Author: Staff Writer

  • Kaival Brands Reaches $100 Million in Revenue

    Kaival Brands Reaches $100 Million in Revenue

    Kaival Brands Innovations Group reported significant revenue and profitability milestones in the quarter ended Jan. 31, 2021. The company achieved a cumulative $100 million in revenues since it commenced business operations in March 2020, despite revenue slowdowns during the fourth quarter of 2020 due to packaging and labeling updates.

    During the fourth quarter of 2020, the company and Bidi Vapor made the decision to wash out inventory and repackage the entire product line in an effort to go “above and beyond” U.S. Food and Drug Administration packaging and labeling guidelines.

    First quarter 2021 revenues were $37.3 million compared to revenues of $0 in the first quarter of 2020. “Given the significant expenses associated with infrastructure, startup costs, marketing, legal and many other business necessities, we are proud of our ability to reach profitability so early on in our development,” said Niraj Patel, Kaival’s president and CEO, in a statement.

    “The gross profit number provides a glimpse into our future net profits as we continue to scale the business in a smart and efficient operational manner.”

    The gross profit number provides a glimpse into our future net profits as we continue to scale the business in a smart and efficient operational manner.

    Niraj Patel, president and CEO, Kaival

    From a revenue perspective, February and March have benefited from the company’s new distribution partnerships as well as the rollout of the Bidi Pouch. As such, the company expects revenues to increase during the second fiscal quarter ending April 31, 2021. “Given our current visibility, we remain very confident in our full-year fiscal 2021 revenue guidance of $400 million to $450 million,” Patel said.

  • Korea Urged to Embrace Harm Reduction

    Korea Urged to Embrace Harm Reduction

    Economists have called on South Korea to develop risk-proportionate regulation for nicotine products.

    Speaking at the Western Economic Association International (WEAI) virtual conference, Kwon Ill-Oong, a professor at the Seoul National University Graduate School of Public Administration, argued for implementing an inflation-indexed tobacco tax.

    Kwon emphasized that tobacco taxes should be inflation-indexed like taxes on alcohol, with a different level of tax applied to products based on their levels of harm and price elasticities. Not only does an inflation-indexed tobacco tax raise consumer predictability; it also eases societal pushbacks from a sudden increase of the tax on tobacco.

    Woo-Hyung Hong, professor at the Hansung University Department of Economics, agreed that tobacco taxes should be differentially imposed based on a product’s economic external costs. According to him, the system should consider medical costs, loss of labor capital costs, costs from cigarette-related fires and “avoidance costs,” among others.

    Park Young-bum of Hansung University Department of Economics explored the current state and limitations of the current tobacco control policy in Korea and proposed harm reduction measures to encourage smokers to switch to less harmful products.  

    David Sweanor from the University of Ottawa urged South Korea to follow the example of New Zealand, which passed a bill acknowledging e-cigarettes as a less harmful alternative to combustible products. “It is time for Korea to implement a harm reduction policy like Western countries,” said Sweanor

    Created in 1992, the WEAI currently has more than 2,000 members.

  • Borgwaldt KC Presents New Vaping Machine

    Borgwaldt KC Presents New Vaping Machine

    Photo: Borgwaldt KC

    Borgwaldt KC has launched the NGX10, a 10-port linear vaping machine for next-generation products.

    Exceeding ISO 20768 and CRM 81 specifications with gas analyzer options to match the specifics of these products, the NGX10 is a new, professional, flexible, efficient and reliable member of Borgwaldt KC’s well-known analytical vaping machines.

    The NGX10 incorporates all the design and feature improvements specific to the emission testing of next-generation products.

    The machine can handle all device sizes and shapes. For more information, visit www.borgwaldt.com.

  • Zimbabwe Crop Value Estimated at $0.5 billion

    Zimbabwe Crop Value Estimated at $0.5 billion

    Photo: Taco Tuinstra

    Tobacco merchants are preparing to pay around US$500 million for Zimbabwe’s tobacco crop this year—significantly more than the US$440 million they shelled out last year, according to an article in The Herald, citing local industry officials.

    Auction floors are scheduled to open April 7 for the self-financed growers while the contract sales begin the following day.

    “We are well prepared for the marketing season,” said Tobacco Industry and Marketing Board Chairman Pat Devenish. “We are expecting a crop of 200 million kg and at an average price of US$2.50 per kg. We expect an estimate of around US$500 million.”

    This season, tobacco growers will get 60 percent of their earnings in foreign currency while the remaining 40 percent will be paid in local currency using the auction rate.

    One potential problem is looming in areas where cash-rich middlemen are trying to buy harvests at low prices for ready cash, which will present any contract farmer with legal problems when they come to deliver.

    To discourage such fly-by-night players, merchants must submit copies of legally binding contracts by Sept. 30 of every year and proof of inputs distributed either paid up invoices or payment plans with suppliers.

    Devenish said most merchants had met the requirements.

    Assembly member Ngoni Masenda warned farmers against selling to fly-by-night merchants as they stand to lose in the long run.

  • Investors Embrace Sting Free Snus

    Investors Embrace Sting Free Snus

    Bengt Wiberg (Photo: Sting Free)

    Sting Free AB has received SEK27 million ($3.1 million) through an ownership dispersion. Investors include Curt Enzell, inventor of the snus pouch and former head of research at Tobaksbolaget (Swedish Match).

    Sting Free has developed a product that prevents the familiar stinging sensation on the gum from snus and nicotine pouch consumption, widening the pool of potential consumers for snus and pouches (also see “Patching the Pouch,” Tobacco Reporter, July 2017).

    The technology is applicable to both snus and tobacco-free nicotine pouches and has already been successfully produced in prototype series with industrial and unmodified snus packaging machines. Swedish Match has signed a nonexclusive license agreement for the new technology and several other Nordic and foreign producers are expected to do the same soon.

    “The capital injection from the ownership dispersion enables the company to requisition national patents in about 40 countries, including all countries in Europe, as well as a capital base for coming industrial production,” said Sting Free CEO and founder Bengt Wiberg in a statement.

    “We are very happy that so many prominent people and companies have chosen to invest in Sting Free AB.”

    Sting Free’s innovation can make it easier for many to switch to snus, as the burning sensation often constitutes an obstacle for smokers to convert to snus.

    Curt Enzell, inventor of the snus pouch

    “Sting Free AB’s innovation can make it easier for many to switch to snus, as the burning sensation often constitutes an obstacle for smokers to convert to snus,” says Enzell.

    In a market survey with 660 male and female Swedish snus users, Sting Free found that 40 percent of the respondents dislike the stinging of snus. Only 11 percent of women and 17 percent of men enjoy the sensation. In empirical tests with adult nicotine users who had never tried snus or nicotine pouches before, nine out of 10 thought the burning sensation was unpleasant while an equally high proportion considered the identical contents in a Sting Free technology pouch to be enjoyable.

  • Innovia Sustainability Efforts Certified

    Innovia Sustainability Efforts Certified

    Photo: Innovia

    Innovia has expanded ISCC PLUS certification to its plants in Australia, Belgium and the U.K. This allows Innovia to produce its range of Encore sustainable films globally, supplying both certified renewable materials and certified circular material.

    “The sustainable team based in Wigton supported the work that the local cross functional plant teams undertook in very tight timescales,” says Paul Watters, product development manager of packaging at Innovia. “To achieve ambitious schedules meant they had to adopt a well-coordinated and collaborative team approach.”

    ISCC (International Sustainability and Carbon Certification) is an independent multi-stakeholder organization providing a globally applicable certification system for the sustainability of raw materials and products.

    Innovia has also developed its own internal life cycle analysis program, which enables it to measure key sustainability metrics, including carbon footprint and fossil scarcity on a cradle to gate basis.

    “These additional certifications show our commitment to increasing our manufacturing footprint of certified renewable and recycled content films in line with customer demand for these types of products,” said Watters.

  • Swedish Match Releases Annual Report

    Swedish Match Releases Annual Report

    Photo: Swedish Match

    Swedish Match has released its annual report for 2020.

    Highlights included record sales and operating profit, driven by strong traction for ZYN nicotine pouches in the U.S., and double-digit operating profit growth in local currencies for the smokefree and cigar product segments.

    In local currencies, sales increased by 17 percent. Reported sales increased by 13 percent to SEK16.7 billion ($1.96 billion), despite significant strengthening of the Swedish krona during the year versus the U.S. dollar, the Norwegian krona and the Brazilian real.

    In local currencies, operating profit from product segments increased by 28 percent. Reported operating profit from product segments increased by 23 percent to SEK7.16 billion.

    Operating profit amounted to SEK6.99 billion and profit after tax was SEK4.89 billion.

    We enter 2021 as a stronger, yet different, company.

    Lars Dahlgren, president and CEO, Swedish Match

    “On a local currency basis, all product segments delivered top-line and operating profit growth for the year,” said Lars Dahlgren, president and CEO of Swedish Match. “The U.S. smokefree business contributed with significant year-on-year sales and profit growth throughout the whole year. For cigars in the U.S. and for the first half, the year-on-year financial development was negatively impacted by Covid-19, but over the course of the second half of 2020, we saw an impressive recovery with accelerated volumes, sales and operating profit growth.”

    Dahlgren expressed optimism about 2021. “We enter 2021 as a stronger, yet different, company,” he said. “The success that we experienced in 2020 would not have been possible without the tireless dedication and ingenuity of our employees, the long-forged relationships that we have with our vendors and the continued passion and trust that our customers and consumers place in Swedish Match and its brands.”

  • INNCO Calls for Sensible Policies

    INNCO Calls for Sensible Policies

    Photo: Tobacco Reporter archive

    Blanket bans on electronic nicotine-delivery systems (ENDS) are a detriment to low-income and middle-income countries (LMICs), according to the International Network of Nicotine Consumer Organizations (INNCO). In a position paper released today, the group says bans on vapor and heated-tobacco products (HTPs) are an overly simple solution that make the problems that come with combustible cigarette use far worse.

    “The hundreds of millions of people who smoke in these countries should have the ability to make decisions about safer nicotine products, particularly when their own health is on the line,” said Samrat Chowdhery, president of INNCO’s governing board. “Overly simplistic policy solutions, such as proposed bans on all ENDS and THR products by the Bloomberg Philanthropies-funded The Union, are being offered as a blunt and impractical tool for a situation that requires pragmatism and nuance, making meaningful and sustainable change more difficult.”

    Overly simplistic policy solutions, such as proposed bans on all ENDS and THR products, are being offered for a situation that requires pragmatism and nuance.

    Samrat Chowdhery, president, INNCO

    The report, “10 Reasons Why Blanket Bans of E-Cigarettes and HTPs in low- and middle-income Countries (LMICs) Are Not Fit for Purpose,” sends a strong warning to organizations and governments that limiting options to reduce harm will only increase the number of people smoking tobacco, inevitably leading to illicit markets and increases in crime. The paper lists the Top 10 reasons the bans don’t work as the following:

    • Bans are an overly simplistic solution to a complex issue and will not work.
    • Prioritizing the banning of reduced harm alternatives over cigarettes is illogical.
    • Reduction and substitution are valid goals for smokers in LMICs.
    • People who smoke have the right to choose to reduce their own risk of harm.
    • Reduced harm alternatives can significantly contribute to the aims of global tobacco control.
    • Lack of research in LMICs is not a valid reason to ban reduced harm alternatives.
    • The prohibitionist approach in LMICs is outdated, unrealistic and condescending.
    • Bans will lead to illicit markets with increases in crime and no tax revenue.
    • Banning reduced harm alternatives leads people back to smoking and greater harm.
    • Blanket bans in LMICs are a form of “philanthropic colonialism.”

    INNCO estimates that there are scores of LMICs in jeopardy of increasing the number of people who smoke cigarettes in their countries unless pragmatic approaches to tobacco harm control are adopted, including the availability of a wide selection of safer nicotine products. Leveraging the paper’s findings, INNCO states that it will work with its global membership to inform policymakers in developing nations to help achieve risk-relative regulations and access to safer THR products, according to a press release.

    “Africa is home to some of the highest-ranked smoker countries on the planet,” said Joseph Magero, chairman of Campaign for Safer Alternatives, a pan-African nongovernmental member organization dedicated to achieving 100 percent smoke-free environments in Africa. “While improving overall public health has made great strides in these regions, efforts to directly address smoking cessation and harm reduction strategies have lagged due to limited or no access to safer, noncombustion nicotine products. By denying smokers access to much safer alternatives while leaving cigarettes on the market, policymakers would leave only two options on the table—quit or die.”

    By denying smokers access to much safer alternatives while leaving cigarettes on the market, policymakers would leave only two options on the table—quit or die.

    Joseph Magero, chairman of Campaign for Safer Alternatives

    The paper is supported by other harm reduction advocates as well. Nancy Loucas of the Coalition of Asia Pacific Tobacco Harm Reduction Advocates, a grassroots alliance of THR advocacy organizations, said a blanket ban in LMICs is a form of philanthropic colonialism, suggesting that these countries and their citizens cannot be trusted with any level of self-determination. “Inhabitants are treated as second-class citizens, which is offensive,” she said. “There is no benefit in limiting choice of safer nicotine products but only the potential for increasing harm.”

    Francisco Ordonez of the Asociacion por la Reduccion de danos del Tabaquismo Iberoamerica, a network of consumer organizations in Latin America, says that very few low-income and middle-income countries have adopted even the most basic prevention measures suggested by the World Health Organization (WHO).

    “Policymakers should embrace harm reduction as a valid goal, particularly in LMICs where access to cessation programs is extremely limited,” said Ordonez. “Replacing combustible tobacco with alternative nicotine products can significantly reduce the risk of harm by at least 95 percent. It works in industrialized nations and can do the same in LMICs.”

  • Vapor Voice Publishes PMTA Tracking Tool

    Vapor Voice Publishes PMTA Tracking Tool

    Thousands of vapor companies submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration (FDA) by the Sept. 9, 2020, deadline to keep their products on the U.S. market. But which products exactly are under review and how all those submissions have fared in the process is less clear. A comprehensive list promised by the FDA has yet to materialize.

    In the absence of an official database, Tobacco Reporter’s sister publication, Vapor Voice, decided to create its own tracker. As a news outlet, Vapor Voice already receives many press releases relating to PMTA submissions. In addition, its editors continuously monitor corporate websites, social media platforms and other industry sources. Individually, the pieces of information gathered during those endeavors make for interesting news announcements; taken together, they provide a coherent dataset to track PMTAs.

    Of course, this approach has its limits. The data is self-reported, and at present, Vapor Voice cannot fully verify the veracity of all claims made in the announcements used to compile the list. The quality of the information that reaches the magazine also varies greatly, from exact counts in all list categories to more general statements on a brand or brand family without further elaboration. As per Vapor Voice’s protocol, these issues are noted in the list.

    While the dataset should not be taken as a representative sample, it paints as coherent a picture as possible. Vapor Voice recommends using this tool to gain a directional understanding and as a starting point in a comprehensive due diligence search regarding products.

    Check out the Vapor Voice PMTA tracker here.

  • Mail Ban Forces Vape Shops Out of Business

    Mail Ban Forces Vape Shops Out of Business

    Photo: Ian Allenden | Dreamstime.com

    The Preventing Online Sales of E-Cigarettes to Children (PACT) Act has forced many companies to discontinue U.S. online sales and even cease operations altogether. Among the most recent vape shops to announce the end of their business are Elevated Vaping in Houston, Texas, and the Vape Spot in Los Angeles, California.

    Earlier, Securience, parent to DuraSmoke, announced a merger with VapinDirect to stay in business. Logic will end all online sales on March 16. White Cloud Electronic Cigarettes said it would end all online U.S. sales on March 26. Vapewild and Vistavape, too, announced that they would be closing shop.

    Even companies overseas reported supply chain disruptions as a result of the U.S. mail ban.

    “If the increase in shipping costs wasn’t enough, the bill also imposes huge paperwork burdens on small retailers and backs it up with threats of imprisonment for even innocent mistakes,” said Gregory Conley, president of the American Vaping Association. “This is not a law designed to regulate the mail-order sale of vaping products to adults; it’s an attempt to eliminate it.”

    The bill also imposes huge paperwork burdens on small retailers and backs it up with threats of imprisonment for even innocent mistakes.

    Gregory Conley, president, American Vaping Association

    Effective March 28, 2021, recipients of all vaping products purchased online will be required by law to present ID and sign for their delivery. The U.S. Postal Service ban on mailing vaping products will go into effect on April 27, 2021. After this date, customers will no longer be able to receive vaping products by way of USPS delivery.

    Many private shipping companies—which often rely on the USPS for so-called last-mile deliveries—will no longer deliver vapor products. “Effective April 5, 2021, UPS will not transport vaping products to, from or within the United States due to the increased complexity to ship those products,” said UPS spokesperson Matthew O’Connor.

    FedEx stopped accepting vapor products for delivery on March 1, 2021. DHL had already previously banned all shipments of nicotine-containing products and has now also ended all cannabis vapor product shipments.

    Writing in the National Review, Michelle Minton, a senior fellow specializing in consumer policy for the Competitive Enterprise Institute, recently cautioned that the USPS mail ban would boost sales of traditional cigarettes.