Altria's Problems Go Deeper Than Just Falling Tobacco Sales
Smoking rates have been declining significantly for decades. According to the American Lung Association, less than 12% of adults smoked in 2022, compared to nearly 43% in 1965. It's a trend that's likely to continue as people become more health-conscious and learn more about the dangers of smoking. For Altria (NYSE: MO), it means more pressure from investors for the business to diversify into other products. Smokeable products still account for the vast majority of its sales. But drastically changing its sales mix won't be easy or perhaps even possible anytime soon. And one area of its business, which looked like it might be a good growth opportunity, isn't faring well.Altria has been looking for ways to expand and diversify its growth opportunities so that it's less dependent on smokeable products. One of those ways is focusing on e-vapor products. However, the company says that while the market expanded at a rate of 30% last year, the problem is that the illicit market has 60% market share. While regulators have been trying to stop that, Altria says that enforcement actions simply haven't had much of an effect.Continue reading
Smoking rates have been declining significantly for decades. According to the American Lung Association, less than 12% of adults smoked in 2022, compared to nearly 43% in 1965. It's a trend that's likely to continue as people become more health-conscious and learn more about the dangers of smoking.
For Altria (NYSE: MO), it means more pressure from investors for the business to diversify into other products. Smokeable products still account for the vast majority of its sales. But drastically changing its sales mix won't be easy or perhaps even possible anytime soon. And one area of its business, which looked like it might be a good growth opportunity, isn't faring well.
Altria has been looking for ways to expand and diversify its growth opportunities so that it's less dependent on smokeable products. One of those ways is focusing on e-vapor products. However, the company says that while the market expanded at a rate of 30% last year, the problem is that the illicit market has 60% market share. While regulators have been trying to stop that, Altria says that enforcement actions simply haven't had much of an effect.
