Tag: Philip Morris International

U.S. Market Poised for Disruption With IQOS Debut

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The American tobacco market is poised for disruption as Altria Group’s exclusive U.S. distribution rights to Philip Morris International’s IQOS heat-not-burn product expires on April 30, reports The Wall Street Journal. After this date, PMI will be free to compete in the U.S. with its top noncigarette brand.
PMI hopes IQOS can help it grab a 10 percent share of the lucrative U.S. cigarette and heated-tobacco market by roughly 2030, representing an additional $2.2 billion in annual earnings before interest, taxes, depreciation and amortization, according to Stifel analysts.
Altria, with its 50 percent share of the American cigarette market, has a lot to lose if PMI can persuade more smokers to switch to noncombustible alternatives.
In recent years, U.S. smokers have become more receptive to alternative nicotine delivery methods. Last year, 40 percent of all nicotine products sold in the U.S. were smoke-free offerings such as e-cigarettes and oral nicotine pouches. The share of traditional cigarettes, meanwhile, declined to 60 percent last year from 80 percent in 2018.
If the trend continues, Americans will be more likely to reach for a vape or nicotine pouch than a cigarette within three years.
Already earning some 40 percent of its net revenue from smoke-free products, PMI needs not worry about the dwindling number of U.S. smokers because it doesn’t sell cigarettes in America.
Altria, by contrast, still relies heavily on combustible cigarettes, which currently account for 85 percent of its sales. Its comparatively low exposure to the smokefree market includes brands such as On! oral nicotine pouches and Njoy e-cigarettes. The company also has a joint venture with Japan Tobacco to launch Ploom heated tobacco sticks in the U.S. and is working on its own heat-not-burn brand.
A badly timed bet on Juul Labs saddled the company with a $12.5 billion loss.
On the flipside, Altria has a strong U.S. distribution network, which it can leverage to promote its brands—a considerable advantage as the point of sale is one of the few places where tobacco companies are still allowed to advertise their products.
Altria can also harness data to defend its patch. The tobacco giant is integrated into many retailers’ loyalty programs, allowing it to monitor what shoppers are buying.
April 19, 2024
Job Ads Suggest IQOS Set to Debut in Austin, Texas

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The resolution of an IP dispute with BAT has removed a major hurdle to selling the product in the U.S.
Philip Morris International is preparing to launch its IQOS heated-tobacco device in Austin, Texas, USA, reports U.S. News. The city will be a testing ground for PMI’s re-entry into the United States after the company resolved an intellectual property dispute with British American Tobacco that had prompted the International Trade Commission to ban imports of IQOS in the United States.
PMI previously announced that it planned to launch IQOS in four cities in two U.S. states beginning with one city in the second quarter before a larger rollout in 2025. The company did not, however, release details.
According to U.S. News, LinkedIn job advertisements suggest that PMI is planning to launch the product in Austin. The advertisements were posted this month and include positions such as field sales representatives, territory managers and retail sales advisors.

The U.S. would be a significant market for IQOS. Euromonitor estimates that total U.S. nicotine sales excluding nicotine-replacement therapies were $143.6 billion in 2022. Cigarettes accounted for the majority of sales, but Euromonitor predicts that their value will drop by 30 percent by 2027 and the value of smoking alternatives such as e-cigarettes and nicotine pouches, will increase by 36 percent in the same period.

Investors are waiting to see if PMI can create a heated-tobacco market in the U.S., where vaping is dominant.
According to Brett Cooper, managing partner and analyst at equity research firm Consumer Edge, Texas offers an interesting trial market due to broad demographics. He noted that diverse cities like Austin, Houston and Dallas provide access to a wide range of consumer groups.

U.S. Centers for Disease Control and Prevention data shows that tobacco taxes in Texas are relatively low, with the excise tax rate on a pack of cigarettes standing at $1.41 in September 2023.
In January, Texas introduced new e-cigarette laws, banning products that resemble food or that include symbols or celebrities targeted at minors or that depict cartoon-like fictional characters.
PMI believes IQOS can capture a 10 percent share of the U.S. tobacco and heated-tobacco unit volume by 2030.

March 29, 2024
Japan: PMI Launches Latest IQOS, the Lumina i

Photo: Ned Snowman
Philip Morris International has launched IQOS Iluma i, the latest and most innovative addition to its growing portfolio of smoke-free products, in Japan. The launch marks the 10-year anniversary of IQOS, which debuted in Nagoya, Japan, in 2014.
“We leverage science, world leading brands and commercial capabilities to provide better alternatives to our consumers. This anniversary provides an opportunity to renew our smoke-free vision and our ambition for over two-thirds of our total net revenue to come from smoke-free products by 2030,” said PMI CEO Jacek Olczak in a statement.
“IQOS Iluma disrupted the category by introducing induction-heating technology that heats tobacco from within, to provide a consistent taste experience, no tobacco residue, and no need to clean the device. Today, we take IQOS to new heights, with the launch of IQOS Iluma i—the latest innovation in our smoke-free portfolio, offering a range of advanced features for a clean, seamless, and more flexible experience.”
The IQOS Iluma i series offers three devices in Japan: IQOS Iluma i PRIME, IQOS Iluma i and IQOS Iluma i ONE. All three devices bring a range of adaptable new features.
The new touch screen on the device’s holder allows users to see experience-relevant information quickly and easily. To personalize the experience, IQOS Iluma i introduces a new pause mode. By swiping up or down on the touch screen, users can pause and resume their consumption according to their preferences.
The new IQOS Iluma i also includes smart features that help prolong the lifespan of the holder’s battery. Furthermore, the door for IQOS Iluma i is made from aluminum produced with renewable energy and the inner textile layer of IQOS Iluma i’s Prime leather-like wrap is made of 100 percent recycled plastic.
“IQOS Iluma i is our most innovative offering to date and the new flagship in our portfolio of scientifically substantiated, heat-not-burn smoke-free systems,” said Bertrand Bonvin, president heat-not-burn platforms at PMI. “Like previous IQOS devices, it emits, on average, 95 percent lower levels of harmful chemicals compared with cigarettes. We are proud that consumer feedback continuously fuels our innovation, and IQOS Iluma i is a testament to that.”
March 13, 2024
PMI Sees IQOS Surpass Marlboro Brand in Revenue

Photo: Arkadiusz Fajer
Philip Morris International reported net revenues of $9.05 billion for the fourth quarter and net revenues of $35.17 billion for fiscal year that ended Dec. 31, 2023. On a reported basis, the figures were up 11 percent and 10.7 percent, respectively, over the comparable 2022 periods.
Performance was driven by revenue growth in both the combustible cigarette business, where pricing offset reduced volumes, and the company’s smoke-free operations, which continued to increase their share of the company’s business mix.
“We are pleased that smoke-free products reached nearly 40 percent of our total net revenues and over 40 percent of our gross profit in the fourth quarter,” said PMI CEO Jacek Olczak in a statement.
“This was led by the continued growth of IQOS, which has now surpassed Marlboro in terms of net revenues, confirming its position as the leading premium nicotine brand less than 10 years from launch. The fourth quarter also marked the first anniversary of our combination with Swedish Match, which delivered very strong results in 2023 driven by the stellar U.S. performance of ZYN.”
PMI shipped 116.3 million cans of ZYN in the fourth quarter of 2023, representing growth of 78.2 percent versus fourth-quarter 2022 Swedish Match shipments of 65.3 million cans.
“We are entering 2024 with strong momentum, and we expect it will be another year of excellent performance underpinned by an acceleration in organic smoke-free net revenue and profit growth,” said Olczak.
PMI also expects to benefit this year from a recent settlement with British American Tobacco that resolves all ongoing patent infringement litigation between the parties related to heated tobacco and vapor products. The deal allows each party to innovate and introduce product iterations.
February 8, 2024
PMI and BAT Settle Patent Infringement Disputes

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Philip Morris International and British American Tobacco have settled their ongoing intellectual property disputes relating to heated tobacco and vapor products.
The cigarette makers had been fighting a multi-front patent battle. BAT, which makes Vuse vapes and Glo heated tobacco devices, was ordered to pay PMI millions of dollars after losing one case, while PMI has been blocked from importing its flagship heated tobacco device IQOS into the United States as part of another.
The settlement includes non-monetary provisions between PMI and BAT that resolve all ongoing global patent infringement litigation, encompassing all related injunctions and exclusion orders, and prevents future claims against current heated tobacco and vapor products. The settlement also allows each party to innovate and introduce product iterations.
“We are pleased that this matter has been resolved to the mutual satisfaction of both parties,” said PMI CEO Jacek Olczak in a statement. “There is a clear and growing global desire from adults who smoke to choose from a range of smoke-free products, and we believe continued reduced-risk category innovation can accelerate declines in the harms associated with smoking to the benefit of consumers and public health at large as we continue PMI’s journey to end the sale of cigarettes.”
“This agreement is an important step forward for BAT and all our stakeholders,” said BAT CEO Tadeu Marroco in a statement. “Having already built two £1 billion [$1.28 billion] brands in Vuse and Glo, the potential for their continued impact on tobacco harm reduction is clear. I am delighted that this settlement will allow BAT to focus on developing innovative solutions that provide adult consumers with a greater choice of reduced risk products in support of our ‘A Better Tomorrow’ purpose. By doing so, we will help build a smokeless world for the benefit of consumers, investors and society as a whole.”
February 2, 2024
Activists Protest ‘Misguided’ Zyn Pouch Probe

Photo: Swedish Match
U.S. Senate Majority Leader Chuck Schumer’s call on the U.S. Food and Drug Administration and Federal Trade Commission to investigate the marketing practices and health effects of Philip Morris International’s Zyn nicotine pouch brand provoked a backlash among advocates of tobacco harm reduction.
“The American people have seen this movie before with less harmful e-cigarettes,” said Tony Abboud, executive director of the Vapor Technology Association (VTA).
“Congressional leaders yell at unelected bureaucrats at the FDA who scurry to remove products from the market that offend their sensibilities—even though those products are less harmful than traditional cigarettes, and have been proven to help people quit smoking deadly cigarettes altogether.
“These misguided actions deprive American adults of less harmful, non-combustible, and non-tobacco nicotine products that are a proven alternative to combustible cigarettes and that the largest clinical trial in the U.S. has found to cause them to quit smoking even if they have no intention to quit cigarettes.
“There is already a de-facto ban on e-cigarettes. Sen. Schumer simply wants this ban extended to other products he and the Washington establishment deem undesirable.
“As with e-cigarettes, Sen. Schumer falsely asserted that Zyn products are popular with younger users. Yet, the National Youth Tobacco Survey data demonstrates that only 1.5 percent of youth have even tried nicotine pouches. When will the federal government stop hiding behind an excuse that has been disproven by their own data?
“VTA stands with Zyn, and the makers of modern oral nicotine pouches, in the fight against arbitrary and capricious government action. Because cigarettes remain the No. 1 cause of preventable death and disease in the U.S., VTA insists on broad access to a wide variety of non-combustible products to preserve freedom of choice for adults who want to use nicotine – and to provide access to proven harm-reduction and smoking-cessation options essential for saving American lives.”
Earlier, Schumer’s call for an investigation prompted PMI to publish a video clarifying its marketing practices.
January 28, 2024
PMI Prevails in Investors’ Lawsuit Over IQOS Studies

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A U.S. appeals court on Dec. 26 dismissed a securities fraud class action brought by shareholders against Philip Morris International, reports Bloomberg Law.
Investors accused the tobacco manufacturer of misleading them about the methods and results of IQOS clinical studies presented to the U.S. Food and Drug Administration. PMI sought the approval so that its former parent company, Altria Group, could sell the device within the U.S.
Investors also targeted company statements about projected IQOS sales in Japan, the only country at that time where PMI sold the line of products nationwide.
The U.S. Court of Appeals for the Second Circuit ruled that statements by PMI and its executives that the IQOS studies were “rigorous,” “the best science,” and “very advanced” were inactionable puffery. The court rejected the investors’ argument that such statements could be proven true or false.
Optimistic remarks about sales performance in Japan, meanwhile, were allowable forward-looking statements, the court ruled.
December 27, 2023
PMI to Introduce Heated, Tobacco-Free LEVIA Sticks

Photo: PMI
Philip Morris International is set to introduce LEVIA, a tobacco-free product boasting a cellulose-based composition with nicotine, aiming to reduce harm significantly compared to conventional cigarettes.
In an interview with Daily News Egypt, Gizelle Baker, PMI’s vice president of global scientific engagement, emphasized the company’s commitment to offering satisfying alternatives to smokers, understanding the complexity of breaking the smoking habit. PMI’s strategy, she noted, involves varied device types, price points, flavors, and addressing rituals associated with smoking.
Designed as a nicotine-delivery system resembling e-cigarettes but without tobacco, LEVIA emits 99 percent fewer harmful chemicals than cigarettes, according to PMI. Paired with the ILUMA device, LEVIA aims to provide a sensory smoking experience while minimizing health risks. PMI’s approach to reducing secondhand smoke involves eliminating smoke production by not burning tobacco.
Bakes said PMI envisions a smoke-free future by eliminating combustion, not necessarily tobacco or nicotine. The company aims to diversify its portfolio beyond smoking-related products into wellness and healthcare sectors, leveraging expertise gained from tobacco research. This transition includes exploring new smoke-free products beyond oral, tobacco-heating systems and vape options, according to Baker.
The company’s acquisitions in drug manufacturing indicate a shift towards diverse offerings beyond tobacco. PMI foresees future innovative products based on scientific advancements and customer satisfaction across both device and consumable categories.
December 26, 2023
PMI Names Parman as U.S. Communications Officer

Photo: PMI
Philip Morris International has appointed Travis Parman as vice president and chief communications officer of the U.S.
“We are thrilled that Travis is joining us in our bold ambition to deliver a smoke-free future in the United States. We’re on a mission to replace cigarettes—the most harmful form of nicotine consumption—as soon as possible with science-based smoke-free alternatives that are a better choice than continued cigarette use,” said Stacey Kennedy, president of the Americas region and CEO of PMI’s U.S. business, in a statement. “With his passion for positive change and deep communications experience in the U.S. and internationally, Travis will be a valuable addition to our leadership team.”
Parman joins PMI from AppHarvest, a tech-driven sustainable food company based in Kentucky, where he served as chief communications officer since 2020. He previously held multiple roles with the Renault-Nissan-Mitsubishi Alliance in Paris; Nashville; and Yokohama, Japan—most recently as vice president of international communications and global engagement.
Prior to his work with the alliance, he held public relations and communications leadership roles at General Motors, Ally Financial and PulteGroup. Parman holds a master’s degree in communications management from the Newhouse School of Public Communications at Syracuse University and a bachelor’s degree in communications from the University of Tennessee.
“Joining PMI at such a pivotal moment in the company’s journey toward a smoke-free future provides the perfect opportunity to drive meaningful change, which has been a hallmark throughout my career as a communicator,” said Parman.
November 27, 2023
PMI Applies to Sell IQOS Iluma in the U.S. Market

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Philip Morris International Oct. 20 submitted premarket tobacco product applications (PMTAs) and modified risk tobacco product applications (MRTPAs) for IQOS Iluma heated tobacco products with the U.S. Food and Drug Administration (FDA).
IQOS Iluma products are PMI’s most-innovative heated tobacco products. They deliver substantially similar reductions in the formation of harmful and potentially harmful constituents as earlier versions of IQOS products authorized by FDA
According to PMI, IQOS Iluma has demonstrated higher rates of full switching by adults who smoke and improved consumer satisfaction in many countries.
IQOS Iluma products rely on a fundamentally different heating technology from previous versions of IQOS products and contain numerous technological advancements including improved device and battery longevity.
IQOS Iluma products are currently available in 27 markets internationally
PMI’s applications are supported by a thorough scientific assessment, including aerosol chemistry, in vitro toxicology, a pharmacokinetic study, and consumer perception and behavior studies, as well as the comprehensive scientific dataset generated with previous versions of the IQOS system
The IQOS Iluma devices operate on the Smartcore Induction System that heats tobacco from within Terea Smartcore Sticks—heated tobacco sticks designed to be used only with IQOS Iluma devices
PMI has submitted applications for three Iluma devices and five variants of the tobacco sticks: Terea Blue, Terea Green, Terea Sienna, Terea Bronze, Terea Amber

Internationally, IQOS Iluma products have demonstrated how ground-breaking consumer-centric innovation can lead more adults to stop smoking. We believe that same success can be replicated in the U.S.
Stacey Kennedy, president Americas and CEO of PMI’s U.S. business
“Tens of millions of American adults today smoke cigarettes and will likely continue to do so. They should have a range of scientifically substantiated better alternative nicotine products to choose from, and PMI is committed to providing them with new choices,” said Stacey Kennedy, president Americas and CEO of PMI’s U.S. business, in a statement.
“Internationally, IQOS Iluma products have demonstrated how ground-breaking consumer-centric innovation can lead more adults to stop smoking. We believe that same success can be replicated in the U.S. and drive a rapid decrease in smoking rates among adults. These are strong applications, and we urge the FDA to prioritize them for review.
“Since 2008 PMI has invested more than $10.5 billion to scientifically research, develop, and commercialize smoke-free products, an investment that was further bolstered last year through our acquisition of Swedish Match. We are focused on providing adults who smoke with alternatives that can reduce their risks compared with smoking and help make America cigarette-free.”
PMI will have the full rights to commercialize all IQOS products in the U.S. as of April 30, 2024, per the terms of an agreement with Altria Group, Inc. ending the companies’ commercial relationship covering IQOS in the U.S.
October 21, 2023