Americans smoked 400 billion cigarettes in 2003, nearly 5% fewer
than the year before and down 20% from a decade ago. State excise
taxes are pushing sticker prices higher and regulation remains
relentless. The litigation against Big Tobacco continues, as does
the march toward smoke-free workplaces, restaurants, and bars.
Recent Gallup polling confirms that the tobacco industry has passed
its prime, but the smoking habit in America is far from
extinguished.
Not Quite Kicking the Habit
According to data from Gallup's 2004 Consumption Habits poll*,
one in every four Americans smoke. In the time Gallup has been
asking the question, the number of self-professed smokers peaked in
1954, when 45% of Americans said that they had smoked a cigarette
in the last week. The percentage declined sharply over the
next few decades and has stabilized at around 25% since the 1990s.
Interestingly, the majority of smokers -- in the 80% range since
2000 -- report that they would like to give up smoking.
The Pack-a-Day Crowd
The number of smokers who smoke one pack or more a day was about
6 in 10 before the 1990s, and has consistently remained below 50%
since 1999. The percentage of smokers who smoke "less than one pack
a day" ranged from 34% to 48% from 1944 to 1989, and from 43% to
62% from 1990 to 2004. This percentage has consistently been above
50% since 1999.
According to Anishka Clarke, an alcohol and tobacco industry
analyst at Standard & Poor's, the signing of the 1998 Master
Settlement Agreement (in which the five largest U.S. tobacco
manufacturers settled with 46 U.S. states and several U.S.
territories for $206 billion) "heightened the public's awareness of
the health hazards of smoking, as a significant portion of the
annual settlement payments went toward public education and media
awareness on smoking hazards." Clarke believes that the "effects of
the MSA have contributed to the decline in cigarette smoking since
1998."
A More Forgiving Market Environment
Gallup data reveal that Americans today are slightly more
forgiving of Big Tobacco when it comes to assigning blame for
the health problems that smokers face than they were about five
years ago. In 1999 and 2000, about 30% of Americans believed
tobacco companies were mostly or completely to blame for the health
problems associated with smoking. By July 2004, that number had
fallen to 22%. Dana Bolden, a media affairs representative at
Philip Morris USA, believes that the Centers for Disease Control
and Prevention's 2004 Report of the Surgeon General might explain
this change. Bolden says that the report "includes some data that
people are better educated about the health risks associated with
smoking," suggesting that Americans might be more likely to believe
that smokers know the risks of smoking and are responsible for
their own health problems resulting from it.
Demographics of the Smokers' Market
Aggregated Gallup data from 2002 to 2004** reflect that
cigarette consumption does not differ significantly by gender.
Twenty-six percent of men smoke, as do 23% of women.
A key differentiating characteristic between smokers and
nonsmokers is education. Nearly a third (32%) of people with a high
school education or less smoke, compared with 20% of Americans with
a college education. Income is also a factor -- 27% of those with
annual household incomes below $50,000 smoke, compared with a
smaller percentage -- 19% -- of those with annual incomes of
$50,000 or more.
Bottom Line
Industry analysts predict that per-capita cigarette consumption
will continue to decline between 1% to 3% annually. But Gallup data
indicate that the number of smokers in the country has remained
unchanged for almost a decade and that the decline in cigarette
consumption over the past 10 years may result from smokers having
cut down on the number of cigarettes they smoke, rather than
kicking the habit.
And so it appears that the tobacco industry still has at least
one thing going for it -- a stable core customer base. All things
considered, the outlook for cigarette manufacturers -- regulation,
excise taxes, and other travails aside -- could certainly be a lot
worse.
*Results are based on telephone interviews with 1,005
national adults, aged 18 and older, conducted July 8-11, 2004. For
results based on the total sample of national adults, one can say
with 95% confidence that the margin of sampling error is ±3
percentage points.
For results based on the sample of 224 smokers, the maximum
margin of sampling error is ±7 percentage points.
For results based on the sample of 781 nonsmokers, the
maximum margin of sampling error is ±4 percentage
points.
**Results are based on telephone interviews with 3,016
national adults, aged 18 and older, conducted in July 2002, July
2003, and July 2004.
For results based on the sample of 1,444 men and 1,571
women, the maximum margin of sampling error is ±3 percentage
points.
For results based on the sample of 980 adults with a high
school education or less, the maximum margin of sampling error is
±3 percentage points. For results based on the sample of
2,022 adults with at least some college education, the maximum
margin of sampling error is ±2 percentage points.
For results based on the sample of 1,292 adults with annual
household incomes of $50,000 or more, the maximum margin of
sampling error is ±3 percentage points. For results based on
the sample of 1,535 adults with annual household incomes of less
than $50,000, the maximum margin of sampling error is ±3
percentage points.
