Cigarette and alcohol companies cited strong demand for high-end products people can't seem to shake when they reported results this week. Far from buying cheaper alcohol and tobacco, shoppers are instead trading up
People who smoke cigarettes, buy luxury products and drink alcohol, however, tend to stay loyal to their brands even if they're more expensive.
Diageo doesn't have much competition from supermarket-owned brands, she said, highlighting the United States where private label represents less than 2% of the spirits market.Alcohol consumption increased worldwide during the pandemic as people stuck at home had limited options for entertainment. "As consumer budgets come under pressure, we may see some downtrading, so still buying a bottle of spirits, but maybe the next price tier down. Diageo is seeing some of this in cognac for example, but not in tequila," Frikkee said.
Meanwhile, sales of luxury tobacco products - cigars, cigarillos and smoking tobacco - are expected to rise 7.5% to over $95 billion, according to Euromonitor.
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