PMI on life after the tobacco wars

Philip Morris International expects that a decade from now there will no longer be a market for cigarettes and sees a “lucrative” business in converting smokers to the range of non-combustible alternatives it has developed. 

Why it matters

The world’s largest tobacco company is preparing for a future in which the number of cigarette smokers around the world continues to fall to the point where governments may introduce regulations to help push remaining smokers into reduced-risk areas. 

At the same time it is looking at the potential of related areas beyond nicotine, such as marijuana, botanicals and respiratory drug delivery technology.

Context 

• PMI has invested more than $8bn in developing its smoke-free business – the IQOS heated tobacco system and e-cigarettes – and says a quarter of its revenue is coming from these new products.
• It claims its IQOS product contains 90 to 95% fewer harmful chemicals than a traditional combustible cigarette.
• Around 70% of those trying IQOS are able to switch away completely from combustible products.
• PMI sold 76 billion of the consumable equivalent cigarettes in the heated tobacco system in 2020 and is aiming to double that by 2023 of 140 to 160 billion units. 

Key quote

“Converting the world’s smokers is an extremely positive and lucrative business for us. In 10 to 15 years, we think cigarettes can be out of the market entirely – people will quit or, if they’re still using nicotine, it’ll be in a non-combustible way” – Martin King, chief executive of Philip Morris International America. 

Sourced from Los Angeles Times