Category: Business

Kaival Expands Distribution
Kaival Brands has three new distribution partners for its Bidi Vapor products: Smoker Friendly International, Avail Vapor and Hilmes Distributing. These three additional distributors push the potential U.S. store count for Bidi Vapor products above 46,000, up from 10,000 in 2020.
According to Bidi Vapor, distributor interest in its products has increased greatly following its receipt of a premarket tobacco product application filing letter from the Food and Drug Administration. As the company’s product moves into the substantive review phase, Bidi Vapor anticipates it will continue to update investors on additional new distribution agreements.
“These new partners will become a large new revenue stream for Bidi and Kaival,” said Niraj Patel, CEO of Kaival Brands, in a statement. “It is important to note our 2020 sales of just under $100 million were achieved with a distribution network of 10,000 stores and in less than 10 months of operation.
“Today’s new distribution partner announcements bring our network to over 46,000 store locations. The strength and breadth of these partnerships fuels our confidence in our ability to meet or exceed our 2021 projection of $400 [million] to 450 million in sales.”
March 1, 2021
Jack Bowles: 2021 pivotal year for BAT

Jack Bowles (Photo: BAT)
Speaking at the Feb. 18 Consumer Analyst Group of New York (CAGNY) conference, British American Tobacco (BAT) CEO Jack Bowles shared his growth plans and ambitions for the next phase in the company’s transformation.
With strong new category momentum and a clear pathway to 2025 profitability, Bowles called 2021 a “pivotal year” for BAT, announcing an ambitious program called QUEST to accelerate the company’s transformation to create the “enterprise of the future.”
QUEST stands for “Quantum,” Unleashing innovation, Empowering the organization, Shaping sustainability and Technology and digital. The program aims to propel the continued evolution of BAT’s portfolio, structure, culture and ways of working.
According to Bowles, BAT’s goal is to build “A Better Tomorrow” by reducing the health impact of its business. Central to its strategy are the company’s reduced-risk products. These include vapor, tobacco-heating products and modern oral products. Following the January launch of its new CBD vaping line in a test market in Manchester, BAT now also offers products that go beyond nicotine.
In December 2020, BAT announced it had progressed its Covid-19 vaccine candidate into human trials—a significant milestone that further demonstrates the company’s commitment to innovation and science.
BAT has 13.5 million consumers of its noncombustible products, a growth of 3 million in 2020. As BAT works toward its aim of achieving 50 million consumers of noncombustible products by 2030, the company will continue to target its offering in high-growth future areas, including the beyond nicotine on-the-go well-being and stimulation space.
“We are at a key moment in our transformation,” said Bowles in a statement. “We are accelerating our transformation toward ‘A Better Tomorrow’ and committed to building ‘The Enterprise of the Future.’”
“We have made great progress. We have invested in strong foundations for the future. We are building and driving new capabilities, with a clear focus on digital and the sharpening of our science and innovation pipeline. And we have done this while consistently delivering financial returns.
“Our strategy, growth and investment priorities are building BAT into a sustainable, leading consumer-centric, multi-category consumer products company of the future. Our transformation is moving us from a company that is known for tobacco to one that is focused on technology and innovation.
“Our clear roadmap for the future is leveraging our strengths, new capabilities, innovation portfolio and brands with purpose to build ‘A Better Tomorrow.’”
February 19, 2021
Taat Launching Online

Photo: Taat Lifestyle and Wellness
Taat will be available for purchase online by most smokers aged 21-plus in the United States through the company’s e-commerce portal, which is scheduled to launch at 9 a.m. Eastern Standard Time on Feb. 17, 2021, the company announced in a press release.
Through the company’s online shop, cartons of Taat Original, Smooth and Menthol can be purchased by smokers aged 21-plus and shipped to addresses in eligible jurisdictions. As of December 2020, Taat is available in chain and independent tobacco retailers across Ohio. By accelerating the availability of Taat in new U.S. markets, the company anticipates it could seed interest among smokers aged 21-plus as a method of prioritizing new regions in which to distribute Taat at retail. Online sales of Taat are intended to complement retail placements made and managed through Crossmark as part of the company’s scope of initiatives to gain market penetration in the United States.
The company has undertaken extensive development work on the Taat online store, which began in the fourth quarter of 2020. Key considerations in planning the online store included layout optimization for desktop, tablet and mobile web browsers as well as the implementation of mechanisms to confirm that visitors are at least 21 years of age.
Marissa Dean profiled Taat in the January edition of Tobacco Reporter.
February 16, 2021
Japan Tobacco to Close Two Domestic Factories

Photo: Taco Tuinstra
Japan Tobacco (JT) will close two factories in Japan and shed 3,000 jobs as the company restructures its domestic tobacco operations to meet falling demand, reports The Japan Times, citing JT President and CEO Masamichi Terabatake.
The facilities slated for closure are a tobacco plant and a filter-making facility in Fukuoka Prefecture. Both will cease operations at the end of March 2022.
The company will shed about 20 percent of its 13,500 workers. It will offer buyout packages to 1,000 full-time and 150 postretirement workers while asking about 1,600 part-timers to quit. All of them are expected to leave the company at the end of March 2022.
The measures are part of a comprehensive restructuring plan announced on Feb. 9.
The company will consolidate its domestic and overseas tobacco businesses while unifying its headquarters functions into Geneva in January 2022. The Japanese headquarters will be left with domestic marketing and product development functions.
Japan Tobacco’s new domestic headquarters
In Japan, JT will reorganize its operations into 47 branch offices from the current combination of 15 branch offices and 145 outposts covering smaller areas.
JT said its sales fell 3.8 percent to ¥2.09 trillion ($19.95 billion) in 2020 from the previous year. The coronavirus pandemic dragged down tobacco sales at airport duty-free shops while restaurant demand for processed food products sagged, the company said in its 2020 financial report.
Net profit dropped 10.9 percent to ¥310.2 billion, although the company booked ¥41.3 billion in proceeds from the sale of its old headquarters building.
In October, JT relocated its Japanese headquarters to a new location in Tokyo.
February 11, 2021
Taat Scales up Production

Photo: Taat Lifestyle & Wellness
Taat is now being manufactured at a rate of more than 57,000 ten-pack cartons per month, which reflects a 233 percent increase from a production rate of 12 pallets per month to 40 pallets per month as of this week. This increase was prompted by sustained demand for Taat in Ohio as well as anticipated demand from smokers aged 21-plus in other U.S. states who will be able to purchase Taat online directly from the company when its e-commerce portal launches this quarter.
Recent improvements to the company’s processing facility in Las Vegas have enabled Taat to produce a greater volume of Beyond Tobacco, the product’s base material, which is refined in-house using a 14-step process including a patent-pending refinement technique. Additionally, the company has coordinated with its contract manufacturer, who also produces cigarettes for regional and global tobacco brands, to allocate additional production bandwidth to making Taat.
Setti Coscarella
“Now that we are in the ‘execution’ phase on our roadmap to gaining penetration in the $814 billion global tobacco industry, manufacturing our product has become even more crucial to our success so that we can satisfy our proven demand with a consistent supply,” said Setti Coscarella, CEO of Taat Lifestyle & Wellness, in a statement.
“As we continue to place Taat with tobacco retailers in Ohio, and as we prepare to launch the TAAT e-commerce portal this quarter, we have taken proactive steps to ensure a strong supply of TAAT is always on hand to fill orders, with more in the pipeline. More importantly, this has provided us the opportunity to begin forming standard operating procedures for scaling our manufacturing resources even further, which I believe could prove valuable in the near future.”
Marissa Dean profiled Taat Lifestyle & Wellness in Tobacco Reporter‘s January issue.
February 11, 2021
JT to Consolidates Operations

International and Japanese operations will be run from the JT Group’s existing headquarters of the international business in Geneva (Photo: JT Group)
The Japan Tobacco Group has announced a new operating model to further strengthen the competitiveness and profitability of its tobacco business. The changes include the consolidation of the company’s current international and Japanese-domestic tobacco businesses into one tobacco business, as well as the optimization of its operations in the Japanese market.
The headquarters of the tobacco business, including the Japan market, which is currently managed from Tokyo, will be consolidated into the existing headquarters of the international business in Geneva.
“Over the years, the JT Group has consistently anticipated new challenges and managed to successfully transform itself during rapidly changing business environments,” said JT Group President and CEO, Masamichi Terabatake in a statement. “We achieved this through large-scale transformative acquisitions, such as RJRI and Gallaher, and geographical expansions into emerging markets. In parallel, we continuously enhanced our portfolio’s brand equity with a focus on global flagship brands and invested in reduced-risk products [RRP] to expand sales.
“Since I assumed office as the CEO of the group, we have made progress in several areas to strengthen our global competitiveness and business foundation, including the formation of global teams for our R&D and RRP functions as well as transforming the operating and organizational structures in the international tobacco business.
“Today’s announcement is an acceleration of our transformation and will elevate the JT Group to the next level. We are consolidating the organizations of the international and Japanese-domestic tobacco businesses to enable us to fully leverage our company-wide resources and clearly prioritize business investments globally. I am confident that this organizational structure will efficiently and effectively deliver products and services, exceeding consumer expectations. We believe this new model is essential to strengthen our worldwide competitiveness, especially in the RRP category, enabling us to deliver sustainable profit growth in the mid- to long-term.
“The RRP category in Japan is the most mature and competitive in the world, so maximizing the value offered to our consumers by strengthening our competitiveness is a clear priority. In reflection to this and the decline of the sales volume in recent years as well as a highly uncertain operating environment, we had to take some difficult yet necessary decisions,” said Terabatake.

Masamichi Terabatake,
According to the JT Group, rapid changes in the tobacco industry include perception of smoking and health, heightened tobacco regulations and tax reforms in various countries, increasingly diverse consumer preferences and expansion as well as intense competition in product development in the RRP category.
Having closely reviewed the business environment from a long-term perspective, the JT Group concluded that a revision of its strategic focus in its tobacco business is necessary. The group’s objective going forward is to operate with a stronger consumer-centric mindset and prioritize investments in heated tobacco sticks in the RRP category while maintaining necessary investments towards combustible products. The combination of the two tobacco businesses will enable efficient and effective deployment of resources within the group.
More details of the group’s planned restructuring are available here.
The JT Group reported an operating profit of ¥469.1 billion ($4.48 billion) on revenue of ¥2.09 trillion in fiscal year 2020, down 6.6. percent and 3.8 percent, respectively, from 2019. Adjusted operating profit declined 5.6 percent to ¥487 billion. At constant currency exchange rates, adjusted operating profit was up 5.5 percent to ¥544.5 billion.
The company’s international tobacco business sold 435.7 billion units in 2020, 2.3 percent less than in 2019. Volume sales in Japan declined 8.2 percent to 114.9 billion units. The company reduced-risk product sales volume increased by 0.7 billion units year on year to 3.9 billion. Its market share in the RRP category is estimated at approximately 10 percent on an offtake basis.
“Despite the challenges impacting our operations, including Covid-19, the JT Group delivered a solid business performance in 2020, driven by the relentless efforts and passion of our employees worldwide,” said Terabatake. “During this period, we grew share in most of our key markets and captured pricing opportunities. I am also pleased to report that the JT Group continued its investments to strengthen our RRP business with the introduction of Ploom S internationally and Ploom S 2.0 in Japan.
“We will further build on our solid momentum, by adopting a more focused prioritization of our investments towards heated tobacco sticks and combustibles. While we expect the operating environment in 2021 to remain highly uncertain, we expect to continue gaining market share globally both in combustibles and in RRP. Notably, our next generation device for heated tobacco sticks will be launched in Japan early in the second half of this year, followed by launches in Russia and other international markets.”
February 9, 2021
PMFTC Streamlines Philippine Operations

Photo: PMFTC
Philip Morris Fortune Tobacco Corp. (PMFTC) will eliminate about 300 jobs at a factory in the Philippines as part of a streamlining initiative, reports The Inquirer.
“In light of a steep decline in production volumes resulting in significant idle capacity at the Marikina plant, PMFTC Inc. confirms making the difficult decision to streamline its manufacturing operations that has been impacted by the market conditions over the past years,” PMFTC said in an official statement.
According to a September 2020 statement from the Department of Labor and Employment, the Marikina plant has about 1,200 workers.
While refraining to comment on the number of workers impacted, a PMFTC representative said those laid off would be getting a generous separation package.
Last January, the major shareholders of the company announced a merger. Lucio Tan’s LT Group, which indirectly owns PMFTC through Fortune Tobacco Corp., will merge with Philip Morris Manufacturing Philippines. PMFTC would be the surviving corporation effective in June.

February 5, 2021
Eternis Buys Tennants Fine Chemicals

Photo: Eternis Fine Chemicals
Eternis Fine Chemicals, a leading Indian producer of aroma chemicals, has acquired Tennants Fine Chemicals in the United Kingdom and its wholly owned subsidiaries in Singapore and China from Tennants Consolidated.
Tennants Fine Chemicals is one of the world’s leading producers of triacetin, is a plasticizer used in the manufacture of cigarette filters.
As a result of this transaction, Eternis and Tennants Fine Chemicals will expand and complement the range of aroma chemicals offered to customers, while leveraging the multi-location manufacturing and distribution platforms to better service their customers regionally and de-risk their supply chain.
“As we step into 2021, I speak on behalf of the team at Eternis in expressing my excitement with this significant step of successfully completing our first overseas acquisition in our growth journey,” said Rajen Mariwala, managing director of Eternis, in a statement.
“The addition of this large independent, high-end manufacturer enhances our business and brings with it many strategic advantages. We will now have established operations in Europe and Asia, with the ability to service our customers from stock hubs and partners. The combined product offer will position us well for further growth.”
“I see positive outcomes as we enter into this new partnership,” said Billy Gittins, managing director of Tennants Fine Chemicals. “Our combined manufacturing footprint across two key regions will offer better security of supply. Our regional service strategy in China and SE Asia has proved beneficial and will be further strengthened with the addition of Eternis’ products. I am excited about our future together.”
February 3, 2021
KT&G Recognized for Auditing Practices

Hyung-cheol Cha, head of the KT&G audit planning office (right), and Tae-ryong Moon, president of the Korea Audit Association, at the awards ceremony. (Photo: KT&G)
KT&G was awarded the Best Organization Award in the Private Enterprise Sector for Internal Audit at the 2020 Audit Awards hosted by the Institute of Internal Auditors Korea.

The awards ceremony was held to encourage organizations that have contributed to social development through excellent internal audit and compliance monitoring during 2020. KT&G was highly evaluated for its reinforcement of transparency in management through internal audit consistent with global standards.

“KT&G proactively prevents corporate risks through an independent internal audit organization directly under the audit committee, and in the future, we will increase corporate value by operating a leading audit system in line with global standards,” said Hagyeong Do, director of the KT&G audit group, in a statement.
February 3, 2021
22nd Century Moves Headquarters

Photo: Vincent Groeneveld from Pixabay
22nd Century Group is moving its corporate headquarters to the Larkinville District in Buffalo, New York, USA.
“We have experienced tremendous positive change in our organization over the past year and this relocation will help us improve on efficiency, collaboration, and our ability to attract and retain top talent,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement. “We have deep roots in Buffalo, and we are very excited to be moving to the up-and-coming Larkinville District, Buffalo’s oldest manufacturing district, to join other organizations that are revitalizing the city’s tech and business community.”
22nd Century Group’s new Buffalo office space is in a state-of-the-art, restored manufacturing facility located at 500 Seneca Street, joining other multinational technology and professional services companies. The new headquarters will accommodate all the company’s staff from its current office location in nearby Williamsville and has significant room for expansion.
The company believes that authorization of its MRTP application by the U.S. Food and Drug Administration, along with its expected growth in the hemp/cannabis space and a soon-to-be-announced third franchise, will require an expansion of resources and space. 22nd Century Group will move to its new headquarters in March 2021.
January 28, 2021