Vaping and non-combustible products now ‘sizeable contributor’ to BAT’s growth

Vuse is “global leader” in market share in the top five vaping markets in the world, said British American Tobacco on Tuesday (7) as it revealed that more new customers have started using vaping, heated tobacco and oral products in the first nine months of this year than all of 2020.

Calling 2021 a “pivotal year”, BAT said that with an influx of 3.6 million customers in the first nine months of the year, the company’s total non-combustible user base is now 17.1 million.

The company, which owns brands such as Lucky Strike, Pall Mall and Camel, said more people switched to its Vuse vaping and Velo oral nicotine ranges as a healthier alternative to tobacco.

The company also added that it is still making a loss from these new categories – as opposed to its cigarettes – but that for the first time losses are narrowing implying that they have contributed to growing the business’s profits, helping to put it on track to meet its financial guidance for the year.

“Benefiting from a continued strong new category performance, which is now a sizeable contributor to group revenue growth, we are making excellent progress towards our £5 billion revenue target by 2025, supported by a clear focus on THP (tobacco heated products),” chief executive Jack Bowles said.

“By leveraging our increased scale, new categories will contribute to profit growth for the first time as their losses start to reduce, a key step on our pathway to profitability by 2025.”

BAT is reportedly growing revenue by more than 5 per cent due to its new categories, but it’s combustibles business – mainly made up of cigarettes – is also growing thanks to high prices.