Innovation is helping boost Shisha market

Arjavi Indraneesh|Arabian Post

Shisha smoking is a deeply held social tradition in Middle East and Africa, going back centuries which represents hospitality, respect, and a shared experience. The US has now joined the club and the social habit is winning over fans in countries in Asia-Pacifica and Europe as well. There are some 50 million shisha smokers worldwide, whose market size is estimated at $19 billion and is set to increase to $23 billion by 2026.

The increasing appeal for the habit, despite a global campaign against smoking, is being attributed to several factors, including the increasing number of hookah users in the Asia Pacific region. The reasons cited as manifold, which include the region’s growing spending power, a strong desire among individuals to indulge in the luxurious lifestyle associated with hookah, and the presence of a significant millennial population that is inclined towards exploring such experiences.

“With studies showing that people with strong social and support networks have a greater sense of belonging, and ultimately improved wellbeing, you can see why its appeal will continue to grow,” says Ronan Barry, Chief Legal & Corporate Officer at Advanced Inhalation Rituals (AIR), the world’s leading shisha company.

AIR claims to be the leader in the global shisha industry, owning 47 percent of the market, consistently outperforming competitors and growing at 3 times the market rate over the last 10 years, which the company attributes to heavy investment in innovation, product, and user experience, putting the consumer at the centre of it all.

Here is the full interview with Ronan Barry:

Arabian Post: How do you reconcile growing health concerns about smoking with the company’s business model?

Ronan Barry: Being health aware is, of course, of great importance. There is a lack of clarity around the differences between cigarettes, vaping, and shisha. All too often they are thrown into the same category which is misleading for people as they are not the same. When it comes to people’s health, it is important that people have the accurate information.

While many things are not risk free, where when and how shisha is consumed sets it apart from cigarettes and vaping. This is because shisha is inhaled by heating the product, not burning it (like cigarettes), therefore the composition of shisha cloud is mainly water vapour and glycerol. Furthermore, laboratory analyses have shown that the aerosol produced by a typical shisha product contained significantly fewer toxicants compared to cigarette smoke. The levels of toxicants from a one-hour shisha session were over 90% lower than those from a single cigarette.

It is also important to remember that unlike cigarettes or vaping, which are used compulsively, shisha is used much more occasionally with a heritage of bringing people together socially.

In a continued mission to find new ways for people to have a cleaner shisha experience, AIR is innovating and investing heavily in new products which will take the shisha market into new territory. We now offer tobacco and charcoal free options, which eliminates charcoal smoke while improving the traditional shisha experience users have come to enjoy.

AP: What is the basis for the assessment that the global shisha market will grow from USD 19 billion to USD 23 billion in the next three years?

RB: These figures are based on studies from Bain, FMI (Future Market Insights) and our own internal estimates. They show that the size of the shisha category was at USD 19 billion in 2022 and is expected to grow to USD 23 billion in 2026. That growth is no surprise when you consider that shisha is a deeply held social tradition going back centuries which represents hospitality, respect, and a shared experience. With studies showing that people with strong social and support networks have a greater sense of belonging, and ultimately improved wellbeing, you can see why its appeal will continue to grow. While the US, Middle East and Africa are currently dominant markets, it is expected to grow in Asia-Pacific and Europe over the coming years.

AP: Who are AIR’s main competitors? In terms of innovation, how does the company score over its competitors?

RB: We are the leading business in the shisha market, with a 47% share, we believe we are unique in our quality and scale of the shisha products we offer.

We have consistently outperformed our competitors, growing at three times the market rate due to our heavy investment in innovation, product, and user experience, with a strong focus on putting the consumer at the centre of it all. Our latest example is the launch of OOKA, the world’s first charcoal-free, pod-based shisha device, making it the cleanest tobacco inhalation product on the market.

AP: Considering that shisha smoking is essentially a part of Arab culture, how does a company like AIR with apparently non-Arab roots find acceptance from Arab customers.

RB: Al Fakher, a brand of AIR has a strong Jordanian heritage, and shisha smoking is indeed deeply rooted in Arab culture, and it is a significant part of the daily lives of many people. It is not only a means of relaxation and entertainment but also a social activity that brings people together. Millions of people gather to enjoy shisha as they bond over conversations with friends and form lasting relationships. This shared experience is a ritual of deep importance to many diverse communities around the world.

It is by respecting these time-honoured social customs of shisha smoking and bringing them together with the latest innovations that we have gained acceptance and approval of Arab customers for our products, as seen by our expansion in markets such as Saudi Arabia. This strategy not only demonstrates our reverence for the cultural heritage and values of our customers but also offers them an elevated and enriched shisha experience.

AP: Does the company have a view on the possible growth of shisha market and its correlation to the expansion of Arab and Muslim ethnicity in the European continent?

RB: We believe the shisha market is on track to grow significantly in the coming years. Part of that is due to product innovation, which will combine centuries of tradition with cutting edge technology.

Looking at Europe in particular, it is true that the growth of communities with Arab and Muslim heritage has contributed to the rise in shisha use across the continent. However, there is evidence which shows an embracing of shisha culture among the wider European population as more people recognise the enjoyment of the product as part of in-person socialising. Indeed, we’re seeing entrepreneurs capitalising on the growth of shisha and building their own businesses in countries like Germany, Spain, and Czechia. Native Europeans are accepting of new cultures and rituals, and this very much demonstrates that shisha is now also a symbol of integration.

AP: Is shisha smoking finding fans in non-traditional native communities, such as in the West and Asia?

RB: In short: yes, the shisha tobacco market is experiencing growth in various regions worldwide. The United States, India, East Asia, and Europe are all witnessing an upward trend in this market, with the Asia Pacific region being particularly notable as a growth market.

This can be attributed to several factors, including the increasing number of hookah users in the Asia Pacific region. This rise in users can be attributed to a combination of factors such as the region’s growing spending power, a strong desire among individuals to indulge in the luxurious lifestyle associated with hookah, and the presence of a significant millennial population that is inclined towards exploring such experiences.

AP: Can you provide a brief history of the company and its associated businesses?

RB: Founded in 1999, AIR Global has a mission to revolutionise the shisha and inhalation industry. By seamlessly integrating centuries of tradition with cutting-edge innovation, AIR’s goal is to minimise harm and maximise enjoyment for millions across the globe. AIR has grown its customer base from 20 countries in 2006, to over 100 today. We are headquartered in Dubai (UAE), with factories in Ajman (UAE) and Poland and offices in US, UK, UAE, KSA, India, Poland, and Germany. This year we have launched OOKA, the world’s first charcoal-free, pod-based shisha device, a milestone for the business and for the sector.