tobacco.
Snus can be used as loose tobacco, however, snus manufacturers commonly utilize teabag style sachets prefilled with a portion of snus for convenience, and to provide a consistent amount of snus per use. Unlike dipping tobacco, there is no need to spit when using snus as it does not require chewing, nor does it cause excess salivation.
Sweden imposes stringent regulations on any additives which can be integrated into the final snus product. Consequently, Swedish snus is a relatively pure form of tobacco with minimal chemical additives compared to non-Swedish manufactured snus.
The major 6 snus manufacturers hold a dominant position in the snus market, accounting for the vast majority of snus sales worldwide. These companies include:
A myriad of smaller snus manufacturers are entering the market to capitalize on the increasing popularity of snus. Due to the globalized character of Swedish snus sales, companies such as SnusDirect serve as a gateway for US, Swedish, and other international customers to access an array of snus varieties from the major manufacturers and from niche producers.
Snus offers an attractive alternative to cigarettes and to other smokeless tobacco products. As such, the potential of snus is being realized by an increasing amount of consumers. This proffers a growing market.
The past 5 years have shown a global growth of approximately 9.93%, and analysts predict the compound annual growth rate of the global snus industry to grow by approximately 12% over the forthcoming 5 years, resulting in an industry value of $1.570 billion USD by 2024.
Multiple qualitative factors also support the predicted strong and stable growth of snus. Emerging markets in Asia and South America proffer further expansion. Snus products have varying levels of nicotine release and some snus is tailored to release more nicotine, whereas others can be entirely nicotine free.
Tobacco products which are ignited and inhaled present the highest health risk and ‘second-hand’ or ‘passive’ smoke can adversely affect non-smokers in the vicinity of a lit cigarette. Snus, however, does not have this problem, as the only person affected by its use is the user. Furthermore, snus has been linked to the low rates of smokers in Sweden. Former smokers have turned to snus, assisting in reducing cigarette associated ailments in Sweden.
Snus is not an entirely risk-free product; however, it is on the lower end of the risk spectrum. The quantitative analysis and qualitative features of the global snus market all support growth. Investment in any snus manufacturer and distributor indicates a stable return on investment.
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