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Category: Also in TR

  • Dissecting Their Drives

    Dissecting Their Drives

    Researchers, directors, analysts, public health experts and executives should realize that their lives may be very different from those of the consumer they’re studying. | Photo: Taco Tuinstra

    To help nicotine users move down the risk continuum, it is crucial to understand consumer motivations.

    By Jessica Zdinak

    What drives change? And by change I don’t mean a short-term, temporary change but a long-term behavior change that alters entire lives. Most habits take around 14 days to “stick,” but behavior change that comes with an addiction works differently. This is what we face as scientists, public health experts, government officials, manufacturers and representatives in the nicotine and tobacco industry. Many of us want to save lives; some of us want to develop products for consumers to enjoy all while making a living and supporting our families. No matter what perspective we come from, I think we can all agree that taking a combustible cigarette smoker from cigarettes to an alternative, potentially reduced harm product often seems like a herculean task.

    To some, it seems like an almost impossible task given the intricacies of product development, including the iterative process of prototypes, testing, retesting and validation of new products. This, combined with the extensive resources and time needed in the U.S. to get a new nicotine/tobacco product authorized by the Food and Drug Administration, leaves many people awake at night wondering if success is possible. I will argue that it takes many small steps by many people to drive success in today’s industry. And it starts with our consumer—the smoker.

    It’s essential that we recognize every day how our lives as researchers, directors, analysts, public health experts and executives look nothing like the consumer we’re studying. Whether in the innovative and product development space, market research, regulatory research or FDA application submissions, if you don’t remember this, then you may find yourself wondering why you and your company aren’t as successful as you’d like.

    At the Applied Research and Analysis Company (ARAC), before our team begins daily work activities, we go outside of our own lives, thoughts, feelings and behaviors and remind ourselves of the following:

    We are not our consumers. We have biases and perspectives from a life likely not lived by our consumers. Get out of our heads and get into theirs.

    It may benefit you and your company to learn one area of psychological science that helps you to understand what drives your consumers’ behavior and most importantly—how to change it. With science exponentially advancing over the years, it’s easy to forget and leave behind the most basic scientific principles of human behavior that got us to such an advancement. As a cognitive behavioral scientist, I see too many phenomenal researchers who look to the most recently published literature but fail to remember the science that this literature was built upon.

    Some of the most basic scientific principles of behavior change revolve around a stimulus-response relationship, also known as operant conditioning (Skinner, 1938). If you are a parent, you are likely to have heard some of this terminology before when referring to allowances for chore work, spanking for bad behavior, screen time for positive behavior, etc. Unfortunately, a lot of this terminology gets misused and is therefore misunderstood. Fortunately, however, the basic principles of this behavior change model are both still relevant and one of the most robust and successful ways to change behavior. We can think of this as a box with quadrants with two main variables:

    The first variable is the actual behavior. Before applying this model, we have to ask ourselves, do we want the specific behavior in reference to increase or decrease in its occurrence. If we want to increase a desired behavior, we call this “reinforcement,” and if we want to decrease the undesired behavior, we call this “punishment.”

    The second variable is the stimulus being applied to the individual, animal, etc. If we are applying a stimulus (giving something to the individual, animal, etc.), we call this “positive,” and if we are removing a stimulus (taking something away from the individual, animal, etc.), we call this “negative.”

    When we combine these two variables, we get four outcomes that look like this:

    1. Positive reinforcement = applying a stimulus to increase a desired behavior
    2. Negative reinforcement = removing a stimulus to increase a desired behavior
    3. Positive punishment = applying a stimulus to decrease an undesired behavior
    4. Negative punishment = removing a stimulus to decrease an undesired behavior

    Putting yourself into a smoker’s life, which of these four scenarios do you think would be most beneficial to changing their behavior? Does it seem appropriate to focus our efforts on the undesired behavior (smoking), or would it seem more helpful to focus efforts on a desired, more “positive” behavior, such as walking or exercising or the use of a potentially less harmful product? Some research has examined this (Borkowski and Leal, 2018), showing how policies and initiatives aimed at punishment (changing the undesired behavior through applying or removing a stimulus) may be ineffective and potentially misguided.

    The catch here is that for this behavior change model to work, researchers and companies need to identify what the individual views as satisfying and pleasurable versus unsatisfying and uninteresting. It is likely that companies already apply some aspects of this in their regulatory, product and business strategies, but without a team of experts focused on this process, it is likely that they will come up short of their goals. It’s impossible to know what is satisfying versus unsatisfying to every single smoker in the world, but there are research methods, designs and analyses that are proven to identify and describe subpopulations, or “pockets,” of people (in experimental psychology, we call them “interaction effects”) that would all be in majority agreement of what is satisfying to them versus unsatisfying. Developing individual products to target each of these “pockets” of smokers would lead a company to be the first to have a consumer–focused portfolio of nicotine/tobacco products that encompasses the entire harm reduction continuum.

    Of course, we know that there are other obstacles to be faced in this industry. We know that most of the public has incorrect perceptions of risk associated with products along the risk continuum. We know the challenges of having reliable access to all consumers, particularly those most vulnerable.  Without federal government research experience, many people have questions on how to work with the regulator versus against them. Finding the right partnership within and outside your organization to help with these complexities is key to succeeding in this complex industry. Your consumer is a person with inward thoughts and feelings that drive their outward behavior—if you focus on understanding these aspects, you can’t go wrong. And who knows, you may develop that portfolio of products that puts an end to smoking!

    Jessica Zdinak is the owner and chief research officer of Applied Research
    and Analysis Co.

  • Peddling Trivia

    Peddling Trivia

    They find it not unpleasant. (Photo: Colleen Williams)

    A Japanese government survey ‘reveals’ that nonsmokers find smoke unpleasant while smokers like it.

    By George Gay

    According to a recent government of Japan survey, about 83 percent of Japanese people aged 18 and older find tobacco smoke unpleasant. The Cabinet Office survey, reported by Kyodo News, questioned 3,000 people online and via email during August and September last year and resulted in 1,556 valid responses. Slightly more than 56 percent of respondents said they found tobacco smoke unpleasant while about 26 percent reported they found it “somewhat unpleasant.”

    Such a survey probably cost the government relatively little, but, still, these are hard times, and I could have come up with the figure of 83 percent for free without bothering 3,000 people and while causing much less environmental degradation than the survey’s computer-based energy use would have caused and will continue to cause through the electronic storage of its results in multiple versions and places. You see, just a couple of clicks on the internet will turn up the fact that the smoking prevalence in Japan is about 17 percent.

    I’m certain that I don’t have to explain my thinking here, but, just in case, let me underline it by saying the survey found that about 75 percent of men found tobacco smoke unpleasant while about 89 percent of women did so. And do you know what? The smoking incidence among men is about 27 percent while that among women is about 8 percent.

    Let the heralds sound the trumpets! Nonsmokers find tobacco smoke unpleasant while smokers like it or are indifferent to it!

    Or perhaps I should say that nonsmokers and nonvapers find smoke and heat-not-burn (HnB) vapor unpleasant. Japan is held up as an example of good practice when it comes to helping smokers switch to less risky forms of tobacco/nicotine consumption because, while its laws do not allow the use of electronic cigarettes that deliver nicotine, HnB devices are permitted and have gained much ground on the Japanese market. It is true that the survey report mentions only tobacco smoke, but I suspect that this is because many people are heavily into deeming things when they feel it convenient to do so. Smoke is vapor, and vapor is smoke, while a “smoke-free” country might have a smoking incidence of 5 percent and, in theory, a vaping incidence of 100 percent, even though vapor is considered to be smoke. You know the sort of thinking.

    When times are hard, or even when they are not, it is surely difficult to justify a government’s expending resources on such a survey. Is it possible that anybody believes that anything meaningful can be discerned from asking 0.002 percent of Japan’s population whether tobacco smoke, as they perceive it, is unpleasant or somewhat unpleasant? Is there a difference even? Surely, if something is unpleasant, it is also somewhat unpleasant, and if it is somewhat unpleasant, it is also unpleasant. Remember, we are asking people with presumably varying perceptions to distinguish a degree of unpleasantness within a single entity; we are not asking them to compare different entities.

    In the report I saw, it was not even clear to what unpleasant referred. Is it the look of the smoke? After all, tobacco smoke is one of the few air pollutants that is visible, and, if I am correct in assuming that vapor is deemed to be smoke, the sight of vapor would offend some. There are quite a lot of people, I have noticed, who become overwrought when vapers flaunt their exhalations. More likely, however, it is the smell of the smoke, but this would seem to reduce the value of the survey further. Haven’t we known for years the answer to the general question about whether Japanese people find tobacco smoke unpleasant? Isn’t it the case that the Japanese tobacco market is one of just a few where successful efforts have been made to sell cigarettes partly on the basis that they give off reduced tobacco smells? At one time, they were referred to in Japan, and might still be, as LSS (low smoke smell) cigarettes.

    But these surveys are taken seriously—to what I would regard as almost ludicrous levels. The Kyodo report explained how the previous survey into attitudes to tobacco smoke, conducted in 2019, discovered that 78 percent found it unpleasant while warning that the results from 2019 and 2022 could not be compared because of changes made to the survey methodologies. Does any of this matter? Is there a need to know this stuff that outweighs the environmental harms being caused? When desktop printers first arrived on the scene, it became common for documents that appeared on computer screens to contain notes asking the recipients to think before they printed them. This was sensible, but now, has the time come to impress on people whether there is a need to carry out the research they are contemplating and whether it is necessary to see the results of that research disseminated and stored?

    One of the major current debates is that around artificial intelligence (AI), often with conclusions being drawn without first defining what sort of AI is under discussion. As I understand things currently, I would welcome the takeover of humanity by AI if that AI were powered in all aspects by renewable energy, capable of self-replication and movement, had sensory systems at least as varied and efficient as those of humans and started its intellectual forays with no information inherited from its creators; or, if it were not possible to kick it off with no information, if it were supplied only with the three-volume Principia Mathematica on the foundations of mathematics by Alfred North Whitehead and Bertrand Russell.

    he effect of air pollution on people in Tokyo is equivalent to their smoking from 2.68 cigarettes to 4.25 cigarettes a week. (Photo: wooooooojpn)

    Time to Move On

    On the other hand, it would be a matter of deep concern to me if the AI that took over for humanity was not powered by renewable energy, not self-replicating, not capable of movement, had no or limited sensory systems and had its intellectual arteries clogged with the sorts of trivia—and here I would include the results of the survey under discussion—that is, in large part, the sum of the intellectual history of the human race. We, or our replacement AI, cannot move forward while dragging this history behind us. It would be like trying to replace an old and discredited product, such as a cigarette, with a proven, technologically advanced product, such as a vaping device, while shaking our heads and calling for more historical research into all the problems and tragedies that the old product caused previously. Let us move on. As far as is possible, let us start afresh.

    Don’t get me wrong, I’m not picking on the government of Japan; it’s just that I was asked to write about the country and, in doing some reading, was intrigued by the story of the survey or, at least, an aspect of it. I was about to pass over the story, in fact, when my mind latched onto the unpleasant/somewhat unpleasant issue. Such efforts as were put into the survey in question are wasted everywhere, and such waste is not limited to governments. The amount of money wasted on pointless research must be astronomical. We have known for decades that smoking is bad for you and that the main offense given to nonsmokers by smokers is not the health risks associated with secondhand smoke but its smell, mainly the lingering smell given off by ashtrays and garments worn by smokers.

    That’s not to say that the survey conducted in Japan did not serve a useful purpose. It provided the government with the assurance that it could mobilize the tyranny of the majority. “Although the government in April 2020 imposed a general ban on smoking in indoor spaces used by multiple people, nearly half of respondents answered they want stricter measures to stop secondhand smoking,” Kyodo reported. And of those wanting further restrictions, about 60 percent wanted them introduced in outdoor locations, such as streets and parks.

    Now I don’t want to cause these people any unnecessary anxiety, but, according to earth.org, the biggest sources of air pollution in Tokyo, for instance, have nothing to do with tobacco smoke. They are down to vehicle emissions and factory fumes. The worst and most widespread form of this pollution is fine particulate matter, PM2.5, that gets deep into lungs and has deleterious health effects similar to those caused by cigarette smoking, including increased respiratory and heart disease occurrences.

    Apparently, the effect of air pollution on people in Tokyo, depending on where in the city they operate, is equivalent to their smoking from 2.68 to 4.25 cigarettes a week. Now I would challenge any resident of Tokyo to smoke the equivalent of 2.68–4.25 cigarettes solely through the inhalation of secondhand smoke while out in the street or in a park. They would be pushing it to smoke the equivalent of a measurable fraction of a cigarette. So, if the government is worried about the health of Tokyo’s people, it should, rather than conduct surveys on people’s attitude to tobacco smoke, take action on … well, there is only so much free advice I am willing to give.

    Navel Gazing

    Of course, if you really want to waste your effort on surveys, there is no better way than navel-gazing. And the Japanese Cancer Association (JCA), while undoubtedly doing much good work, is also keen on conducting surveys of its own members. In February last year, as part of a piece entitled “Trends in smoking prevalence and attitudes toward tobacco control among members of the JCA 2004–2017,” it said that recently, use of new tobacco products, including HnB tobacco, had become prevalent among young people. “Tobacco industries advertise the lower risk of the product compared with cigarettes; however, long‐term risks and other potentially fatal risks are unknown,” it said. “To fight against a new enemy of tobacco control, our academic society should boost activities to study the risk of new tobacco products.”

    Note that while many people, including those at the hard-to-convince U.S. Food and Drug Administration, believe that at least certain HnB devices can provide smokers with alternatives to traditional cigarettes that are less risky to consume than cigarettes, and while the JCA admits that the long-term effects of consuming HnB products are unknown, it has declared them an enemy of tobacco control.

    In other words, we seem to be up against that form of “science” where the result is deemed, and the evidence sought to establish that result. This would be chilling even if it were confined to Japan, but the JCA has wider ambitions. “As a leader in the cancer research community, the JCA should take action to deal with the control of new tobacco products globally,” it said.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • Waste Not, Want Not

    Waste Not, Want Not

    Photos: Taco Tuinstra

    Atlas Agri wants to help Zimbabwe achieve its volumes by reducing post-harvest losses.

    By Taco Tuinstra

    Anybody who has worked in the trade knows that leaf tobacco can be a hairy business. Changing weather patterns, mounting regulations and cutthroat competition keep merchants on their toes. But few dealers will have experienced the industry’s hirsute dynamics as intimately as the people that built Atlas Agri. Not only did its management team get the company up and running in record time; they also vowed to refrain from shaving until they had bought 20 million kg.

    The idea for Atlas Agri arose when a group of like-minded tobacco veterans sat down and agreed that the time was right to establish a new company. Tobacco was in short supply globally, partly due to miscalculations of how Covid-19 would impact cigarette consumption (it went up instead of down). In Zimbabwe, the cabinet had just approved the Tobacco Value Chain Transformation Plan, which, among other things, calls for a significant crop boost. “There was lots of opportunity,” says Atlas Agri Managing Director Alex Mackay, who previously served as CEO of leaf operations at Premium Tobacco International. “It just made sense.”

    Atlas Agri incorporated in June last year—just in time to participate in Zimbabwe’s 2022–2023 crop cycle—and went to work immediately. The company set up an office and tobacco receiving/storage area in Harare in the cavernous halls of the Boka Tobacco Floors off of Simon Mazarodze Road. With an eye on future expansion into additional markets, Dubai made sense as the seat of Atlas Agri’s global headquarters.

    The startup process was made easier by the facts that the company’s leaders knew each other from previous engagements and had extensive experience in the tobacco business. In addition to Mackay, the management team includes Geoff Martin, who oversees finance and administration; Peter Kockott, who leads the agronomy department; and Eric Le Patourel, who is in charge of operations. International sales are coordinated from Dubai by Global Chief Finance Officer Michael Rust and Global Sales Executive Albert Edwards, whose career includes senior positions at Premium Tobacco, Imperial Brands and Limbe Leaf Tobacco Co.

    A hairy business:  Several members of the Atlas Agri team vowed to refrain from shaving until the company had bought 20 million kg.

    Brandon Palmer
    Benjamin Edwards
    Craig Dollar
    Craig Bydawell
    Dylan Jones
    Ross Mackay
    Jordan Allatt

    Supporting Farmers

    Atlas Agri’s experience also helped it quickly recruit farmers. Many growers remembered the company’s representatives from their roles at other leaf buyers, creating instant trust. Another factor driving growers’ enthusiasm, according to Kockott, was the fact that Atlas Agri offered them a well-thought-out package. Because most small farmers in Zimbabwe lack the means to finance their operations, contractors provide them with inputs ahead of the season and recover the cost after the tobacco has been grown. The system works if implemented carefully but also carries risks. In some cases, growers have been unable to repay their loans. Atlas Agri aims to prevent defaults by lending growers a practical input package without unnecessary fills and high-cost items. “It all comes down to debt bondage,” says Mackay. “Once you have a farmer who is less beholden to the contractor, he has a better chance of repaying his loan and to profit.”

    The strategy paid off. Despite its relatively late start last year, Atlas Agri signed contracts more than 15,000 farmers. Once the season got underway, the company kept supporting its growers. “We did not just give them a contract and then waited six months to collect the product,” says Mackay. Traveling in four-wheel drive vehicles and on motorbikes, Atlas Agri’s agronomy team frequently ventured into the countryside to assist its contracted farmers with agronomic advice. Such trips were made not only by junior leaf technicians but also by upper management, allowing growers to interact directly with company officials whose rank may have kept them in the office if they had worked for other tobacco buyers. “That personal touch—that has been a strong point of our approach,” says Mackay, borrowing a slogan popularized by Souza Cruz in Brazil.

    Due to inadequate infrastructure and other limitations, Zimbabwe’s small-scale growers lose up to 50 percent of their crops.

    Reducing Field Losses

    In addition to supporting its growers and serving its customers, Atlas Agri is eager to help Zimbabwe achieve the goals of its Tobacco Value Chain Transformation Plan. As Minister of Agriculture Anxious Masuka explained in Tobacco Reporter earlier this year (see “The Man Behind the Plan,” Tobacco Reporter, May 2023), the country aims to preside over a tobacco industry worth $5 billion by 2025. Part of that growth is to be achieved by moving beyond green leaf and processed tobacco into value-added products such as cut rag and cigarettes.

    Opportunities for such expansion, however, depend heavily on the willingness of international tobacco firms to invest in Zimbabwe—a factor outside of the nation’s control. This means that much of the desired income will likely have to be realized by bringing more leaf to market. The transformation plan aims for a 300 million kg crop by 2025—70 million kg more than its farmers were expected to deliver this year.

    One of the ways in which Atlas Agri hopes to boost production is by reducing growers’ post-harvest losses. Following a massive land reform program at the turn of the century, Zimbabwe’s tobacco sector is dominated by small-scale farmers. Whereas in 1998, the crop was produced by 1,500 commercial growers and fewer than 1,000 smallholders, the industry now comprises about 144,000 small farmers and between 300 and 400 commercial operations.

    Unlike their commercial counterparts, who are heavily mechanized with tractors, irrigation systems and forced-air curing tunnels, the smallholders run barebones operations. Due to inadequate infrastructure and other limitations, Zimbabwe’s small-scale growers may lose up to 50 percent of their crops, according to the Tobacco Research Board (see “The Scientific Approach,” Tobacco Reporter, June 2023).

    One of the major constraints is curing barn capacity. Many smallholders grow more tobacco than their barns can accommodate. Tobacco that ripens after the curing barn has filled up is often left to rot in the field. While this could be remedied by building more curing barns, Atlas Agri considers this a less-than-ideal solution for small growers. Erecting such structures, the company argues, will not only push farmers deeper into debt but also boost demand for wood as the fuel to cure tobacco and additional bricks, contributing to deforestation.

    So instead of constructing additional curing barns, Atlas Agri is encouraging its contracted farmers to build inexpensive, natural air-curing systems, known in southern Africa as a “Chigaffas.” Already used to cure burley in many countries, a Chigaffa is a simple, inexpensive wooden structure with racks to dry tobacco and a roof made out of plastic tarp or thatch. “We say to our farmers, if your curing barn is empty, reap straight into the curing barn,” says Kockott. “But if your curing barn is full, instead of waiting for the barn to be empty, by which time your tobacco in the field becomes overripe, reap on the day you are supposed to and put it in the Chigaffa.”

    The purpose of the Chigaffa is to alleviate pressure on the barn and prevent tobacco from sitting too long in the fields. “If you put overripe tobacco in the barn—by the time it is wilted and ready to fix color, it will have turned brown, so you have lost quality and yields,” says Kockott. Using a Chigaffa allows farmers to market tobacco that would otherwise be lost. Even if the Chigaffa leaf does not attract premium prices, the potential for additional volumes presents opportunity for additional income.

    While some have expressed concern that the Chigaffa system will bring lower quality tobaccos to market, Mackay notes that those styles are in line with prevailing customer preferences. “Global demand for value and super-value styles currently exceeds that for top quality tobacco,” he points out. Another advantage: Using the Chigaffa reduces the time spent in the traditional curing barn by a few days, lowering wood consumption, thus contributing to sustainability—a fact that should appeal to international customers, who expect their tobacco to be grown according to strict environmental, social and governance requirements.

    Convinced by the merits of natural air curing, the Tobacco Industry and Marketing Board endorsed the system earlier this year. “The introduction of this natural Virginia tobacco product is in line with the Tobacco Value Chain Transformation Plan,” the regulator wrote in a press note. “By producing more natural Virginia tobacco […] we believe the local tobacco industry will generate a wider range of qualities for customers on the global market, creating demand and encouraging investment for the ultimate longevity of the Zimbabwean tobacco industry.”

    Just by reducing post-harvest losses, a small farmer could increase his or her volume by up to a quarter, according to Atlas Agri. If the entire smallholder sector optimized its operations, it would go a long way toward achieving the 300 million kg proposed in the transformation plan. “Think about it,” says Mackay. “Smallholders produced approximately 200 million kg out of this year’s 260 million-plus kg crop. If they can add a quarter to what they already deliver, the country will be quite close to the desired 300 million kg—without claiming a single additional hectare of farmland or increasing pressure on our woodlands.”

    Even if the Chigaffa leaf does not attract premium prices, it still represents potential for additional income to the farmer.

    Beyond Tobacco

    In addition to boosting tobacco volumes, Atlas Agri is exploring complimentary crops, such as soya and cotton, to enhance farmer viability. Already, the company has provided its contracted growers with inputs for 700 hectares of soya. According to Mackay, diversification will not only improve farmers’ financial security but also rehabilitate their soils through better crop rotation. This in turn should ease the pressure from pests and disease, reducing the need for chemical crop protection agents, thereby creating a more sustainable product.

    Atlas Agri has made tremendous progress since its incorporation last year. “We are starting to reap the fruits of our heavy lifting,” says Mackay. “It’s incredibly gratifying when you see farmers smiling because you know you have exceeded expectations.” When the business hit its 20 million kg milestone in May 2023, the company’s by now shaggy crew broke out the champagne, along with the razors, and took advantage of a rare opportunity to unwind—but only momentarily because it’s time already to start thinking about the next crop.

    Like this season, the upcoming production cycle will throw up plenty of regulatory, environmental and competitive hurdles. If Atlas Agri’s first year of operation is any indication, however, the team members will overcome them with their trademark combination of passion, professionalism and persistence, ready to take each of the challenges on their freshly shaven chins.

    What a difference 20 million kg makes: Upon achieving their buying target, Atlas Agri’s team paid a well-deserved visit to the barber.

    Banjamin Edwards
    Brandon Palmer
    Craig Dollar
    Craig Bydawell
    Dylan Jones
    Ross Mackay
    Jordan Allatt
    Taco Tuinstra is Tobacco Reporter’s editorial director. Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors. On his watch, Tobacco Reporter has won several awards for editorial excellence. Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.
  • Doctor’s Orders

    Doctor’s Orders

    Photo: Minerva Studio

    Medical licensing of e-cigarettes and nicotine pouches should be an urgent priority.

    By Derek Yach

    The alarm about the risks of products to health is usually first sounded by physicians. That was certainly the case with tobacco and health. The 1962 Royal College of Physicians (RCP) Report on Smoking as well as the 1964 Surgeon General’s (SG) Report on the same topic were led by physicians and drew upon the best epidemiological evidence available. The reports’ statement that “smoking kills” led to rapid changes in physicians’ smoking behavior well before regulators took up the challenge. The world had to wait eight years before the World Health Organization passed its first modest resolution on smoking. Only then did modest public health policies emerge.

    Internationally, the evidence is clear: No country experiences a serious decline in their smoking rates before it declines among physicians. And it takes about a decade before the population benefits start appearing. Globally, smoking rates among men approach 40 percent to 50 percent in countries as diverse as China, Bulgaria, Jordan and Bangladesh—or 50 years behind where the U.K. is today. Smoking rates among the physicians in these countries are about the same. There are few examples of physician-led reports like those of the RCP or SG from middle-income or lower middle-income countries. In such settings, we cannot expect to see substantial progress in ending smoking if we stick with the status quo.

    Physician Leadership Is Crucial for the Introduction of Innovative Interventions

    Innovations in healthcare are usually led by physicians armed with solid epidemiological and clinical data showing the benefits of new interventions for patients and the population. Physician leadership gives credibility to new products. The opposite is also true. Products that are not endorsed or approved by physicians rarely achieve population benefits and may face stiff regulatory approval.

    Sluggish Progress on Improving Cessation Outcomes

    For decades, physicians have followed a “medicalization” path to cessation, so it is not surprising that they have neglected tobacco harm reduction (THR) options. The basic advice given by physicians has changed little. Quit cold turkey, counseling, nicotine-replacement therapies (NRTs) and a few other pharmaceutical and behavioral services remain the mainstay of cessation. None have success rates that exceed 15 percent over the year, and most are associated with repeated relapses. The World Health Organization’s own reports to the World Health Assembly this year pointed to slow progress in addressing cessation. Numerous reports, such as those issued by the Foundation for a Smoke-Free World, have pointed to the failure of the pharmaceutical industry to bring better cessation tools to the market despite advances in behavioral and neuroscience that have led to new therapies for a range of diseases.

    It is long overdue that physicians have access to far more efficacious and effective ways of ending smoking. We now have a full range of feasible options that have been authorized by the U.S. Food and Drug Administration as “appropriate for the protection of public health”: heated-tobacco products, e-cigarettes, snus and most recently nicotine pouches. E-cigarettes and nicotine pouches are well placed to form the basis of a new approach to cessation and harm reduction.

    How Do We Engage Physicians in Scaling up Access to These Lifesaving Products?

    Recent experience shows that physicians have been resistant to these products for several reasons. They fear these are a new tactic by the tobacco industry to keep the next generation addicted. They seek data on long-term benefits. They are bamboozled daily by well-funded nonprofits and WHO messages about the dangers of these products for kids, and the impact of them on cancer or heart disease. The fact that none of this is based on science has not stopped the opposition.

    Could Medically Licensed Products Break Through and Reach Physicians?

    I strongly believe that they could.

    At a recent Keller and Heckman meeting, Ian Fearon, chief scientific officer at McKinney Scientific Advisors, described the “halo” effect of having medically licensed e-cigarettes on the market. To get medically licensed requires proof of quality, safety and efficacy. Once achieved, this could legitimize the category and open the doors to widespread physician acceptance of the products. The same could happen with nicotine pouches.

     This could start to erode distrust of these products by physicians as they use them and advise their patients to use them. The predictable positive outcomes would accelerate adoptions and use.

    Recall that almost 50 percent of male doctors in many low-income and middle-income countries and countries across the Middle East smoke. Helping them to switch first deserves concerted effort. And having a new medically licensed e-cigarette or nicotine pouch could well trigger the desired cascading impacts on their patients and then among the general population.

    The process to obtain a medical license has been well outlined by the FDA’s Center for Drug Evaluation and Research (CDER) and the U.K.’s Medicines and Healthcare products Regulatory Agency (MHRA). Neil Benowitz et al. (see below) and Fearon have stressed that CDER requirements are particularly onerous. The MHRA process is more “encouraging.” According to them, a major benefit of the MHRA is that studies required can be conducted in any country whereas only U.S. studies are accepted by the CDER.

    A unique authoring partnership between people who usually disagree about the value of THR concluded that the CDER should “reach out to companies that may be interested in developing smoking cessation products” and indicated that that could include medically approved vapes. Authors included Benowitz and Ken Warner, known supporters of THR, and Matt Myers and Joanne Cohen, who until now have opposed THR.

    They commented that “the deadliest form of nicotine delivery has been subject to limited oversight whereas products marketed to help people quit face far more regulatory barriers.” The fact that agreement can be reached on the value of THR in the context of medically licensed products should be taken as a signal to how broader acceptance might happen.

    Mitch Zeller, previous head of the FDA’s Center for Tobacco Products, jumped into this field recently and urged action on medical licensing when he announced that he had joined a company aiming to bring a medically licensable vape to market.

    Why Has Industry Not Led the Way?

    There can be little doubt that the pharmaceutical industry and leaders in the tobacco industry have long had the scientific knowledge and technical capabilities to develop medically licensed equivalents to e-cigarettes and nicotine pouches. So why has there been no progress? Are short-term commercial interests taking precedent over health needs? I suspect this is a major factor delaying progress by large companies. But thankfully, smaller entrepreneurial companies are pursuing medical licenses at considerable cost to them.

    In addition to commercial interests, industry leaders and analysts have mentioned three other issues as hampering to progress:

    1. Concern that the WHO and anti-harm reduction activists would mount campaigns against them.
    2. Tobacco companies fear that a medically licensed product would reach a small part of the market—people with early symptoms of disease or those deeply concerned about their health. That might turn off other smokers seeking to use safer products for recreation and pleasure. They do not want to be stigmatized as being “patients.”
    3. Any innovation or improvement to a medically licensed reduced-risk product needs costly, lengthy and comprehensive re-appraisals by the regulating body with no guarantee of consumer acceptance. For industries specializing in fast-moving consumer goods, this can be a deterrent.

    What Is the Size of the Market?

    Companies need to look at data on the burden of disease and at data they have showing that an extremely high percentage of e-cigarette users switched from combustibles for health reasons. Global burden of disease data shows that 8 million people die annually from tobacco use. That figure hides the fact that hundreds of millions of tobacco users have early symptoms or signs of cancers, heart and lung disease or tuberculosis. It hides the fact that over 50 percent of people with serious mental illness smoke, that about 60 percent to 70 percent of people with early chronic obstructive pulmonary disease, tuberculosis and schizophrenia smoke at the point they are diagnosed. And that figure does not change much during their treatment, suggesting physicians’ failure to help their patients end smoking.

    It is not surprising that a recent Bloomberg analysis suggests that the size of the nicotine-replacement market could reach $100 billion by 2028. That should stimulate companies to invest in medically licensed options that consumers demand and enjoy in unprecedent numbers.

    How Would These Products Be Marketed?

    Marketing strategies would need to distinguish between products that are medically approved versus others. There are many precedents for designing marketing plans to reach two different audiences using the same basic product. The most recent being how Ozempic addresses the needs of people with diabetes while Wegovy (both made by Novo Nordisk) addresses obesity. Two brands, one set of active ingredients. In an analogous way, initially NRTs were prescription-only in most countries but were changed to “over the counter” use to improve access to “essential medicine,” and NRTs are noted as such in the WHO Model List of Essential Medicines.

    I could see this developing a comparable way for e-cigarettes and nicotine pouches.

    Conclusion

    There is a massive untapped need to get more efficacious cessation products on the market. Medically licensed e-cigarettes and nicotine pouches could well be the key to gaining widespread and critically needed physician support for the categories. That could unblock deep opposition to THR as it has happened with so many innovations that benefit health.

    A global health expert and anti-smoking advocate for more than 30 years, Derek Yach is the owner of Global Health Strategies. Previously, Yach was the director of the Foundation for a Smoke-Free World and a World Health Organization cabinet director and executive director for noncommunicable diseases and mental health. He was deeply involved with the development of the Framework Convention on Tobacco Control.
  • The Heat is On

    The Heat is On

    Photo: lunx

    Competition in South Korea’s heated-tobacco products market is intensifying.

    By Stefanie Rossel

    When it comes to adoption of heated-tobacco products (HTPs), South Korean consumers are second only to their Japanese counterparts. Sales of HTPs have increased significantly since their introduction to the South Korean market in 2017, cannibalizing sales of traditional cigarettes. In 2023, the country’s HTP market is estimated to reach a value of KRW2.2 trillion ($913.39 million), up from KRW1.6 trillion in 2019 and KRW2 trillion in 2021, according to Euromonitor. By 2025, the business intelligence firm predicts that the Korean HTP market will be worth KRW2.4 trillion.

    While the number of tobacco products sold in South Korea rose by 1.1 percent from 3.59 billion packs of 20 cigarettes in 2020 to 3.63 billion packs in 2022, it was consumable sales of HTPs that drove the market. Their share increased from 380 million packs in 2020 to 540 million packs in 2022 whereas the sale of combustible cigarette packs dropped from 3.2 billion packs in 2020 to 3.09 billion in 2022, the country’s finance ministry stated in February.

    Demand for conventional cigarettes fell by 1.8 percent year-on-year while sales of HTPs rose by 21.3 percent. According to a survey by the Ministry of Finance, HTPs held a share of 14.8 percent of the total tobacco market in the first half of 2022. In 2023, the overall South Korean tobacco products market will be worth an estimated $9.2 billion, according to Statista. The country’s continuously declining smoking rate has been linked to the introduction of HTPs to the market. Smoking prevalence, which stood at 23.8 percent in 2015, dropped to 15.6 percent in 2021 and is expected to decrease by another 2.6 percent by 2026.

    Both traditional cigarettes and tobacco sticks for HTPs retail at roughly KRW4,500 per pack of 20 but are taxed slightly differently. Total tax per pack of 20 combustible cigarettes amounts to KRW3,223. For a pack of HTP consumables, it’s 90 percent of that, or KRW3,004, reflecting that the products are considered to be less harmful than traditional smokes. In April this year, South Korea’s ruling party suggested subjecting cigarettes and HTPs to the same tax rates amid a government drive to boost falling revenue, but the Ministry of Finance rejected the proposal. With a general election coming up in April 2024, the government is not expected to equalize the tax differential between the two categories in the near term.

    In January, KT&G CEO Baek Bok-in and PMI CEO Jacek Olczak turned their companies’ three-year cooperation agreement into a 15-year contract. While partnering internationally, PMI and KT&G compete fiercely for market share in South Korea. | Photo: KT&G

    Partners and Competitors

    South Korea’s HTP market is split among three players: Philip Morris International, KT&G and BAT. Recently, competition has been heating up in the category: PMI, which in 2017 introduced the first HTP (IQOS) in South Korea, remained the market leader until 2019, when IQOS sales declined from KRW800 billion in 2017 to KRW500 billion and KT&G overtook PMI with its Lil device. According to 2FIRSTS, Lil accounted for 48 percent of the market in May 2023 followed by IQOS with 42 percent and BAT’s Glo with 10 percent.

    In the past six months, all manufacturers have introduced new models of their HTP brands in Korea; they have also unleashed an aggressive price war.

    In November, KT&G launched Lil Aible, which is equipped with artificial intelligence technology that shows how long it takes to fully charge the device and preheat the consumable as well as how many times the user can puff with the remaining battery. On KT&G’s dedicated mobile app, users can check messages, phone notifications, the weather and calendar information. What sets the new model apart from other HTPs is its ability to use three different tobacco sticks with one device. Like its predecessor, Lil Aible features automatic heating, a self-cleaning system and a maximum of three consecutive uses.

    The product comes in two versions—an original version that retails at KRW110,000 and a premium version, which has an OLED touchscreen to make it easier for users to control diverse functions, at KRW200,000.

    To recapture its No. 1 position, PMI in February launched IQOS Iluma One, an economy version of its latest HTP device. The Iluma series works with a bladeless induction system and can only be used with dedicated heat sticks named Terea. The sticks are equipped with a metal heating element, a thin solid metal thread that is coated with stainless steel that heats the tobacco from within. A front plug at the end of the stick behind the tobacco element prevents tobacco residue, which means users do not need to clean the device.

    The company had been selling the more premium variants, Iluma and Iluma Prime, in major South Korean cities including Seoul and Busan since late 2022 and seized the opportunity of the Iluma One introduction for a nationwide rollout of all of its Iluma models. Iluma One is available at KRW69,000 whereas Iluma and Iluma Prime are sold for KRW99,000 and KRW139,000, respectively.

    In late November 2022, PMI had started manufacturing Terea consumables at its South Korean Yangsan plant, where the company has invested more than KRW300 billion in the production of noncombustible products since 2017.

    While battling for market share in South Korea, PMI and KT&G cooperate internationally. On Jan. 30, 2023, PMI and KT&G turned the three-year agreement they signed in 2020 into a 15-year contract. The agreement gives PMI exclusive access to KT&G’s smoke-free brands and innovation pipeline, including offerings for low-income and middle-income markets, and provides KT&G with continued access to PMI’s global commercial infrastructure and experience in commercializing smoke-free products. As a result of the collaboration, Lil, which PMI considers complementary to its existing portfolio of smoke-free products, is currently present in 31 countries in Central America, Europe and Central Asia.

    Fierce Price Battle

    Also in February, BAT launched Glo Hyper X2 in South Korea. After years of plodding along with a market share of 6 percent, the company increased its market share to 11.7 percent in 2022, according to The Korea Herald. Glo Hyper X2 is expected to further bolster the company’s position in South Korea. The all-in-one device, which features induction heating technology, faster heating and an LED indicator showing battery status, was introduced at a cut-rate price of KRW40,000. 

    In May, BAT cut prices of its HTPs in South Korea by half to expand its market share, according to 2FIRSTS.com. Glo Hyper X2 now retails at KRW19,000. According to the website, BAT Korea’s revenue in 2022 increased 14.3 percent compared to the previous year, but operating profits declined by 11.6 percent to KRW44.6 billion. Analysts fear that the low price strategy will cause BAT’s profitability to decline.

    BAT’s price reductions prompted KT&G to follow suit. The company began selling Lil Aible and Lil Aible Premium at a promotional price of KRW99,000 and KRW167,000, respectively. Analysts estimate that to maintain profit margins, the companies must sell their heating products for at least KRW30,000.

    Whether BAT’s strategy will work out remains to be seen. With an estimated 8 million smokers of combustible cigarettes, the South Korea market still holds a lot of potential for manufacturers of less hazardous alternatives.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Why Don’t They Just Stop?

    Why Don’t They Just Stop?

    Photo: Wosunan

    Utopian visions and unintended consequences

    By Cheryl K. Olson

    “The decline in smoking prevalence has slowed to a trickle.” That’s how Kenneth Warner of the University of Michigan’s School of Public Health phrased it in a 2013 editorial on the tobacco endgame. With progress stalled, tobacco control advocates searched for dramatic measures to kick-start it. A Google Scholar search for “tobacco endgame” brings up over 7,000 results for the past decade.

    One popular idea is to simply declare game over. A 2018 editorial in Tobacco Control pointed to clever ads placed in U.K. newspapers by Philip Morris International saying, “We’re trying to give up cigarettes.” Rephrasing that slogan as “Stop me before I kill again,” the editorial stated, “There is no reason why a plan to phase out cigarette sales cannot be developed and pursued now.”

    The disruptions and isolation of the Covid-19 pandemic brought fresh calls in major medical and public health journals to stop marketing smokes. “In this context, now is an opportune time to move toward removing cigarettes from general retail sale,” said a BMJ editorial.

    If the tobacco industry is sincere about reducing harm, why don’t they just stop selling cigarettes? “That’s a very common talking point. It’s a nice utopian vision,” says Dave Dobbins, an independent consultant currently working with Altria and former chief operating officer of the Legacy Foundation/Truth Initiative.

    What would actually happen if Big Tobacco shut down cigarette sales tomorrow? And more realistically, what actions might speed the day when the last Marlboro or Salem is packaged and trucked? Experts in public health, economics and law enforcement have some thoughts.

    ‘In the Hands of Criminals’

    Dave Dobbins

    Cigarette sales could stop, but the desire to buy them wouldn’t. “All industries are a product of supply and demand,” says Dobbins. “And eliminating supply does not eliminate demand.” He pictured equipment idled by Big Tobacco being bought up and put to use by less-scrupulous entities.

    “If the tobacco companies stopped selling cigarettes, you would find an explosion in the black market and the counterfeit market,” says Richard Marianos, retired assistant director at the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and faculty member at Georgetown University. “They would be smuggled into the United States and supplant that demand that has been voided by the tobacco companies.”

    Halting sales of cigarettes would have unintended consequences. Currently, tobacco companies are regulated and taxed, and their products are distributed in legal commerce.

    “By taking them out of commerce, you put the market in the hands of criminals who will sell on the street and create additional crime,” says Marianos.

    We see an analogous situation unfolding with the regulation of vaping. After the U.S. Food and Drug Administration prioritized enforcement against mint and fruit-flavored prefilled cartridges in January 2020, youth sales of disposable flavored brands soared. On June 22, the FDA announced a “nationwide retailer inspection blitz” that led to warning letters cracking down on the disposable brands Elf Bar and Esco Bars.

    “There’s vaping out there that is designed for a tobacco harm reduction strategy, which is good, to get people off combustibles,” Marianos says. “But these disposable vapes with flavors like bubblegum and gummy bear, marketed to kids, made by unregulated factories in China, need to be put away.”

    Marianos also points to an additional public health risk from counterfeit or contraband overseas products: “A lot of them are made in facilities that contain rat feces and dirty machines.”

    A report in the June 23 issue of the CDC’s Morbidity and Mortality Weekly Report noted an increase in e-cigarette associated cases reported to U.S. poison centers. Sixty percent involved Elf Bar, and more than 90 percent of those were among children younger than five.

    Prohibition Lessons

    “It’s just not clear that there are methods that are both plausible and coercive enough to enforce a prohibition if people really want drugs,” says Dobbins. “The drug wars in every other field have been an utter failure. I don’t think there’s a lot of hope that there’d be a different result if you declared a drug war on nicotine.”

    The U.S. experience with alcohol Prohibition in the early 20th century is enlightening. Entertaining examples of law evasion can be found on the website for the Ken Burns public television documentary about this failed experiment. Grape juice concentrate was sold with sly warnings not to leave it sitting too long, lest it ferment into wine. Home distilling equipment could be bought at hardware stores, and instructions on making booze could be found at the library. In short, “The law that was meant to stop Americans from drinking was instead turning many of them into experts on how to make it.” And the problem of alcohol abuse, far from being solved by Prohibition, was made worse.

    “It’s hard for me to imagine the kind of coercive measures a state would have to employ to curtail supply, much less demand,” Dobbins says. “In countries that essentially eliminated marketing and imposed plain labeling or graphic depictions of the death and disease that can occur from cigarette use, those efforts have only very mildly curtailed demand.”

    During the Covid-19 pandemic, South Africa enacted a temporary ban for the public good. Research showed that people who smoked were at higher risk for severe illness; this could buckle the healthcare system. Unfortunately, the usual happened: Less than 10 percent of smokers quit. The existing black market ramped up production. Prices increased over 240 percent. When the ban ended, the illicit sellers had a larger share than before. (For other examples, see “Prohibitionists at Work” on Clive Bates’s The Counterfactual website.)

    Harm Maintenance?

    In 2013, Warner noted the lack of consensus on what the “end of the endgame” might look like for tobacco control. The end of smoking? Of all forms of tobacco use? A nicotine-free population? Or “a more modest tobacco harm minimization objective”?

    In that 2018 Tobacco Control editorial,  Ruth Malone wrote, “So we should all be clear about one thing: ‘Giving up cigarettes’ for PMI does not mean the company wants people to quit using its addiction sticks. It means they want to get people hooked on a different type of addiction stick.”

    Harm minimization looked like a profit-maintenance ploy to skeptics in public health. They felt burned by “light” cigarettes and saw poor adoption of the available nicotine replacement options. As John P. Pierce wrote in Nicotine & Tobacco Research in 2002, “Without more research on whether these products can be substituted effectively for smoking, endorsing harm reduction as a goal could lead to another 25 years of harm maintenance.”

    How different things look 21 years later! Novel nicotine alternatives abound. We have data that many people who smoke, including those from vulnerable groups, are indeed willing to substitute these products. Anti-smoking eminences such as Warner now advocate for “nicotine e-cigarettes as a tool for smoking cessation.”

    For public health people, it’s hard to let go of the desire to punish Big Tobacco for real and serious past harms. But we can’t wish away the accumulating data. Evidence suggests that helping multinational cigarette makers transform into diversified sellers of noncombustible nicotine products will save more lives with fewer unintended effects. Ditto for helping people who can’t or don’t want to quit smoking switch to satisfying lower risk options.

    ‘Novelty Items’

    Michael Pesko

    Michael Pesko, an associate professor at Georgia State University who studies nicotine policy, gave me the economist perspective. “How do we intervene in a marketplace determined by supply and demand to reduce purchases of combustible tobacco products? No intervention will fully stamp out combustibles, but it may be possible to reduce their use to novelty items,” he says.

    He recommends a combination of education and risk-based regulation. “Raising public health awareness about the dangers of combustibles and the harm reduction benefits of reduced-risk tobacco products such as e-cigarettes is a way to reduce demand for combustible tobacco products,” he says. “Heavy regulation of combustibles, such as taxing them, can be used to reduce supply.”

    A new article by eight prominent academics and lawyers titled Do Tobacco Companies Have an Incentive to Promote “Harm Reduction” Products? says, yes, they do—provided there is competition from noncigarette companies and appropriate government regulation.

    The authors mention multiple ways that tobacco control researchers can add sunshine to speed this transition. This ranges from analyzing the effects of government regulations on competition and the market position of noncombustibles versus cigarettes to monitoring and exposing smoking promoting or alternative discouraging activities by tobacco companies.

    Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.
  • Stepping Up

    Stepping Up

    Zilong presented its Marskiss heat-not-burn product at TabExpo in Bologna.
    (Photo: Taco Tuinstra)

    Newcomer Marskiss aims to offer heated-tobacco consumers an improved user experience.

    By Stefanie Rossel

    Since their introduction to the market less than a decade ago, sales of heated-tobacco products (HTPs) have grown remarkably. Market research companies are outdoing each other in their forecasts for the category. Reportlinker, for example, valued the global HTP market at $22.36 billion in 2022 and expects it to reach $25.89 billion this year. The market is anticipated to increase at a compound annual growth rate of 15.9 percent to reach $72.86 billion by 2030. Euromonitor expects HTPs to cement their place at the head of the vapor growth category, with significant growth in Japan, South Korea, Russia, Italy, Germany, Poland, the U.S. and Ukraine.

    The global HTP market is dominated by four large players—Philip Morris International, which pioneered the category with its IQOS device; BAT, which competes with its Glo brand; Japan Tobacco International, known for its Ploom product; and KT&G with its Lil series.

    Inspired by the success in the segment of their larger counterparts, many smaller manufacturers have also entered the market. One of them is Singapore-based business Zilong. Driven by its desire to design a safe and good-flavored HTP, the company spent more than 10 years developing Marskiss before debuting the product in 2021 at the WT Middle East exhibition in Dubai and, more recently, showcasing it at TabExpo 2023 in Bologna.

    To understand how Marskiss differs from other HTPs, it’s helpful to examine the company’s background. Zilong was founded by Zhan Baoming, who has worked China’s tobacco industry since 1991 and also owns a cigarette flavoring company. Zhan has been in tobacco harm reduction since 2000. The knowledge he acquired about tar reduction and aroma enhancement laid a solid foundation for the creation of Zilong’s HTP product, according to Zhan. “My goal is to make a good HTP product that is low in tar while satisfying in tobacco aroma,” he says.

    One Marskiss stick provides users with the same level of satisfaction as two or three sticks of other HTP brands, according to Zilong. (Photo: Taco Tuinstra)

    Longer Lasting Aroma

    The nature and treatment of the tobacco makes all the difference, explains Zhan. “Our product uses high-quality natural tobacco as a carrier for our ‘aroma precursors,’ which is a featured technology of our product. At present, most HTP products on the market use food liquid fragrances to produce tobacco aroma. However, the resistance of food liquid fragrances to high temperature is weak, and the fragrances will be denatured and volatilized quickly with the increase of temperature, resulting in a shorter retention time of tobacco aroma. How to prolong the retention time of tobacco aroma? After years of research, our technical team found that natural tobacco and aromatic plants can be processed in a special procedure to obtain a comprehensive aroma, which produces fragrances of more lasting retention. This is what we call ‘the aroma precursor.’ The aroma precursor has much less impurity and more full-bodied, consistent and lasting tobacco flavor.”

    According to Zhan, Marskiss sticks feature more advanced moisturizing technology than other HTPs, which makes their aerosols purer and fresher. Among other benefits, this prevents users from experiencing a dry mouth, which is a common problem associated with HTPs. To keep the moisturized tobacco fresh, Zilong has developed a special stick construction that includes a storage chamber for the tobacco and a more efficient filtering technique.

    “The paper tube of our product has two layers—an outer layer and an inner layer—and we choose natural porous material as the inner layer coating to build a storage environment similar to a ceramic pot, which can capture the moisture from the tobacco section and keep it inside the tube so that the tobacco section will not become dry after the package has been opened for a period of time,” says Zhan.

    The patented chamber lets the tobacco age naturally with storage, according to Zilong, which will result in a better taste. What’s more, the filter section of each Marskiss stick features a ball array filtration system so that the aerosol passes through a curved path formed between the gap in the ball array. “After layer upon layer [of] filtration, the aerosol becomes fresher and purer,” explains Zhan.

    Marskiss sticks feature advanced moisturizing technology that keeps aerosols pure and fresh. Among other benefits, this prevents users from experiencing dry mouth. (Image: Zilong)

    More Satisfying

    Zilong claims its technology enables one Marskiss stick to provide users with the same level of satisfaction as two or three sticks of other HTP brands. By using lower, more balanced levels of nicotine salts, Marskiss also helps users avoid headaches associated with excessive nicotine salts.

    Marskiss tobacco sticks come in five flavors and are matched by a device with a pre-heating time of 20 seconds that allows for 18 puffs or five minutes of use, which is about four puffs more than other brands. Initially, Zilong intends to launch Marskiss with blade heating technology. Down the road, the device will also be available with pin heating technology. “It is light-weight, slim and slick, and portable, and more importantly, it is a perfect match with our stick product that can heat the sticks to give the best experiences to users,” says Zhan.

    In combination with the sticks’ patented filtering technology, the device reduces throat irritation and reduced dust to lungs, according to Zilong.

    The company has invested €15 million ($16.25 million) in Marskiss so far. In preparation for launch, Zilong has started identifying markets and partners. According to Zhan, the product has performed well in consumer trials. “We have done several rounds of consumer testing in different markets and basically, we get pretty positive feedback from users, including distinctive and lasting tobacco aroma, no bad smell in mouth and room so that people around them do not object them from using our product, and no headache or coughing after using,” he says.

    “We hope to tackle the pain points of the smokers, and we are committed to making the best [heat-not-burn] product,” says Zhan. “Please stay tuned for updates.”

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • A Mixed Bag

    A Mixed Bag

    Image: Taco Tuinstra

    Growers continue to struggle with rising production cost, but demand for tobacco remains firm.

    By Stefanie Rossel

    Ivan Genov

    Challenges abound for the global leaf sector, but there are also opportunities for tobacco farmers, Ivan Genov, manager of tobacco industry analysis at the International Tobacco Growers Association (ITGA), told participants in the organization’s recent regional meeting in Salta, Argentina.

    The ITGA recently completed a survey among growers and other stakeholders. “The rising cost of production was consistently put as the primary economic concern in the Americas, Africa, Asia, Europe as well as the Middle East regions,” Genov told Tobacco Reporter. “This dynamic is accelerating and has been particularly worrying in the last two to three marketing seasons. The situation is made worse by other underlying factors, including inflation, price rises of key commodities and growing international tensions, making even more challenging the navigation in global supply chains. All these factors contribute to bringing up the general costs of living and create a natural obstacle in tobacco production.”

    In Brazil, for example, the cost of production increased by more than 30 percent on an annual basis; in Zimbabwe, it was more than 20 percent. In most of the leading tobacco producing and exporting countries, the cost of production has been growing at double-digit figures, according to Genov.

    In addition, Russia’s invasion of Ukraine has impacted the availability and pricing of fertilizers. “The war in Ukraine, along with the massive humanitarian disaster, is also highly problematic in the wider agricultural aspect,” said Genov. “A lot of African and lower income markets are highly dependent on agrifood commodities imported from Russia and Ukraine; wheat was highlighted by the United Nations in the beginning of the conflict. The war has created a shortage of fertilizers as well as a spike in pricing as alternative production routes have to be exploited—often much farther away. This adds to the rising costs of production.”

    Worsening U.S.-China relations, meanwhile, could result in more trade barriers for leaf tobacco and other commodities. Inflation pressures, meanwhile, have added to the general expectation of a prolonged period of crisis. There is consensus that cigarette consumption has peaked and is now declining in line with tobacco in the long term. Novel alternatives such as heated-tobacco products contain less tobacco per stick than traditional cigarettes, whereas e-cigarettes require no tobacco at all. The EU Supply Chain Due Diligence Act will bring about more requirements in each step of the production process.

    All tobacco origins suffered from significantly increased cost of production. | Photo: Tobacco Reporter archive

    Resilient Farmers

    Despite these challenges, there are still opportunities for tobacco growers, the survey showed. Since late 2020, leaf has been in undersupply worldwide—an issue that is openly discussed by leaf merchants and international manufacturers. “Some of them have the lowest uncommitted inventories in their recent histories,” said Genov. “The case around burley is particularly relevant. For example, the 2022 crop in Malawi—one of the key markets for the variety—was very short. As a result, we believe it is natural to expect growth in pricing that goes above the cost of production increases [see “Back to Normal,” Tobacco Reporter, June 2023]. The alternative is to see further drops in the global tobacco growers base as cultivating the crop will become even more challenging. We have to remember that this happens on top of issues with generational continuation and the move away from rural areas by young people.”

    Stable producers who are well prepared for the underlying threats will enjoy demand for their products, according to Genov. “A lot of tobacco growers have been in the business for several generations,” he said. “A great number of them have a well-diversified land, stable channels and partners for their inputs and huge experience in planning. In the face of leaf shortage and high demand, this surely means quality production is very likely to be realized. Unfortunately, in some cases, diversification is not as easy. It is not only about time and financing but the opportunities of the market. In certain countries, tobacco is the best bet. Small-scale farmers are often left with the least support; they do not have the capacity and time to safeguard against all threats. This is why support from all stakeholders in the sector is essential. Small-scale farmers must not be treated as suppliers of low-price production only.”

    Most tobacco farmers are exceptionally resilient, Genov stated. “They have worked in a regulations-heavy environment for decades. Nevertheless, it is still essential to receive support and real understanding from local and international authorities and to be included in the conversations that decide their futures. In addition, tobacco growers’ needs are often not dissimilar to those farmers caring about other field crops.”

    Support Needed

    According to Genov, one way to assist growers is through diversification efforts, especially in the markets that are heavily dependent on tobacco. Unfortunately, he said, the World Health Organization’s Framework Convention on Tobacco Control (FCTC) Article 17, which urges member states to find viable alternatives for tobacco growers, has delivered few tangible results on this front. ITGA has put Article 17 at the center of its efforts in 2023 to ensure that the issue is taken seriously during the Conference of the Parties to the FCTC in Panama later this year. The organization urges stakeholders to remember that the livelihoods of millions of people depend on tobacco growers.

    Tobacco growing countries will also need assistance with issues such as deforestation, which has been a big problem, especially in Africa. “Finding and financing alternative fuel sources that are more environmentally sustainable is critical,” said Genov. “There are some projects being run in this area. Last November, ITGA organized an awareness bringing campaign about deforestation in three of the leading tobacco growing regions in Zimbabwe. We are pressing ahead with expanding the project to other regions by the end of the year.”

    One of the areas that should be prioritized is water management, according to the results of the ITGA’s survey. “For example, in Brazil, one of the key international leaf markets, there is low water storage capacity,” said Genov. “Water conservation is going to climb on the agenda in the years to come. If we include the urgent social issues that are often faced by tobacco growers, like poverty, lack of opportunity for the youth, child labor and inadequate healthcare, we can see that the sector still needs a lot of attention.”

    Increasingly, tobacco growers have to cope with the consequences of climate change, which makes it harder to plan agricultural activities. “This makes services like insurance and the importance of forward planning even more significant,” Genov stressed. While weather variations can always be expected, there were some abnormal events in the last few seasons: “In 2022, Malawi was hit by Cyclones Gombe and Anna while Cyclone Mandous affected the crop in Andhra Pradesh in India. In the Americas, certain origins, like in the Dominican Republic, report changes in the traditional rainy season while in Europe, there were periods of prolonged drought. In Cuba, arguably the most striking example, Hurricane Ian obliterated the crop used to produce premium cigars.”

    Cost of Production

    In his presentation, Genov also reviewed global leaf production, citing data from Universal Leaf. Driven by increases in the U.S., Brazil and Zimbabwe, flue-cured Virginia (FCV) rebounded slightly, to 1.73 billion kg, in 2021. In 2022, the FCV crop excluding China was again short, down to 1.64 billion kg. Brazil’s season, for instance, finished last year with 60 million kg less than in 2021. For 2023, leading markets are expected to increase production, which could lead to increased supply at the global level, Genov said.

    In Zimbabwe, production fell by 3 percent in 2022 to just over 200 million kg but was still higher than expected due to drought and the late rains improving the crop. The cost of production rose faster than tobacco prices, however, and is likely to continue increasing next year. “Farmers’ viability over the last two years has been significantly reduced,” said Genov. “In future, pricing will remain a crucial element in seeing which farmers stick with tobacco and which will move entirely to other crops. It is interesting to note here that Zimbabwe’s government has an ambitious target to stimulate production to 300 million kg by 2025 [see Tobacco Reporter’s special report on the Tobacco Value Chain Transformation Plan in May 2023]. Given the current progress of the market, this seems highly unlikely.”

    In the U.S., production cost put severe pressure on growers who are increasingly turning to other commodities. “Labor, energy and fertilizer cost will flag this particularly,” said Genov. “2022 has been said to be the most expensive crop to be grown in U.S. history.” For 2023, U.S. producers expect increasing demand with no relief in cost of production, Genov said, and it appears that China is back on the market.

    In China, meanwhile, tobacco production has been growing exponentially. The FCV crop reached an estimated 1.91 billion kg in 2022 and is expected to increase to 2 billion kg this year. Tobacco imports overcame their Covid-related drop of 2020 in 2021, according to Genov, who expects demand to remain strong based on local consumption patterns.

    Burley production decreased from 407 million kg in 2021 to 360 million kg in 2022. The crop is anticipated to bounce back to 460 million kg in 2023.

    Oriental production dropped from 154 million kg in 2020 to 119 million kg in 2021 and stagnated in 2022 at 117 million kg. Production of dark air-cured slightly increased from 108 million kg in 2021 to 113 million kg one year on. For the two latter crops, there is no estimate for 2023 yet.

    Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.
  • Best Practices

    Best Practices

    Photo: doidam10

    How to approach environmental assessments for the best chance of success

    By Adam Bonin and Antony Jones

    An Environmental Assessment (EA) is an analysis prepared in accordance with the U.S. National Environmental Policy Act (NEPA) to determine if a product’s approval would significantly affect the environment. It applies to all federal actions in the U.S., including regulations, policies, projects, licensing and permission granting. The assessments give insights into potential risks associated with a product’s manufacture, use and disposal and help manufacturers develop effective mitigation strategies to reduce or avoid possible environmental consequences.

    EAs therefore help regulatory agencies identify potential adverse environmental impacts from the manufacture, use and disposal of electronic nicotine-delivery systems and oral nicotine products. They are a small yet important part of premarket tobacco product applications (PMTAs) and modified-risk tobacco product submissions. The U.S. Food and Drug Administration requires manufacturers to submit EAs for each individual tobacco product, or stock-keeping unit, within a PMTA.

    An inadequate or absent EA will result in either a “refuse-to-accept” or a “refuse-to-file” order from the FDA. In 2021, the FDA rejected 4.5 million vaping applications on the grounds that they “lacked an adequate environmental assessment.” With companies spending millions on PMTA submissions, they cannot afford to miss out on approval due to such a small part of the process. So, what does a good EA look like?

    What to Include in an Environmental Assessment

    In general, an EA includes an executive summary, applicant details, description of the proposed action and purpose and need of the proposed action. Further EA sections include the identification of alternatives, including the proposed action and no action alternative, potential environmental impacts of the alternatives (affected environment [or existing conditions] and environmental impacts), cumulative impacts and mitigation measures. An EA is appropriate for submission if it is determined that the impacts of the proposal will not be significant or the FDA concludes a finding of no significant impact. Mitigation measures may be recommended if impacts are anticipated, to reduce them below the significance threshold.

    The initial stage of the EA process is building a well-defined project description, covering the purpose and need for the regulatory decision (marketing granted order) that triggers the requirement for an EA under the NEPA. The applicant will also need to include details of product components, product formulation (where applicable) and predicted sales projections for the first and fifth years. It is particularly important to include the mass of individual metals in product hardware components (e.g., devices, pods) to assess potential impacts at the end of life.

    A good EA includes a thorough screening and comprehensive modeling of product components (e.g., e-liquid ingredients), with all conclusions and results backed up with hard data. The evaluation of the potential release of materials to the environment should be quantitively assessed, with the resulting potential concentrations in the environment explicitly stated and compared with relevant ecotoxicity standards to determine the possible impact.

    Throughout, it is important to appropriately manage confidential information. EAs include both confidential and nonconfidential appendices, and it is important that these are prepared correctly. For example, if there is proprietary information in the e-liquid formulation, this would be best listed in the confidential appendices, as would sales and marketing projections. It can be difficult to know which information is appropriate for inclusion in the confidential apprentices, and working with an experienced team offers the best chance of success.

    Determining the Possible Impacts

    E-liquids typically consist of a mixture of ingredients, including propylene glycol, vegetable glycerin and nicotine. The formulation can be screened using a predictive tool to determine which ingredients are of most ecotoxicological concern and should be carried forward into the analysis. The selected ingredients can be assessed for estimated acute and chronic aquatic toxicity for aquatic organisms, including plants, fish and invertebrates, and then be assessed in subsequent fate and transport modeling.

    The EA should analyze the plausible scenarios for the impact of the identified substances being released into the environment, including quantitative release modeling. For example, this could include the possible impact of the material being released into surface water or soils at quantities considered reasonable based on predicted sales data.

    The project supply chain should also be documented, including details of manufacturing and shipping to retail entities. The environmental and social resources around U.S. manufacturing facilities require characterization to provide an understanding of the affected environment (existing or baseline conditions). The potential impacts of projects can then be evaluated based on changes to the baseline conditions—for example, if chemical mixtures or raw ingredients are accidentally released into surface water or chemicals are released down the drain during manufacturing.

    It is important that the EA is realistic. In our experience, the inclusion of conservative analyses appears to be the soundest approach. It may be tempting to conduct modeling for a wide variety of release scenarios, but if they are deemed unlikely by the FDA, you may receive a deficiency for evaluating unreasonable scenarios.

    Tips and Tricks

    • Start early. Considering the EA process early in the application can improve efficiencies, particularly for characterizing natural resources around U.S.-based facilities and engaging with manufacturers and other vendors to understand product supply chains.
    • Use a robust standard operating procedure. In an EA, it is vital that every section includes explicit information that satisfactorily evaluates the product against FDA requirements.
    • Choose an experienced team. Many businesses do not have employees with sufficient NEPA experience; in this case, we recommend working with a consultancy. NEPA-specific jargon and other regulatory nuances can be challenging for new practitioners.
    • Stay up to date. Attending FDA and NEPA meetings can be a great way to stay up to date with any changes in the guidance. In addition, manufacturers can engage directly with an FDA project manager if they receive deficiency comments.
    Adam Bonin is a senior consultant at Broughton with over 22 years of scientific consulting experience. He earned a Bachelor of Science degree in environmental management from the University of Rhode Island and a doctorate in environmental microbiology from Portland State University. Bonin also completed a postdoctoral appointment in microbial ecology at Oregon Health and Science University.
    Antony Jones is a managing consultant at Broughton with more than 22 years of experience in risk assessment with a focus on characterizing and reducing risks across the pharmaceutical, biotechnology, food, nicotine and environmental industries. He earned a Bachelor of Science degree in biology from the University of York and a doctorate in molecular biology and microbiology from Newcastle University. Jones also completed a postdoctoral appointment at King’s College London.

    Broughton is a global scientific consultancy-based Contract Research Organization serving industries in pharmaceuticals, next-generation nicotine-delivery products and cannabinoids. Its team has developed a robust and proven approach for preparing defensible NEPA-compliant EAs for the FDA PMTA. For more information, visit www.broughton-group.com/us-pmta-and-mrtp-nepa-environmental-assessments-ea.

  • Innovative Focus

    Innovative Focus

    Photos: Timothy Donahue

    TabExpo returned to the nicotine show circuit in Bologna, Italy, in May with innovative industry insights.

    TR Staff Report

    TabExpo is back. Since the inception of TabExpo in 1994, the industry trade show has provided exhibitors and visitors with interests in the nicotine industry an elite opportunity to showcase their products and network among contemporaries. This year, TabExpo was held at the BolognaFiere in Bologna, Italy, May 10–11, and visitors and exhibitors alike said the show exceeded their expectations.

    In November 2019, TabExpo was acquired by U.K.-based Quartz Business Media, owner and organizer of the largest network of tobacco and nicotine-related exhibitions and conferences in the world. This year’s event was attended by over 100 exhibitors and more than 2,000 visitors representing all aspects of traditional and next-generation nicotine products from leaf suppliers to e-liquid manufacturers.

    TabExpo is much more than a typical tobacco tradeshow. One highlight of TabExpo 2023 was its Innovations in Tobacco conference. The sessions mainly focused on the future of the nicotine industry and the roles sustainability and modernization will play. The congress sessions were often standing room only. Below is an overview of the sessions and the insights shared by the numerous speakers.

    Keynote: Flora Okereke, head of global regulatory insights and foresights at BAT

    Conversations on the regulatory environment in the nicotine industry can be complicated. During her keynote, Flora Okereke, head of global regulatory insights and foresights at BAT, told attendees that regulation is important because many of the industry’s tobacco harm reduction goals can be enhanced by the policy environment. However, regulation can also create an obstacle.

    Okereke said that beyond regulatory policy, innovation is driving the transformation from both within the manufacturing supply chain and the retail sector. “In the past year, there has been a huge upheaval as a result of innovation, as a result of acquisitions, as a result of what we are doing in a journey to transform our industry,” she said. “You can see this in the amount of products that are new and coming to the markets, and the technologies that are coming up, and the kind of ways that we are monitoring environmental issues.”

    Additionally, the nicotine industry is no longer made up exclusively by major tobacco companies. Most of the innovations, such as e-cigarettes, were developed by entities outside the traditional tobacco sector. When considering the regulatory environment for next-generation products, Okereke said that regulators should not regulate blindly and must take the time to consider the impacts regulation can have on harm reduction goals.

    “I will say that because of the transformation, because of the eagerness for us to move from smoking tobacco to our newer products, expectations that are being made without proper milestones are going to create problems,” she explained. “I can [also] tell you regulation, while it is not something that you do daily, it’s a critical accelerant—a critical catalyst for our industry. It can derail what we are doing, but also, it can support a moving forward. This is why we have to not ignore it and put our head under the table but to face it squarely and be constructive as to how we look at it.”

    One of the potentially most impactful regulatory decisions being considered that could affect nicotine is environmental policy. Okereke said that environmental protection is now at the top of everyone’s agenda: many governments, many nongovernmental organizations, and it’s a public policy priority. There is even an environmental meeting at the global level being held by the United Nations trying to formulate a treaty similar to the World Health Organization Framework Convention on Tobacco Control  that, when it comes to plastics, is probably going to change our industry, she said.

    “The tobacco control advocates are calling on the prohibition of filters, on disposables, on the treatment of waste,” said Okereke. “This is happening not just at a global level; it is happening in most of the markets. So the sector needs to work together in a constructive manner to agree and determine how it responds to what is coming,” she said. However, if governments can put in place a regulation that permits companies to give clear communications to consumers to help them understand the relative risk of various products, that kind of regulation would be a catalyst that should work for everyone.

    “If the regulator would look at some of these new products … and understand that the relative risk means that they could be incentivized, maybe in a fiscal way, that will enable adults who would like to move away from smoking to make that movement because we all believe that what they want, what society wants and to some degree what some smokers want, or our consumers, is to have the choice to move to a reduced-risk product,” said Okereke.

    Another major issue driving regulation is concern about youth access, especially in relation to next-generation products such as disposable vaping devices. “It’s almost the underpinning reason that justifies why regulators are taking very extreme measures,” said Okereke. “And I think it’s important that we look at it. I think it’s important that we find a solution that addresses this issue,” she said. “It is also because of this, the regulators say, [that] issues like flavors are being treated negatively. Whether you are a manufacturer or a person in the supply chain, [it] is important that we find the right solution to address [youth access].”

    Okereke also discussed the latest regulatory trend: tobacco “endgame” legislation, which is a tool to end the use of tobacco. Unfortunately, some countries are looking beyond tobacco and using that concept to call for an end to nicotine in any form. “Please don’t ignore the endgame scenario and think that it refers only to cigarettes,” she cautioned. “It doesn’t.”

    In the end, Okereke said that all sectors of the nicotine industry must join together to fight for sensible harm reduction policies that drive consumers away from combustible tobacco products. Now is the time to work together to give the government a single message that less risky nicotine products have a role to play in smoking cessation, she insisted. “We need to defend and protect that space for all of us, especially during the upcoming COP10 in Panama later this year,” she said.

    Okereke also urged the industry to stress to regulators the value of harm-reduction products ahead of the WHO gathering. “I think it is time for you to use your access to your government,” she said. “Remember, the parties are the ones mandated to make decisions at this meeting. Countries have the mandate to raise their voice and their opinion.”

    Keynote: Patrick Basham, director of the Democracy Institute

    Communication is a problem in harm reduction circles. During his keynote address, Patrick Basham, director of the Democracy Institute, said that many medical professionals, consumers and anti-nicotine campaigners believe the narrative that all nicotine products are dangerous. Furthermore, many of these people wrongly believe that nicotine rather than the chemicals released during combustion causes cancer. They believe this, said Basham, because anti-tobacco harm reduction lobbyists have told them so.

    “These lobbyists have told them [these misconceptions] are true because they don’t trust tobacco and nicotine consumers with the truth, so they must alter it for them,” said Basham. “Now, it’s indeed true that most well-funded public health institutions and stakeholders are rabidly anti-tobacco harm reduction. The World Health Organization is the most clear-cut example. You’ve got billionaire philanthropists funding global campaigns that, in concert with the WHO, incentivized national governments and their public health agencies to ignore or to disparage tobacco harm reduction’s demonstrated ability to improve public health.”

    Many consumers, meanwhile, are either uninformed or ill-informed about tobacco harm reduction, and the specific products central to its implementation. Basham said that the ignorance is deeply frustrating because prohibitionist politicians, philanthropists, regulators, public health organizations and academics have consciously erected barriers to better consumer understanding of harm reduction products.

    Even more frustrating is that the governments of many smaller-sized and medium-sized nations look to organizations such as the WHO, the U.S. Food and Drug Administration and the EU for case studies, regulatory models, bureaucratic signals and political cover regarding tobacco harm reduction. However, what “our rulers and rule regulators say and what people believe about tobacco harm reduction and reduced-risk products is neither the actual truth nor the entire truth,” said Basham. “The good news about tobacco harm reduction is that the bad news is wrong.”

    According to Basham, the tobacco harm reduction experience is a positive story. Although it’s hard to be fair and balanced about tobacco harm reduction politics, the reality is that some steps taken by governments and public health bodies have empowered tobacco harm reduction while other steps have retarded its progress, he said.

    A good many countries, international institutions and public health organizations are employing and advocating for tobacco harm reduction policies and proven strategies to reduce cigarette consumption. Many governments have adopted quite sophisticated harm reduction strategies and policy prescriptions. To date, nearly 70 countries have adopted regulatory frameworks on reduced-risk products, and an enormous number and variety of electronic nicotine-delivery system products are in the marketplace, with nearly 16,000 flavors available and global sales rising to more than $15 billion. Heated-tobacco products are available in over 50 markets worldwide.

    “Only one Western democracy—Australia—still illogically and irrationally requires its citizens to possess a nicotine prescription to vape,” according to Basham. “Snus is legally bought in 81 countries. Reduced-risk products are already being used by 112 million people worldwide, with approximately 82 million vapers, 20 million heated-tobacco users and 10 million smokeless tobacco users,” he said, citing statistics from a Democracy Institute study. “The evidence in favor of tobacco harm reduction as a complementary intervention to help drive down death and disease from smoking is, I suggest to you, robust.”

    All the countries that adopted a regulatory framework for less risky nicotine products subsequently reported a dramatic decline in smoking prevalence. Countries that embrace vaping have witnessed a decrease in smoking rates that is twice as fast as the global average. “We now have extensive international evidence that vaping is the world’s most effective smoking cessation tool. Snus’ extensive contribution to improvements in Swedish public health is well documented,” he explains. “Let me just highlight that over the last 15 years, Sweden slashed smoking rates from 15 [percent] to 5.6 percent. The EU’s average smoking rate, meanwhile, is 23 percent, 4.5 times higher than Sweden.”

    When Norway allowed snus products to be more widely available, cigarette smoking fell by half in just 10 years. Japan’s tobacco harm reduction policies have led to a remarkable drop in cigarette smoking. In October 2020, the smoking rate in Japan dropped to a record low of 16.7 percent. Between 2016 and 2021, domestic combustible cigarette sales in Japan declined by 43 percent. This decline was directly attributable to the availability of heated-tobacco products, according to Basham.

    “So, tobacco harm reduction truly is a refreshingly good news story. That’s the reason governments around the world are increasingly placing tobacco harm reduction at the heart of their anti-smoking strategies. Governments should legalize the import, export, sales, possession and use of reduced-risk products,” said Basham. “Reduced-risk products should be as widely available as tobacco products and available without a prescription.”

    Panel: Reinventing for Sustainability

    Solutions to environmental concerns are not individual contributions but are built upon a series of interlocking breakthroughs and tweaks. That presents an almost composite picture of progress in the nicotine industry. Chris Greer, CEO of TMA, expressed this notion as moderator for the panel “Reinventing for Sustainability.” The discussion centered on how innovations are at the forefront of producing sustainable nicotine products from packaging to production to distribution to consumption.

    Everyone touched on new product innovation and that it will take the entire nicotine industry to work together to achieve many sustainability goals. Packaging, for example, transcends all consumer products. Innovations in packaging can help nearly all consumer product companies achieve a percentage of ESG goals. “In packaging, we have to react and change because of the pressure from the government or the environment,” said Michael Pierse, sales director at IRPLAST. “In 2018 and 2019, in the plastics industry, in our company, we all of a sudden realized that sustainability and environmental impact was no longer just something difficult we’re talking about, but it had to be enacted.”

    There is no cigarette company that would allow cigarettes to be sold unpackaged without wrapping film to guarantee the consumer receives the product in the same state it was when it came out from the factory (although they cannot prevent retailers in many developing countries from selling cigarettes by the stick to smokers with low disposable incomes).

    “We were faced with a challenge. Our product is fossil-based. Every kilogram of polypropylene film made from fossil fuels emits between 3.5 [kg] and 4 kg of carbon dioxide into the environment. That’s a very heavy fossil footprint to be addressed,” said Pierse, who highlighted his company’s NOPP (natural oriented polypropylene) tape, a new generation of high-performing and eco-friendly adhesive tapes manufactured with 50 percent recycled materials.

    There has been progress, too, on the front of filters, which remain one of the most commonly littered items on the planet. Filtrona CEO Robert Pye said his company has 10,000 future filter designs in a storage facility at its innovation center. He said that Filtrona is committed to more degradable and sustainable products. The higher degradability and nonplastic options of its ECO range is clear evidence of this commitment, he said. At TabExpo, Filtrona debuted its latest plastic-free innovation, the ECO Tube Triple Carbon Filter.

    “We’re all on the journey together,” said Pye. “So even in our traditional filters, we have very good partners that we also develop traditional cigarette filters with reduced carbon effects and increased sustainability. A real game changer is the ECO range. This is something that we can see that can definitely transform the industry.”

    ECO range is born out of partnerships with Filtrona’s customers and suppliers. There are many different forms that Filtrona can move forward with its filter technology, but Pye said the ECO range will help both his company and the traditional cigarette manufacturers it supplies meet ESG goals.

    “I know from our sales and through China we’re seeing probably half of our developments now based in sustainable products within our range. Our customers are driving us that way,” said Pye. “We are seeing different sorts of materials supplies and equipment supplies which will help us progress further in the journey to supply more of the ECO range. Of course, to get all of these plans together in the [necessary] scale is something we need to work through as well.”

    Schweitzer-Mauduit International (SWM), too, has been working to improve the sustainability of its products. Last year, the company launched Evolute, a fiber-based filtering media. Alice Jaussaud, product manager in the engineered papers division at SWM, said that the company has observed an acceleration of the demand for alternative solutions that is reinforced by societal trends toward sustainability. “We can say that, in terms of innovation, we do whatever is possible or in our control to make it happen,” she said. “And then it is about working together; it is a lot about partnerships.”

    Also discussing filters, Luis Sanches of Greenbutts said that of the more than 5 trillion cigarettes produced globally each year, the majority end up in the environment after consumption. Cigarette butts are the most littered plastic item on earth. While most of a cigarette’s components quickly disintegrate when smoked or disposed of, the filter will stick around for some time. Around 98 percent of cigarette filters comprise cellulose acetate (CA), a polymer that is slow to degrade in the environment. It can take up to 14 years for a CA filter to degrade, depending on the conditions of the environment where it has been discarded.

    One challenge, according to Sanches, is ensuring that a better biodegradable filter doesn’t change the user experience. “We want the consumers to have the same or even better experience that they have currently,” said Sanches. “This is pretty much our mission.”

    Greenbutts spent almost a decade designing and developing filters that provide comparable taste and filtration properties as current CA filters but will disperse in water within several minutes with agitation and begin to degrade in compost within several days, according to Sanches. “You don’t want your wine to be affected by the glass that you’re drinking. And you don’t want your pasta or your lasagna to be affected by the plate it’s served on. The same thing for a cigarette,” he said. “Nobody wants the filter to alter their taste of the cigarette.”

    The machinery producing the filters is integral to helping companies meet their ESG goals. Montrade has led the way in making machines for sustainable products with production speeds of 5,000 filters per minute. It is also creating sustainable packaging solutions, according to Antonella Giannini, co-founder and sales director of Montrade.

    “Montrade always strives to develop for the ever-changing and fast-approaching future,” she said. “We work to provide the means for the industry to transition into the next generation of environmentally focused products, including biodegradable filters and plastic-free alternatives for multiple product categories,” she said when discussing her company’s partnership with Greenbutts. “When designing for the ocean and environmental sustainability, our innovations in paper filter technology along with novel plant-based technology, such as the Greenbutts’ water-dispersing substrate, will work together to meet the requirements of the European Union’s Single-Use Plastics Directive.”

    Summarizing the session, Greer stated that, fundamentally, meeting ESG goals is about trust. “The most important ingredient in all of the things that you are doing is trust; the trust that you have between yourselves and your clients, the trust that you have with your internal teams,” he observed.

    Keynote: Tim Phillips, managing director of Tamarind Intelligence

    The global e-cigarette is worth more than $50 billion. There are also now more than 100 million vapers worldwide, according to Tim Phillips, managing director at Tamarind Intelligence. This year marks the 10th anniversary of Wells Fargo Managing Director Bonnie Herzog’s famous prediction that vaping products would overtake the combustible cigarette market. Herzog’s prediction was bold, said Phillips, adding that she could not have imagined the regulatory firestorm suffered by vaping products.

    Phillips noted that in another 10 years, Herzog could prove to be correct, however. “I was doing some very back-of-the-envelope calculations this morning, but I think if you give it another 10 years, we might well get there,” he said. “We’ve got combustible cigarettes slowing down in pretty much all Western markets. We’re seeing growth rates in some of these novel nicotine products in the 10s or many more percent points per year. And over a period of 10 years, I think we may well see [combustibles] replaced. I think my message to you is just be really careful of that. I think we’re going to see a massive acceleration of alternatives for nicotine products, and we will see a replacement of combustible tobacco over time. It’s just a matter of time.”

    Next-generation nicotine products come in three dominant varieties: nicotine pouches, heated-tobacco products and vaping products. Phillips said the segment is growing fast but at different rates in different areas of the world. It’s also very fragmented. “It’s completely different to traditional combustible cigarettes,” he said. “The market is growing in all sorts of different ways, and there are enormous opportunities to benefit from some of that growth. Consider nicotine pouches … we’ve got a fragmented market in a similar kind of format to vape about seven [years] to 10 years ago. There are more than 50 brands in some of the markets, including in European markets. And we’ve got more than 500 products in each of these markets. That’s a huge amount of fragmentation.”

    Phillips said his organization, which provided the data for his keynote address, originally thought the nicotine pouch would be an interesting product for consumers who are already using chew tobacco products in the U.S. or a snus product in the Nordic countries. “What we’re seeing is this product category is really of interest to consumers in all sorts of markets, and we see lots of crossover with other types of products,” he said.

    According to Phillips, the data shows a lot of multi-usage with next-generation nicotine products, especially pouches. “Consumers have moved from a mono market where the only way to have nicotine was to smoke cigarettes or another type of combustible tobacco,” he said. “We’re moving into a world where that’s completely different, where there are multiple ways of using products. And what we’re finding is the consumers are faced with a huge choice of different types of products and using many of them at the same time.”

    Such fragmentation is less evident in the market for heated-tobacco products. According to Phillips, the data shows huge growth in the number of compatible products. Many of them are hardware, and many of the vape companies’ manufacturers in China are now also manufacturing compatible heating tobacco hardware.

    “We’ve seen a massive growth in the number of compatible heat sticks, and many of them are nontobacco-containing—made out of tea, made out of various other products,” said Phillips. More products are competing with the major tobacco companies’ heated-tobacco brands, and Phillips said one of the reasons this is happening is regulation.

    “In Europe, as many of you know, we’ve got a directive banning flavors for heated-tobacco products. It needs to be implemented in European member states, and it is brought into their local law by July this year, and it should be implemented from October,” he said. “We’ve got a couple of countries that have implemented the flavor ban, but there are plenty of countries that have [not].”

    In the world of vaping, Phillips said that massive growth is happening in the disposable products segment. This started in the U.S. After the FDA banned vape shops from selling flavored prefilled pods, disposables began to take over the market. Today, there are thousands of new disposable products in the market. It is also the segment most blamed, after the fall of Juul, for the rise in youth vaping. Phillips said disposables drove the youth uptick, not flavors as most regulators would claim.

    “What I’m saying is it’s not really flavors that are driving this. But it is something where youth are using disposable products much more than an older age group,” he said. “We’re seeing those that initiate with vaping; we’re starting to see a younger age group come through and initiate into vape. Of course, that’s going to happen as the sector grows … the predominant product that those age groups are using is the disposable product,” said Phillips. “There is a correlation, if you like, between disposables and youth. And there’s no getting away from it. I think the industry just needs to face up to that.”

    Keynote: Simon Clark, director of FOREST

    If people want to smoke, they should be allowed to smoke. It’s not illegal to smoke cigarettes or vape or eat a giant cake. Today, even when there are consumer panels, every speaker tends to be an advocate of vaping. Current smokers in defense of smoking, like Simon Clark, are conspicuous by their absence. Simon Clark, director of FOREST, explained that during a tobacco conference last year, one of the first speakers got a round of applause when he told the audience that it had been six years since he had successfully quit smoking.

    “Now, just think about that for a moment. A keynote speaker at a tobacco industry event is applauded for having stopped smoking. Now, for a moment, I thought I’d stumbled into a meeting of addicts anonymous,” said Clark.  

    FOREST, the Freedom Organization for the Right to Enjoy Smoking Tobacco, was founded in 1979. Clark said that the organization fully accepts the health risks of smoking but insists that the debate is not just about health. It’s also about freedom of choice, personal responsibility, risk and the infantilization of society.

    “We therefore represent adults who know about the health risks of smoking but choose to smoke and don’t want to quit,” said Clark. “We also represent former smokers like myself. People who are tolerant of smoking believe that smokers are unfairly discriminated against and are opposed to excessive regulations on consumer products such as alcohol, tobacco and sugary drinks. I’m often asked why, as a nonsmoker, I defend the rights and interests of confirmed smokers. By this, I mean smokers who don’t want to stop. I try to explain that I genuinely think smokers are treated appallingly these days, whether it’s comprehensive smoking bans, punitive taxation, creeping prohibition or the general denormalization of a perfectly legal habit.”

    Clark said that even at tobacco industry events, the thinking appears to be that anti-smoking campaigns and legislation don’t affect nonsmokers. Or people believe it’s impossible to win the battle, so just ignore the war. The problem with that attitude is that it invites advocates of the nanny state to move on to issues such as alcohol and food. “Some call this the slippery slope,” said Clark. “We’ve been warning people about this for more than 20 years. I think you’ll appreciate [that] it’s actually happening because alcohol is under increasing attack, as is the type of things that we choose to eat.”

    Twenty years ago, no government and relatively few politicians enjoyed being pigeonholed as a supporter of the nanny state. Public smoking bans changed the narrative because although they didn’t join most of the public support at the time of their introduction, smoking bans are now talked about as an allegedly popular example of the nanny state and action, said Clark.

    “A narrative has also developed suggesting that smoking bans have been an enormous success. We’re told that cafes and bars are no longer the horrible smoky environment of old, that smoking rates fell [because of] smoking bans. And public health has dramatically improved. Although there is relatively little evidence to support that thesis,” said Clark. “Nevertheless, the so-called success of public smoking bans around the world has clearly encouraged public health campaigns and governments to press on with other restrictive measures. Many anti-smoking policies are presented as examples of a benign nanny state that wants to help people make the right choices. However, there is nothing benign about it. We are increasingly living in a bully state in which education has been replaced by coercion and compulsion.”

    According to Clark, there is nothing fair or benign about the current rates of taxation on tobacco. The current rate of tax on an average pack of cigarettes in the U.K., for example, is about 86 percent. The aim is to force smokers to quit, but it discriminates against those on low incomes. Sometimes if people don’t quit, it can force fervent poverty. Again, this is the mark of a police state.

    “In my view, tobacco control is no longer about public health,” said Clark. “Nicotine is a drug; so is alcohol; so is caffeine. But people choose to consume these products. No one is forced to smoke tobacco, drink alcohol or consume caffeine. The anti-smoking campaigners also argue that the tobacco industry targets children. The truth is that many teenagers like to experiment. Many [youth] experiment with alcohol, some with tobacco, and more recently, e-cigarettes. I don’t condone it, but it’s called growing up. In my experience, most of the attacks on the tobacco industry have nothing to do with health. It’s politics, pure and simple.”

     

    PANEL: Next-Generation Products: Delivering Innovation

    Innovation isn’t a light switch. It isn’t a process that happens suddenly. During a panel discussion on the topic, Jackie Zhuang, president of Macau Chongva Tobacco Factory, said that an easy way to understand innovation is to look at patents. As of the end of April, the estimated accumulated patents for vaping products from the four largest manufacturers in Europe plus Juul Labs was 69,500 patents, according to Zhuang. The number for the top 15 Chinese factories combined is an estimated 24,239.

    “The Chinese e-cigarette industry is working very hard to catch up in the fields of patent,” said Zhuang. “And the number we have from last year will be Chinese e-cigarette companies combined; we have 60 to 100 patents applied last year. And outside China, only 2,800,” explained Zhuang. “The innovation came from the manpower invested in Chinese e-cigarette companies (where an estimated 6,000 researchers are working in the e-cigarette industry).”

    China has long been the epicenter of e-cigarette manufacturing. Modern e-cigarettes were born there, and Shenzhen is home to 90 percent of all e-cigarette manufacturing worldwide. Zhuang said that Chinese manufacturers don’t often create new products; they specialize in making innovative products better. Zhuang said that for Chinese manufacturers, innovation is driven by their customers. “The customer wants something, and we offer a lot of [options] for the consumer,” he said. “When international brand owners try to develop their brands, they are [surprised at the types of innovations we can offer] their customers.”

    Phoebe Dong, regional marketing manager for Heaven Gifts, a major vaping industry manufacturer based in Shenzhen, agreed with Zhuang that most innovation is driven by the consumer. She said it is also driven by the maturation of research and development. She said that the end user doesn’t often know how technology in materials improves the function and the performance of vaping products. The consumer only sees the finished product and not the progressive innovations.

    “Competitive pressure can also drive companies to innovate to maintain their market position,” said Dong. “The emergence of new products and technologies … industry trends, technology trends, market trends and consumer trends all make an impact on innovation.” There are “two forces pulling there …. It’s competitive pressure and then it’s also your internal passion. You want to make a better product; you want to improve things.”

    Regulation also has an impact on innovation. Ian Fearon from McKinney Regulatory Science Advisors said that when creating new products, innovators must understand what the product’s potential impact on public health is. Then they need to look at the regulatory environment and which markets they want to go into.

    “Is it a permissive environment, such as the U.K. or some of the European countries? Is it a market that is very difficult to get into, such as the United States? And then with both of those aspects together, developing a rigorous assessment framework with which you can assess that innovation, generate the data which the regulators require for you to place that product on the market and then conduct those studies,” explained Fearon. “Use scientific experts to interpret the data, to translate that data into something that the regulator can understand and will want to approve for the market. Conduct those studies and then push the data out to the regulator.”

    Fearon said that to get new products through the regulatory process, innovators need to tell the story of a product so that the regulator understands the product and its potential impact. He said much of McKinney’s work is in creating that narrative, which takes complex scientific data and translates it into something tangible that the regulator can understand.

    “It comes from taking the clinical data, the TOPS data, the chemistry, taking any clinical data, nicotine absorption studies, taking any behavioral data, such as intentions to use studies,” said Fearon. “And integrating all of that into a narrative, which gives FDA information on the public health imperative of the innovator, which is really what FDA is looking for. If you market this product in the United States, will it improve public health? And it’s an unusually complex area, and it takes great expertise to integrate all of those very different and complex scientific disciplines into a single story. And I think the other thing you have to bear in mind as well with FDA is that they are looking, as far as I can tell, for you to provide words that they can put in their authorization letter … it’s almost like you have to help FDA make the decision that you ultimately make with the narrative and provide them with a sub-narrative that they can tell to the American public.”

    While innovation may be easier in countries with less stringent paths to market, bringing products to market in the U.S. is only getting more complicated and expensive. After spending billions of dollars on developing a product, in a country with a regulatory regime like the U.S. there is no guarantee that the product will ever make it to market.

    “You don’t know how long it’s going to take before we go [to market or the] innovation starts making money or starts improving public health. It could be three years, five years, nobody really knows,” said Fearon. “I think then, the contrast there is in a country that may contribute [to innovation in the vaping industry] like the U.K., which is open to innovation. It’s actively advising smokers to start vaping. Which is very different to what happens in the United States. Even to the point where we are seeing innovation within the U.K. government in that they are spending a million pounds in April, giving e-cigarettes to pregnant women—I mean, that’s just unheard of when you think about it. That’s an example of the regulator innovating to help the manufacturers innovate, which I think is an incredible example of the two different contrasts we have.”

    Fireside Chat: George Cassels-Smith, CEO of Tobacco Technology Inc.

    Flavorings in nicotine products are interesting. Most consumers think it’s just about taste. The reality is that few understand tobacco product flavorings and how they are produced. George Cassels-Smith, CEO of Tobacco Technologies Inc. (TTI) and eLiquiTech, said that TTI separates itself from its competition by tailoring each of its flavors to the customer’s application.

    “I don’t have a library, even though I’ve done 300,000 flavors. I don’t pull anything off the shelf,” said Cassels-Smith. “I innovate new flavors in the direction of my customer’s request. I might [have] several iterations in a portfolio first … and we then choose the direction that we would want to continue to develop. And ultimately, that becomes a unique flavoring system that is only for that particular customer.”

    Consumer testing and the evaluation of the product are at the heart of what TTI does for its clients. When a TTI salesman goes out to visit the customer and receives a project, he takes back all those requirements and works with the individual flavors within the profiles requested by the customer. TTI then has a team of sensory pros to help evaluate the different creations.

    “It’s usually three, four, five weeks for one single flavor,” said Cassels-Smith. “We save that company all that development time internally, and we give them the turnkey operation. And we call it joint development because it always has the input of the customer.”

    When the U.S. Food and Drug Administration began its crackdown on flavors in e-liquids, Cassels-Smith feared it would create a perception that TTI would stop innovating, which the company does constantly. However, TTI and eLiquiTech only had one facility, located in the U.S. state of Maryland, serving its global client list. He said the solution to that issue was to build a second facility in Assisi, Italy. There, he says, the TTI team is combining art and science.

    “Initially, it was just to have a second facility that was located close to product development. But with the advent of Covid and the disruption in supply chains, we found that the bifurcation of manufacturing greatly assisted us in our delivery and time. And that became very critical,” explained Cassels-Smith.

    Cassels-Smith also discussed how his company was the global supplier of synthetic nicotine produced by U.K.-based Zanoprima Technologies. According to him, the problem with extracting nicotine from tobacco is that it delivers an impurity profile that would contain potential carcinogens. “We find them mainly in two forms—tobacco-specific nitrosamines [TSNAs] and heavy metals. The virtue of the synthetic nicotine is that it doesn’t have a plant-root system that can absorb heavy metals, and since the starting material is a vitamin, it’s clean and it has no heavy metals, and I cannot develop TSNAs,” he said.

    Synthetic nicotine is not new. Nicotine was first synthesized in 1904. Molecules such as nicotine may exist in mirror-image forms with identical chemical makeup but sometimes differing biological activity. The nicotine molecule possesses chirality, meaning it exists in two mirror-image versions called enantiomers or stereoisomers. Nicotine comes in left (S) and right (R) forms. The (S)-isomer of nicotine greatly predominates in tobacco leaf, which contains only small amounts of the (R) variant (0.1 percent to 1.2 percent). Most synthetic nicotine has equal parts of both the (S)-isomer and (R)-isomer. Zanoprima’s product, SyNic, only has the (S)-isomer—the one that holds all the psychotropic effects that nicotine consumers want, according to Cassesls-Smith.

    When dealing with unique products in the nicotine industry, such as flavor profiles or synthetic products, competition can be fierce. There are also regulations that boost black markets and counterfeit goods. On the flavoring end, if you make a profile that does well in the market, it becomes a target. And other people might try and imitate it. And through reverse engineering, you can usually get fairly close, not exactly, he said.

    Cassels-Smith said some of the same issues are being experienced by the synthetic nicotine he distributes for Zanoprima. They developed an enzymatic process to create it, and when you’re the first to develop new technology, you can get a broad patent to prevent anybody else from imitating your product. Zanoprima has patents in 48 countries for its synthetic nicotine process.

    “If anybody is using an enzymatic nicotine and selling it in the market, Zanoprima is the sole patent holder in that market. But unfortunately, when it gets published, people can imitate,” said Cassels-Smith. “What we’re seeing right now is in the disposable market, which is the dominant global player, every one of them is using synthetic nicotine from an enzymatic process. And they’re selling them in markets that are violating the Zanoprima patent.”

    Cassels-Smith said he is in the process of taking legal action. “The legal process begins, but if anybody has ever been in the lawsuit, it’s the biggest nightmare in the world. Litigation costs are high,” he said.