Category: Business & Finance

  • 22nd Century Enters Agreement with Cookies

    22nd Century Enters Agreement with Cookies

    Image: Tobacco Reporter archive

    22nd Century Group announced a new three-year exclusive license and distribution agreement with Cookies, a global hemp/cannabis company. The brand was founded in 2010 by CEO, rapper and entrepreneur Berner and Bay Area breeder and cultivator Jai.

    “This transformational strategic license, manufacturing and distribution agreement with Cookies establishes the foundation of an innovative new CDMO plus distribution business model for 22nd Century at a time when mass market channels urgently need to find new, high-margin, high-velocity products to meet the rapidly growing consumer demand for CBD products,” said James A. Mish, CEO of 22nd Century. “Our complete, vertically integrated capabilities represent the first and only industry option providing Cookies’ category-leading CBD brand with a single-source, national solution across its entire family of products.”

    “We are incredibly excited to expand our partnership beyond GVB with the 22nd Century Group. They have undoubtedly put together one of the most impressive teams in the space, and we look forward to expanding the national distribution of Cookies non-THC products together,” said Parker Berling, president of Cookies.

    The exclusive license with 22nd Century covers all Cookies branded non-Delta-9 THC, hemp-derived cannabinoid consumer packaged goods, including sourcing of all ingredients and APIs; white-label manufacturing of vapes and other CBD products; and category management through retail distribution.

    GVB Biopharma, a 22nd Century company, has manufactured various Cookies products for the past three years and under this new agreement will manufacture Cookies’ market-leading products, expected to account for more than half of Cookies’ non-Delta-9 cannabinoid sales.

    The integrated go-to-market sales and distribution components of the agreement will leverage 22nd Century’s veteran consumer packaged goods sales team, which plans to distribute Cookies products in up to 18 markets targeted for the rollout of the company’s innovative VLN products during 2023.

    The CPG sales team will target a market of approximately 60,000 retail stores consisting of independent retail, discount tobacco outlets and vape shops in nonrecreational states serviced by its network of top regional distributors and chain discount tobacco outlets. Products will also be available on the Cookies e-commerce website.

    “Cookies products are a natural fit to the same points of sale as our FDA [U.S. Food and Drug Administration] MRTP [modified-risk tobacco product]-authorized VLN products. The combination of these two offerings will enhance our sales team’s product portfolio with a larger suite of small-footprint, high-velocity, high-margin CBD products, with Cookies’ internationally recognized products serving as a cornerstone brand as we build out this innovative hemp/cannabis CDMO+D platform,” said John Miller, president of tobacco products at 22nd Century.

  • PMI Releases Integrated Report

    PMI Releases Integrated Report

    Image: PMI

    Philip Morris International released its fourth annual Integrated Report. Informed by a formal sustainability materiality assessment, the report aims to provide an objective description of the company’s business model, governance and management, strategy and performance.

    “Despite its many tests, 2022 was a remarkable year that brought our employees closer and saw us make measurable strides toward achieving our purpose,” said Jacek Olczak, CEO of PMI. “We are progressing toward our 2025 aspiration of becoming a majority smoke-free company and ultimately phase out cigarettes. While a transformation of this magnitude and complexity cannot be achieved overnight, we are committed to making it happen as fast as possible. It is through constructive engagement that we will accelerate the pace of meaningful and impactful change and complete our transformation for good.”

    Building on its ESG framework, PMI developed eight strategies targeting the company’s most pressing areas of impact. To accompany these eight strategies, PMI established 11 goals, which form the basis of its 2025 Roadmap, and 19 key performance indicators (KPIs) to measure progress via its Sustainability Index. Each KPI is also aligned with one of two drivers: product sustainability (11 KPIs) or operational sustainability (8 KPIs).

    “Nonfinancial information is increasingly being used by external stakeholders to assess and compare a company’s performance to others, including the financial community in their analyses and investment decisions. It is key to the integrity of PMI’s reporting that the information and data that we publicly disclose accurately reflect our company’s progress, following clear calculation methods,” explained Emmanuel Babeau, chief financial officer of PMI.

  • STG Announces Annual Meeting

    STG Announces Annual Meeting

    Image: MarekPhotoDesign.com | Adobe Stock

    Scandinavian Tobacco Group’s annual general meeting will be held Thursday, April 13, 2023, at 4:30 p.m. (CEST) at the office of Kromann Reumert, Sundkrogsgade 5, 2100 Copenhagen.

    Instead of attending in person, shareholders have the opportunity to follow the general meeting via live webcast transmission on the Investor Portal (available at http://investor.st-group.com). The general meeting and the webcast will commence on April 13, 2023, at 4:30 p.m. (CEST).

  • Universal Recognized as Supplier Engagement Leader

    Universal Recognized as Supplier Engagement Leader

    Image: pauchi | Adobe Stock

    Universal Corp. has been recognized as a 2022 Supplier Engagement Leader by CDP, a nonprofit charity that runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. This is the second straight year Universal has earned this recognition. The CDP’s Supplier Engagement Rating system independently evaluates how effectively companies are engaging their suppliers on climate change, using the CDP’s annual climate change questionnaire that covers governance, targets, scope 3 emissions and value chain engagement. The top 8 percent of assessed companies were selected as 2022 Supplier Engagement Leaders.

    “We are honored to once again be recognized by CDP as a Supplier Engagement Leader,” said George C. Freeman III, Universal’s chairman, president and CEO. “At Universal, we work in partnership with our suppliers to reinforce the sustainability of our supply chains and meet our climate change goals. Universal is committed to setting high standards of social and environmental performance.”

  • Kaival Brands Signs Sales Broker Agreement

    Kaival Brands Signs Sales Broker Agreement

    Photo: Bidi Vapor

    Kaival Brands Innovations Group, the U.S. distributor of all Bidi Vapor products, has entered into a sales broker agreement with a prominent U.S. broker to expand access to Bidi Vapor products from its current foundation of convenience store distribution into new retail channels, including discount, grocery and mass merchandisers.

    Eric Mosser

    “As we look to push distribution into more channels beyond the convenience stores, we are excited to announce a new agreement that gives us potential access to over 40,000 new locations,” said Eric Mosser, president and chief operating officer of Kaival Brands, in a statement. “We believe this agreement, along with our recent announcement of other new distribution agreements, further validates our reputation as a good actor providing adult consumers with the highest quality vape experience possible, and we look forward to working with all of our commercial channel partners to expand our revenue opportunities.”

    “We are excited to further increase the reach of Bidi Vapor and its premium vaping device, the Bidi Stick, into potentially more distribution opportunities throughout multiple retail channels,” stated Russell Quick, president of QuikfillRx, the company’s third-party sales and marketing vendor. “With our feet firmly in the convenience store space, it is time not only to grow our existing footprint but to extend into more channels, like dollar and grocery stores, that meet our robust identification verification and youth access prevention requirements.”

  • Altria to Acquire NJOY Holdings

    Altria to Acquire NJOY Holdings

    Photo: tatsianamaphoto

    Altria Group has entered into an agreement to acquire NJOY Holdings for approximately $2.75 billion in cash. The transaction terms include additional $500 million in cash payments that are contingent upon regulatory outcomes with respect to certain NJOY products.

    “We believe we can responsibly accelerate U.S. adult smoker and competitive adult vaper adoption of NJOY Ace in ways that NJOY could not as a standalone company,” said Altria CEO Billy Gifford in a statement. “We believe the strengths of our commercial resources can benefit adult tobacco consumers and expand competition. We are also excited to welcome NJOY’s talented employees to Altria at closing.”

    “As a result of this transaction, Altria’s enhanced smoke-free portfolio will include full global ownership of products and technologies across the three largest smoke-free categories and a joint venture with JT Group for the U.S. commercialization of heated tobacco stick products.”

    “We are excited to add NJOY’s e-vapor intellectual property as a new platform that we believe we can build on to help more adult smokers transition to smoke-free alternatives,” said Olivier Houpert, Altria’s new chief innovation and product officer.

    Altria will hold a conference call at 9 a.m. Eastern Time on March 6, 2023. Access to the live webcast is available at. A replay of the webcast and a transcript will be available on the same website following the event.

    In 2022, the U.S. vapor category comprised nearly 14 million U.S. adult tobacco consumers, including 9.5 million exclusive adult vapers, according to Altria. The segment  generated approximately $7 billion in U.S. retail sales and represented approximately 15 percent of total estimated equivalized U.S. tobacco volumes and more than 50 percent of total estimated equivalized smoke-free tobacco volumes.

    To date, the U.S. Food and Drug Administration has approved the marketing of 23 vapor products and devices. In 2022, NJOY received marketing granted orders for the NJOY Ace device, along with several tobacco-flavored pods. The regulatory agency is still reviewing NJOY’s premarket tobacco product applications for several NJOY menthol-flavored e-vapor products.

    Altria said it had multiple sources of funding for the deal, including cash from a $2.7 billion agreement with Philip Morris International last year for the IQOS Tobacco Heating System.

    The NJOY deal follows an announcement by Altria that it would exchange its entire minority investment in embattled Juul Labs for a nonexclusive global license for certain of Juul’s heated tobacco intellectual property.

  • ITC shares Surge on Adani Worries

    ITC shares Surge on Adani Worries

    Image: Amazing Studio

    Shares in tobacco manufacturer ITC have increased more than 75 percent as investors seek stability in the Indian stock market, which has been churning with concerns about corporate governance following Hindenburg Research’s allegations against the Adani Group.

    “ITC’s stable cash flow and dividends have won hearts of investors in this volatile environment amid Adani’s troubles and inflation,” Sameer Kalra, founder of Target Investing in Mumbai, told Bloomberg. “The company is also expected to unlock value of its noncigarette businesses.”

    ITC not only offers attractive dividend yields and returns on equity, but it also ranks top in a Bloomberg Economics analysis of governance, liquidity and leverage at Indian conglomerates.

    ITC has gotten a further boost from stronger-than-expected third-quarter earnings. In early February, ITC reported a profit of INR50.31 billion ($614.52 billion) in the October–December quarter, up from INR40.56 billion in the comparable 2021 period. The company attributed the increase to strong cigarette sales and steady demand for its packaged foods.

  • PMI, BAT Recognized for Gender Equality

    PMI, BAT Recognized for Gender Equality

    Image: melita | Adobe Stock

    Philip Morris International and BAT were included in the 2023 Bloomberg Gender-Equality Index (GEI).

    PMI made the index for the third year running, achieving an overall score of 80.6 percent.

    “Achieving gender balance at all levels of the company is one of our top priorities, and I am delighted that our efforts are recognized again in this year’s index,” said Silke Muenster, chief diversity officer at PMI. “While we are making significant progress, we know we need to keep our foot on the acceleration pedal. An inclusive workplace that leverages the full talents of both women and men is crucial to our smoke-free vision, making our organization more innovative, resourceful and engaged.”

    In 2022, PMI achieved its target of ensuring at least 40 percent female representation in managerial roles and announced a new target to achieve 35 percent of women in senior roles by the end of 2025, among other targets.

    BAT, which participated in the index for the first time, received a score of 75 percent. BAT was recognized for creating an inclusive culture for women via its recruiting initiatives, adoption of family-friendly policies, sponsoring programs dedicated to educating women, and support of community programs. Inclusion in the index follows BAT being named as a Global Top Employer for a sixth successive year.

    “Recognition in this year’s Bloomberg Gender-Equality Index demonstrates our commitment to addressing gender diversity and highlights our concerted global efforts to provide transparent reporting,” said Hae In Kim, BAT’s director of talent, culture and inclusion. “With more than 50,000 employees worldwide, our diversity and inclusion strategy is truly global, and I continue to be incredibly proud of the collective efforts made by all our employees.”

    The GEI measures gender equality performance globally across five pillars as set by Bloomberg: leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and external brand. The 2023 Bloomberg GEI comprises 485 companies from 45 countries and regions.

  • KT&G Refuses Ginseng Spinoff

    KT&G Refuses Ginseng Spinoff

    Photo: KT&G

    KT&G has refused to spin off its ginseng business as requested by activist investor Flashlight Capital Partners, reports The Korea Herald.

    “The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said.

    Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.

    Flashlight Capital Partners has been putting pressure on KT&G to increase dividends and spin off its ginseng unit into a separate listing, among other things. 

    KT&G plans on initiating a share buyback program and aims to increase its overseas sales to over half by 2027. To raise the needed capital, KT&G can sell property assets and borrow from banks, according to Bang.

  • Enduring Legacy

    Enduring Legacy

    Packing and pressing station for tobacco | Photo: Godioli & Bellanti

    Celebrating 100 years in business, Godioli & Bellanti attributes its success to offering “quality machines at truly unbeatable prices.”

    By George Gay

    Lorenzo Curina | Photo: Godioli & Bellanti

    After three years of subdued demand for tobacco industry primary processing equipment, interest is picking up, according to Lorenzo Curina, chief executive officer and sales director at the primary machinery designer and manufacturer Godioli & Bellanti.

    There was now increasing demand for complete processing lines that were compact and uncomplicated, a demand that was being driven by a growing interest in the production of cut rag, he said in an emailed reply to questions.

    At the same time, there was a trend by major cigarette manufacturers to require the relocation and/or the refurbishment of existing equipment, projects for which Godioli & Bellanti, with its 100 years of experience in the business, was well qualified to undertake. The company’s engineering skills and experience enabled it to repair, rebuild, recondition or upgrade all types of primary equipment while its organizational skills and flexibility meant it could navigate the necessary logistics involved.

    In fact, an indication of the engineering and logistical skills the company can call on was demonstrated when, in 2018, it shipped and delivered what was believed to have been one of the tobacco industry’s biggest direct conditioning cylinders, which was 14 meters long, 3 meters in diameter and capable of processing flue-cured Virginia tobacco at a rate of 20 tons per hour.

    A Pioneer

    Godioli & Bellanti was established in 1923 by Gino Godioli and Angelo Bellanti, whose initial focus was on making agricultural implements, especially those aimed at helping the mechanization of tobacco production, since the Umbria region, where they were based, was one of the most important areas in Europe for the cultivation of flue-cured tobacco.

    After the passing of the founders, Godioli & Bellanti was, in 1963, turned into a limited company, which was the beginning of a transformation. Under its new designation, Godioli & Bellanti SpA, the company moved into new and challenging areas. It developed new technologies for the tobacco industry, becoming Italy’s first supplier of tobacco machinery to the tobacco manufacturing sector, which later included the multinational companies that established operations in Italy and elsewhere in Europe.

    The transformed company specialized in turnkey projects, which meant that it supplied, as well as machinery, services such as heating and lighting systems. And this breadth of operation allowed it to gain considerable expertise in machine and whole-factory design.

    Initiatives such as these have been continued and are continuing. Although the company is known for its tobacco industry services, it operates in other industries, most of them natural outcrops. It offers machinery and processing lines for medicinal herbs and other plants, including mechanized equipment for the cultivation of these plants, along with machinery for drying and dehydrating; cutting, threshing and classification; and mixing and blending. It offers, too, continuous drying plants for food products.

    Entering New Fields

    Processing line for medical herbs | Photo: Godioli & Bellanti

    Meanwhile, the company’s experience in the field of herbs was adapted to allow it to enter the field of industrial hemp processing, where its processing lines provide for the separation of the plant’s fiber, hemp, seeds, flowers, leaves and stems. This is an important and growing side of the business because the products that are generated are used in a wide range of industries, including those concerned with pharmaceuticals, textiles, foodstuffs, veterinary products and bio-building. Less well-known, perhaps, is the company’s work with tree seeds. It was the first company to develop a tree seed extraction system, and it now offers complete, custom-designed turnkey plants for the extraction and selection of tree seeds.

    Aside from its interests in food and related products, the company offers biomass driers that function with recovered thermal energy, including driers for woodchips and sawdust. And it offers machines and complete processing lines for producing glass-reinforced pipes and sleeves, using continuous filament winding technology.

    Custom Offerings

    Drying lines for tobacco | Photo: Godioli & Bellanti

    But a large part of its business is concerned with tobacco, for which it can supply equipment for auxiliary plants, threshing lines and, of course, primaries. For auxiliary plants, where the leaf tobacco process begins, Godioli & Bellanti is able to offer, among other items, conveyor belts, picking lines, feeding and blending tables, tipper feeders, tipping machines, weighing belts, vibrating conveyors, vibrating sieves, pneumatically operated pad looseners, sand reels, blending silos and ordering cylinders along with test shakers, stem testers, laboratory mills and laboratory cutters.

    For many years now, it has been a goal of most leaf processors to implement changes aimed at increasing packed-tobacco quality, costs and yields, and, to this end, Godioli & Bellanti offers custom-designed threshing lines and plants, including, among a host of other equipment, high-efficiency threshers operating over a wide range of speeds and compact classifiers with low energy requirements. It provides, also, compact, high-efficiency re-driers with steam recycling systems that reduce steam consumption. Being custom designed, the re-driers provide for a wide range of adjustments in such areas as, but not limited to, drying temperatures, humidifying steam pressures and apron conveyor speeds. Finally, Godioli & Bellanti offers complete, automatic, programmable leaf tobacco packing lines for cartons, wooden boxes, zipper bags and bales.

    Meanwhile, it is probably the case that the company is best known for its primary machinery and plants—particular plants at that. Curina told Tobacco Reporter that companies that contacted Godioli & Bellanti were those who preferred “traditional primary processing—I would say almost artisanal.” Such equipment includes automatic handling systems for cartons and bales, automatic de-cartoners, automatic vertical slicers, pneumatic conveying systems, weighing belts, dosing feeders, tipping feeders, blending and storage silos, toasters, sauce and flavor kitchens, casing and flavoring cylinders, drying cylinders for cut rag, and customized supervision software to render whole lines automatic.

    Finally, Curina further defined his company’s approach to business. “We don’t presume to compete with the big primary machinery manufacturers for the very big projects,” he said, “but we modestly offer quality machines at truly unbeatable prices.”

    This strategy seems to have paid off, not surprisingly, perhaps, given that the recent past has seen an increasing trend—at least outside China—toward shorter cigarette-manufacturing runs, a trend that has been reflected in primaries as a need to produce smaller batches of cut rag. There has been a rise, too, in the number of small, independent primary operators catering to multiple end users that need to run low-cost, highly flexible operations from small footprints. Certainly, Curina, and his brother Cesare, president of the board and technical director, who have steered the company’s direction in recent years, have made much progress—modestly expressed. A note on the company’s website describes how “Godioli & Bellanti works in several areas of the world,” before going on to list almost 60 countries and every continent.