Creative destruction: Embracing the next generation of tobacco products
It takes some getting used to: tobacco companies stressing their commitment to a smoke-free world. Just last month, Philip Morris International (PMI), the world’s largest nongovernmental cigarette manufacturer, outlined its vision for such a future.
CEO Andre Calantzopoulos says he would like to work with governments toward the phaseout of conventional cigarettes. “Our ambition is to lead a full-scale effort to ensure that noncombustible products ultimately replace cigarettes to the benefit of adult smokers, society, our company and our shareholders,” he explained as PMI opened its heated-tobacco products factory in Italy last year.
PMI is not alone among tobacco companies in wanting to get rid of the product that accounts for some 90 percent of global tobacco sales. Swedish Match’s official slogan is “A world without cigarettes,” while Reynolds American campaigns to “transform tobacco”—away from combustibles, that is. Other tobacco companies have been making similar noises about the need to move beyond traditional cigarettes.
It’s easy to be cynical about such statements—and, sure enough, anti-tobacco groups have been quick to express their reservations. With the exception of Swedish Match, which sold its cigarettes business in 1999, the major tobacco firms continue to derive the vast majority of their business from combustible cigarettes, a situation that is likely to continue for the foreseeable future, regardless of how successful the next-generation products prove to be.
Nonetheless, the commitments expressed by PMI and other tobacco firms should be welcomed because, ultimately, they represent the best hope of minimizing the health problems associated with tobacco use. While tax hikes, ad bans and ever more repulsive health warnings have contributed to a decline in smoking, a core group of smokers stubbornly refuses to kick the habit, either because they can’t or because they don’t want to.
Such users need to be offered a less risky alternative, and tobacco companies, with their profound understanding of products and consumers, are now in a good position to offer it. True, past smoking alternatives have come to nothing because they didn’t provide consumers the desired satisfaction. But technology has evolved to overcome these shortcomings—witness the success of e-cigarettes and tobacco-heating products such as iQOS.
A tobacco company pursuing the end of cigarettes may sound strange, even suspicious. However, the recent alignment of commercial, consumer and public health interests provides an unprecedented opportunity. As more smokers embrace next-generation products and reduce their exposure to the toxic byproducts of combustion, critics will grasp that the apparent contradiction is in fact a perfectly sensible long-term strategy.
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