Category: Business

  • IQOS Driving Momentum and Opportunity for PMI

    IQOS Driving Momentum and Opportunity for PMI

    Jacek Olczak

    Presenting at the Goldman Sachs Global Staples Forum on May 18, Philip Morris International CEO Jacek Olczak highlighted the next steps in the company’s strategy to becoming a majority smoke-free company in terms of net revenue by 2025.

    Olczak highlighted IQOS’ strong and accelerating topline momentum and potentially lucrative opportunities to expand beyond nicotine into broader lifestyle/wellness markets, such as high-margin botanicals and respiratory drug delivery.

    IQOS added more than 1.5 million users in the first quarter of 2021, according to Olczak—well above its historical average of 1 million new users per quarter. Robust conversions at 70 percent to 80 percent continue to dwarf the average conversion rates of many vapor products, which are in the mid-teens.

    The heat-not-burn device is now available in 66 markets, with a user base of 19.1 million, of which 14 million have stopped smoking and fully converted to IQOS.

    Olczak was particularly excited about the launch, scheduled for the second half of 2021, of PMI’s ILUMA IQOS product, which he believes could drive even higher conversion rates and margins as PMI continues to leverage its fixed cost base on IQOS while streamlining its customer acquisition and retention.

    Olczak also reviewed management’s ongoing efforts to digitalize and simplify business processes, including PMI’s commercialization strategies around IQOS. According to him, these efforts have already yielded $60 million of gross savings in selling, general and administrative expenses toward management’s target of $1 billion in 2021–2023.

    Olczak believes that PMI’s digitalization efforts will not only further reduce the cost of acquiring and retaining new users and ultimately drive more profitable growth but also accelerate conversion and customer acquisition, especially with the eventual global rollout of PMI’s digital customer experience.

    Olczak also touched on PMI’s longer term opportunities beyond heat-not-burn and vaping, including nicotine pouches and next-generation devices.

    Management is also looking into adjacencies, such as broader lifestyle/wellness markets, such as high-margin botanicals (including pure CBD) and respiratory drug delivery. The company aspires to achieve at least $1 billion in incremental net revenue from its beyond nicotine efforts by 2025.

    Olczak expressed optimism about PMI’s competitive advantages in terms of its capabilities around product safety and efficacy and validating/substantiating scientific claims.

  • BAT Intends to Produce HNB Products in Croatia

    BAT Intends to Produce HNB Products in Croatia

    Photo: burnel11

    British American Tobacco (BAT) will invest HRK200 million ($32.07 million) to produce heated-tobacco products (HTPs) at its factory in Kanfanar, Croatia, reports Total Croatia News.

    The multinational revealed its plans during a May 12 visit to its facility by Prime Minister Andrej Plenkovic.

    “By expanding production in Kanfanar and opening a hub in Rijeka, we are continuing with BAT’s significant investments in Croatia,” said BAT Adria director Zvonko Kolobara.

    “With the introduction of production lines for new product categories, Croatia is additionally strengthening its position on the global map of production sites in the tobacco industry. We are continuing to expand our selection for consumers in Croatia.”

    The increased capacity in Kanfanar will help BAT meet growing demand for HTPs in Europe and northern Africa.

    Plenkovic expressed satisfaction at BAT’s continued investments in Kanfanar.

    “The new HRK200 million investment in new products means a new impetus, enthusiasm and a new generator of business and with that, a contribution to Croatia’s economy,” he said.

    “The company employs 1,600 people, and another 800 cooperate closely with BAT and make a living that way. The investment plans have been coordinated with their headquarters in London, and all the employees at the factory will be satisfied while the entire economy of Istria County will benefit from BAT’s operations.”

    The new HRK200 million investment in new products means a new impetus, enthusiasm and a new generator of business and with that, a contribution to Croatia’s economy.

    Andrej Plenkovic, prime minister, Croatia

    In June 2020, BAT suggested it might relocate its Kanfanar factory to another country due to unfavorable business conditions. The government then embarked on a campaign to keep the multinational in Croatia.  

    Plenkovic stressed that the new investment reflected Croatia’s good business climate, not government pressure.

  • Vaping Industry Gets Surveyed About Logistics

    Vaping Industry Gets Surveyed About Logistics

    Photo: Andrey Popov

    The U.K. Vaping Industry Association (UKVIA) has launched an online logistics survey for the vaping industry.

    This action follows the decision of several delivery companies to stop carrying shipments of vaping products.

    Reports have involved leading providers such as DHL, UPS and FedEx, resulting in varying degrees of disruption to deliveries in recent months. The UKVIA is keen to learn if any disruption is affecting products imported from countries within the European Union or if products imported from China and the USA are also being held up.

    “The UKVIA is extremely concerned to hear of any disruption to deliveries of vaping products experienced by our members or any other businesses in the sector,” said John Dunne, director general of the UKVIA.

    “We will be closely looking into the response to this survey, to gauge the severity of the problems faced by businesses. The UKVIA will then be in a better position to take up these concerns on behalf of our members and the wider industry. I would encourage everyone eligible to take part in the survey or to get in contact with the UKVIA directly to flag up any individual logistics issues”

    The survey is at www.surveymonkey.co.uk/r/2YYZYJW.

  • Turning Point Brands Invests in Marley CBD Maker, Docklight

    Turning Point Brands Invests in Marley CBD Maker, Docklight

    Turning Point Brands (TPB) has announced an $8.7 million strategic investment in Docklight Brands, a pioneering consumer products company with brands including Marley Natural cannabis and Marley CBD. In addition, TPB has obtained exclusive U.S. distribution rights for Docklight’s Marley CBD topical products. The investment into Docklight Brands’ Series A offering comes with certain follow-on investment rights.

    As a result of this transaction, Turning Point Brands now has access to two iconic names in cannabis: Bob Marley and Zig-Zag. The Marley CBD skincare line, which includes after-sun, hand cream, lip balm, balm and roll-on products, combines tropical botanicals with hemp-derived CBD and is currently available nationwide in the U.S. in over 12,000 stores including select 7-Eleven, Circle K, Safeway and Dollar General locations, with additional availability expected through TPB’s partner network.

    The company’s investment into Docklight will also support the growth of the broader Marley CBD line, including Marley Mellow Mood teas, Marley wellness shots and Marley chocolate squares as well as Marley Natural THC products, which are produced and sold under license agreements in Canada, Jamaica and select U.S. states.

    “Our goal is to build an expansive portfolio of the most innovative brands in the cannabis industry and to distribute these products across our vast partner network,” said Larry Wexler, CEO of Turning Point Brands, in a statement.

    We are confident our strategic relationship with Turning Point Brands will greatly enhance both the visibility and availability of the Marley products across TPB’s extensive distribution network.

    Damian Marano, CEO, Docklight Brands

    “We reach consumers where they are most comfortable, selling products to distributors, selling to stores directly and interfacing with consumers one-on-one via e-commerce. Adding Marley products to our portfolio alongside our legacy Zig-Zag brand marks yet another milestone as we continue to leverage our brands and expand our distribution infrastructure.”

    “Given our shared focus on branded products, we are excited to expand the reach of the iconic Bob Marley brand. We are confident our strategic relationship with Turning Point Brands will greatly enhance both the visibility and availability of the Marley products across TPB’s extensive distribution network,” said Damian Marano, CEO of Docklight Brands.

  • Bidi Vapor Expansion Now 11 International Markets

    Bidi Vapor Expansion Now 11 International Markets

    Credit: Bidi Vapor

    Bidi Vapor successfully completed the regulatory process to enter seven additional international markets, bringing the total of new international countries open for distribution to 11.

    These new international markets include Spain, France, Italy, Germany, the Netherlands, Austria and the Czech Republic. Previously, on March 31, 2021, Kaival Brands announced that Bidi Vapor obtained market authorization for four countries: Australia, New Zealand, Russia and the United Kingdom.

    “We are very excited about pursuing our international opportunities,” said Niraj Patel, CEO of Kaival Brands, in a statement, noting how the countries posed both challenges and opportunities that the company is ready to take on.

    Kaival Brands is the exclusive distributor for Bidi Vapor’s primary offering, the Bidi Stick, which is the subject of a premarket tobacco product application now under review with the U.S. Food and Drug Administration.

  • Blackbriar and Beard Management Agree to Terms

    Blackbriar and Beard Management Agree to Terms

    Photo: Tobacco Reporter archive

    Blackbriar Regulatory Services (BRS) has entered into a regulatory services, manufacturing and distribution agreement with Beard Management. BRS will become Beard’s exclusive manufacturer and a distributor for the company’s Beard Vape Co. and The One brands’ nicotine products and will take over the pre-market tobacco product application (PMTA) process for these products. As a part of the agreement, BRS will co-brand a range of PRISM e-liquid products that are complimentary to Beard’s product line, which are currently awaiting regulatory PMTA approval and being manufactured under license by BRS.  

    “We are honored that Beard, a globally recognized and respected brand, has put their trust in BRS as a key strategic partner moving forward,” said Russ Rogers, CEO of BRS. “Our combination of ISO certified cleanroom production and analytical lab facilities and industry leading FDA regulatory application team puts us in a position to provide a very compelling value proposition to customers who are making the investment to be in this industry long-term.

    “Beard’s unwavering commitment to high quality products and regulatory practices makes them a great partner and we could not be more excited to provide them with a wide array of business solutions to help them ensure that their amazing brand continues to grow and remains a long-term part of this rapidly changing and maturing industry.

    Partnering with BRS ensures the longevity of our brands

    Casey Bates, CFO, Beard

    BRS will now become Beard’s agent of record with the U.S. Food and Drug Administration and will oversee the process of providing to the FDA any additional regulatory and testing work required for Beard’s current PMTA’s to scientifically prove its products are appropriate for the protection of public health.In addition, BRS will be manufacturing all of Beard’s 45 e-liquid products, including the Beard Vape Co. and The One brands. National and international distribution and all newly required domestic shipping registrations and compliance will also be handled by BRS.

    “Partnering with BRS ensures the longevity of our brands,” said Casey Bates, CFO at Beard. “With BRS’ proven competencies as a leader in nicotine e-liquid product manufacturing and regulatory services, it puts us in the perfect position moving forward. The merging of our core competencies will allow Beard to continue delivering great products and great customer service to adults looking for tobacco alternatives. We couldn’t have done this on our own and we have a long list of people to thank, both at Beard and BRS, for making this possible.”

  • Vape Shops in England and Wales to Reopen on April 12

    Vape Shops in England and Wales to Reopen on April 12

    Photo: Oxford Vapours

    Vape shops across England and Wales are expecting huge numbers of customers—Including many smokers seeking expert help and guidance to quit—when they reopen on Monday.

    More than 2,000 vape shops across the U.K. are preparing to reopen their doors to customers again on April 12 after the government confirmed the next stage of lifting lockdown restrictions will proceed as previously announced.

    Non-essential retail outlets including vape shops will be able to reopen their doors from Monday across England and Wales. In Scotland however, non-essential retail must remain shut until Monday, April 26.

    The U.K. Vaping Industry Association (UKVIA) welcomes the relaxing of restrictions as the latest step on the government’s roadmap out of lockdown, especially as this coincides with the hugely successful, month-long awareness campaign VApril.

    Run by the UKVIA and now in its fourth year, VApril aims to help educate smokers on how to successfully quit conventional cigarettes by transitioning to vaping.

    The closure of retail outlets has been especially difficult for some users of vaping products who have struggled to get hold of equipment and advice.

    John Dunne, director general, UKVIA

    This year’s VApril campaign kickstarted with a webinar featuring leading industry experts including UKVIA Director General John Dunne, All Party Parliamentary Group for Vaping Chair Mark Pawsey, Global Legal and Regulatory Strategist at Andina Gold Corp. Patricia Kovacevic and former Director of Action on Smoking and Health Clive Bates.

    “The closure of retail outlets has been especially difficult for some users of vaping products who have struggled to get hold of equipment and advice that they needed and who might well have returned to smoking over the past few months,” said Dunne.

    “I am so pleased that the wider vape retail sector in England and Wales is now able to reopen its shop doors on Monday 12th April and begin trading again.

    “Given the evidence that vaping is at least 95 percent less harmful than smoking according to Public Health England, it is vital that smokers are now given all the advice they need on making the switch from smoking both in store and using online advice including the VApril website.”

    We are fully committed to achieving a tobacco free country by 2030 and, with our expert staff now able to open back up the stores, we are ready to help any smoker make the switch.

    Doug Mutter, director, VPZ

    “We are delighted to have our stores reopen after another lengthy lockdown,” said Doug Mutter, director at VPZ said. “From the click-and-collect services alone, we have already seen a huge number of smokers coming forward looking for advice and guidance on their quit journey.

    “It has been over a year now that smokers have been struggling with getting expert advice and the selection of products they need from specialist retailers. Vaping retailers have been the last remaining service where people can get help and advice on how best to quit smoking, so we are fully expecting a very busy couple of months.

    “We are fully committed to achieving a tobacco free country by 2030 and, with our expert staff now able to open back up the stores, we are ready to help any smoker make the switch.”

    “We are so pleased to be able to give the service we are renowned for to our local customers once again,” said Dan Greenall, managing director at Oxford Vapours.

    “Like many other businesses, despite managing to stay afloat during the past 12 months we have seen a huge drop in aiding smokers on their journey to switching to a less harmful alternatives.

    “Vaping is personal and guidance is essential to ensure a successful switch attempt. Education through bricks and mortar retail is the best way to help people looking to make a switch to the less harmful alternative.

    “This couldn’t have come at a better time for smokers looking to quit with the UKVIA recently launching VApril 2021—a dedicated educational campaign to help inform adult smokers of the options available to them and to support those wanting to switch on to vaping.

    “Now we can reopen our stores we are truly able help people make the switch and support the Government’s efforts for a smokefree England by 2030.”

     

  • Kaival Brands Appoints New Board Members Ahead of IPO

    Kaival Brands Appoints New Board Members Ahead of IPO

    Kaival Brands Innovations Group has appointed Paul Reuter, Carolyn Hanigan and Roger Brooks to its board of directors.

    In addition to gaining the experience and judgment that the new members will bring to the board, their appointments are intended to ensure the company complies with certain corporate governance rules ahead of its planned Nasdaq uplisting.

    “We are very pleased that Paul, Carolyn and Roger have agreed to join us as new members of the board,” said Niraj Patel, CEO of Kaival Brands, in a statement. “Coming off a remarkable year that demonstrated the strength of our team and products, these three individuals are joining the company at an exciting time. We look forward to benefiting from their diverse backgrounds and respective expertise.”

    Reuter brings nearly five decades of industry experience in small box retail as a journalist, editorial director, entrepreneur and speaker. He has launched two businesses, including MidWest Retail Group, where he served as chairman and founding partner from April 2013 through June 2019. He is also the founder of Kreative Collaborations, an industry consultancy.

    Prior to her retirement, Hanigan was the president of Reynolds American Innovation Co., an operating company of Reynolds American Inc. (RAI). Hanigan led the global vapor collaboration with British American Tobacco (BAT) up until RAI was acquired by BAT in 2017.

    Coming off a remarkable year that demonstrated the strength of our team and products, these three individuals are joining the company at an exciting time.

    Niraj Patel, CEO, Kaival Brands

    She was the architect of RAI’s U.S. reduced-risk products strategic direction to further the vision of transforming tobacco. Under her leadership, RAI prepared both the U.S. commercial execution and regulatory applications for the Glo tobacco-heating products, the Velo nicotine pouches, and the Alto, Ciro, Vibe and Solo nicotine vaporizers.

    Brooks is currently the chairman, treasurer and co-founder of Abierto Networks. Prior to his roles at Abierto Networks, from 1998 to 2008, Brooks was the lead independent director and member of the compensation and audit committees for Moldflow Corp. From 2017 to 2019, Brooks served as an independent director of Lytron Incorporated.

    Kaibal Brands recently reached $100 million in revenues.

  • Swisher and E-Alternative Solutions Expand Partnership

    Swisher and E-Alternative Solutions Expand Partnership

    Photo: EAS

    Swisher and E-Alternative Solutions (EAS) have expanded their partnership to support the marketing, sales and distribution of EAS’s Leap and Leap Go vapor brands. Both companies will remain separate entities with EAS benefitting from the additional support and strength of Swisher’s world-class sales and marketing organization.

    Jeffrey Brown, formerly vice president of sales for EAS, has been named general manager of EAS, and will take the lead in the evolution of the partnership.

    “Jeff is a well-respected leader with more than three decades of industry experience, and as general manager, he is the natural choice to take the EAS business to the next level and drive our respective brand expansion goals,” said John Miller, president and chief executive officer of Swisher, in a statement. “In the short term, the expanded partnership between EAS and Swisher will remain transparent to our valued customer base, and we will be following up with additional details as they become available.”

    I look forward to working with the Swisher sales and marketing teams and taking the Leap and Leap Go brands to the next level.

    Jeffrey Brown, general manager, EAS

    “I couldn’t be more excited about this arrangement and look forward to working with the Swisher sales and marketing teams and taking the Leap and Leap Go brands to the next level,” said Brown. “EAS was built from the ground up to prosper in the highly regulated tobacco environment, and with the bench strength of the Swisher sales and marketing teams, we have the power to broaden our reach and expand the distribution of these great brands,” he added.

    Over the past several years, Swisher has continued to expand its offerings to include smokeless tobacco products, premium cigars, and modern oral nicotine products to appeal to diverse and changing consumer tastes. Broadening its strategic partnership with EAS is another step toward becoming a more consumer-centric company.

  • Kaival Expands Distribution for Bidi Stick to 46,000 Stores

    Kaival Expands Distribution for Bidi Stick to 46,000 Stores

    Kaival Brands has three new distribution partners for its Bidi Vapor products: Smoker Friendly International, Avail Vapor and Hilmes Distributing. These three additional distributors push the potential U.S. store count for Bidi Vapor products above 46,000, up from 10,000 in 2020.

    According to Bidi Vapor, distributor interest in its products has increased greatly following its receipt of a premarket tobacco product application filing letter from the Food and Drug Administration. As the company’s product moves into the substantive review phase, Bidi Vapor anticipates it will continue to update investors on additional new distribution agreements.

    “These new partners will become a large new revenue stream for Bidi and Kaival,” said Niraj Patel, CEO of Kaival Brands, in a statement. “It is important to note our 2020 sales of just under $100 million were achieved with a distribution network of 10,000 stores and in less than 10 months of operation.

    “Today’s new distribution partner announcements bring our network to over 46,000 store locations. The strength and breadth of these partnerships fuels our confidence in our ability to meet or exceed our 2021 projection of $400 [million] to 450 million in sales.”