Category: Print Edition

  • Serving the Spice Islands

    Serving the Spice Islands

    Photos: Hertz Flavors

    Hertz Flavors celebrates its first year of operating in Indonesia.

    By Taco Tuinstra

    Visiting Indonesia is a multisensory experience. Breathtaking landscapes, bustling traffic and a spicy cuisine will keep the traveler’s eyes, ears and taste buds working overtime. And for the nose, there is the sweet scent of clove tobacco. Kretek cigarettes are almost as synonymous with Indonesia as the country’s ancient temples and majestic volcanoes.

    Contrary to the situation in many other countries, tobacco remains unabatedly popular throughout the archipelago, with a substantial share of the adult population lighting up frequently. Indonesia is also a leading producer of leaf tobacco and cigarettes. In 2022, the country’s tobacco growers harvested 225.58 million kg of leaf, and its cigarette companies purchased excise stamps for more than 330 billion sticks, according to the Ministry of Agriculture and the association of white cigarette producers in Indonesia, Gaprindo, respectively (the country also struggles with a sizable illicit market). Vapor and tobacco-heating products have been making steady inroads too lately, especially in urban areas.

    Against such a backdrop, it is hardly surprising that industry suppliers have been lining up to set up shop in the country, either to be in closer proximity to domestic manufacturers or to supply international customers—or both. The leading tobacco equipment manufacturers and leaf merchants have been present for some time, and others continue joining their ranks. In June 2022, for example, Smoore Technology, a prominent atomization company serving the global vape market, inaugurated a factory in Malang to supplement its manufacturing base in China (see “Peace of Mind,” Tobacco Reporter, June 2022).

    The prevalence of kretek cigarettes, with their complex blends, makes Indonesia an attractive destination, especially for flavor houses. Kretek cigarettes typically contain casings and top flavors with elements such as fruitiness, sweetness, sourness and spiciness. The products on the market are characterized by highly characterizing flavors and strong pack and stick smells along with sophisticated smoke streams. The virtually unlimited combinations of flavors on the market, in combination with Indonesian smokers’ receptiveness to new experiences, makes Indonesia a flavorist’s paradise.

    Alert to opportunity, Hertz Flavors of Germany last year inaugurated a $5 million state-of-the-art factory in Mojokerto, East Java, located at only 40 km, or one hour’s drive, from the port of Surabaya and in close proximity to the majority of cigarette manufacturers in Indonesia.

    According to Ferdinand Baturusa, president director of Hertz Flavors Makmur Indonesia, the decision to build a local facility was a no-brainer. “The popularity of kretek, both domestically and internationally, has made Indonesia the second biggest market for tobacco flavors in the world—clearly a location we want to be present in,” he says.

    With an annual production capacity of 1 million kg, depending on product mix and complexity, the Indonesian plant has significantly boosted Hertz Flavors’ global footprint. The company also manufactures flavors in Hamburg and operates a sales and innovation center in Dubai under the name Flavoriq, which focuses on the vaping market. In addition, it maintains a significant international presence through agents and partnerships.

    Hertz Flavors is catering to Indonesian smokers’ discerning palettes. Locally popular flavors include apple, grapes and mango, along with cigarettes that taste like traditional Indonesian sweets, such as ludou and taro.

    Baturusa says the Surabaya plant underscores Hertz Flavors’ dedication to upholding top-notch standards in its operations. The facility has been certified ISO 9001 and HACCP in recognition of its systematic approach to quality management and the safety of its products, respectively. ”This accomplishment sets us up to enter the marketplace and provide the best products and services to our Indonesian customers,” says Baturusa.

    Aside from following best industry practices, Hertz Flavors adheres to strict internal quality and compliance standards. “We use our knowledge from almost 70 years of our experience to develop products according to international regulations and with a focus on performance and risk reduction,” says Baturusa, adding that Hertz Flavors will also accommodate individual customers’ preferences.

    Constructing a factory in a new country 11,000 km away from its home base naturally presented a considerable challenge for a medium-sized firm like Hertz Flavors, but with the help of its skilled and knowledgeable local team, the company successfully navigated the obstacles. Local authorities, too, accommodated the project. Baturusa says he is encouraged by Indonesia’s commitment to reforming the investment climate to make it a safe and attractive destination for businesses looking to set up shop in the country.

    In addition to strengthening Hertz Flavors’ global capacity, the investment has boosted the local economy. The Indonesian plant currently has a workforce of more than 30 people with a variety of geographic and educational backgrounds. According to Baturusa, Indonesia’s young and capable workforce, combined with the country’s improving global profile, represents considerable competitive strengths internationally. “As [a] German-speaking Indonesian with a university degree from Berlin, I personally think that this German-Indonesian culture fusion is a great mix,” he says.

    The skills and diversity of its Indonesian team will serve Hertz Flavors well as it caters to Indonesian smokers’ discerning palettes. According to Baturusa, current local tobacco trends include fruity and minty flavors (delivered with or without capsules) along with apple, grapes and mango. Tea-flavored products, too, have a wide following in Indonesia as do cigarettes that taste like traditional local sweets, such as ludou and taro (sweet potato).

    In cooperation with its vape specialists at Flavoriq, Hertz Flavors is also developing innovative flavors for Indonesia’s vape segment, which has grown considerably in recent years. “Together, we also create customized flavors for this unique market and exclusive solutions for our local customers,” says Baturusa. “Depending on demand, our Indonesian factory manufactures these products also locally.”

    Buoyed by the success of its first year in Indonesia, Hertz Flavors is keen to keep growing. For the time being, it intends to focus on domestic sales. “Our main priority is currently the Indonesian market,” says Baturusa. “Indonesia is one of the largest and most vital and innovative tobacco markets worldwide, and we strive to fulfill the necessities and desires of Indonesian customers and cigarette producers. Our commitment is to produce excellent flavors for tobacco and adjacent products and items that comply with the Indonesian market’s exceptional tastes and requirements, resulting in our expanding achievements in this important market.”

    The greatest challenge, according to Baturusa, will be to maintain and improve product quality while ensuring a supply of high-quality raw materials. “Maintaining consumer trust and meeting industry standards depends heavily on product quality,” he says. “In addition, managing raw material resources for tobacco and flavoring ingredients is a significant challenge. In particular, raw material availability and pricing are critical. Manufacturers must uphold stringent quality controls throughout their supply chains while devising innovative solutions to overcome these hurdles.”

    Dedication will be the key. Continued success, says Baturusa, will require leading innovation, staying ahead of trends and attracting the best people. It also involves looking beyond immediate corporate considerations, as Hertz is adamant that its growth will not come at the expense of the environment. “We feel responsible for the sparing use of resources on our planet and for preserving an intact environment—for present and future generations,” says Baturusa. “Our company takes a long-term view in all its activities to ensure the sustainability of our business. We believe in long-lasting partnerships, superior quality and first-class customer service.”

    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.
  • Bubbles of Bliss

    Bubbles of Bliss

    Splash’s objective was to develop a smoke-free and vape-free product that would integrate enjoyment and ritual.

    A German startup deploys foam to deliver nicotine.

    By Stefanie Rossel

    Klaus Hagen

    Until recently, users of noncombusted products had two ways of consuming nicotine: through an aerosol generated by e-cigarettes or heated-tobacco products (HTPs) or through direct absorption by the mucous membrane of the mouth, as is the case when using modern oral nicotine products. The Splash platform works with an entirely different medium: foam. According to its eponymous manufacturer, a startup company based in northern Germany, Splash is the fastest delivery system on the market, delivering the desired nicotine “hit” within seconds.

    The stimulants carrier is not an aerosol but a glycerin-free fine foam, similar to the froth on a cappuccino, which is consumed through a mouthpiece. The Splash device comprises a bottle filled with nicotine-containing liquid. A separate department at the top of the unit holds a mix of natural ingredients, including phospholipids and a vegetable emulsifier, that turn the liquid into a stable foam when released.

    “We wanted the particles to stay in the mouth longer than aerosols and be absorbed sublingually,” explains Klaus Hagen, chairman of Splash. “Foam moves slowly and remains in the mouth long enough for ingredients to be absorbed quickly. This way, it takes only a few seconds until the active ingredient arrives in the brain. In addition, the foam allows the aromas to spread in the mouth and create an intense taste experience.”

    To manage the air pressure within the bottle, the device is equipped with coated pills and a filter. “With Splash, we have found a way to substantially shortcut the road that stimulants usually have to take through the body via the stomach and the bloodstream,” says Hagen.

    Smoke-Free and Vape-Free

    Splash is a hybrid: a modern oral nicotine product in the form of a handheld device that mimics the hand-to-mouth motion associated with smoking or vaping.

    Hagen, who boasts a long career in the tobacco industry, most recently as head of next-generation products at a leading multinational, founded Splash in 2021. Development of the Splash platform, however, started as early as 2019. Hagen had just successfully exited his first startup, which had developed a battery-powered shisha.

    “A few weeks after the sale of our company, my team and I were contemplating what to do next,” says Hagen. “We knew that whatever we would develop now would only become relevant to consumers, the industry and regulators in three [years] to four years. When we started with Splash, vaping was already very popular, and it was all about generating big clouds of steam. Oral nicotine products at that time were either tiny niche or locally limited, such as snus in Sweden. The same was true for batteries and their potential hazard for the environment. Nevertheless—or because of that—we decided to create a natural alternative to aerosols and batteries.”

    The objective was to develop a smoke-free and vape-free product that would integrate enjoyment and ritual. “We aimed to be way ahead of a consumer trend we were anticipating,” says Hagen. “At that time, it was a mere gut decision, but it has turned out to be the right one.”

    The idea of using foam was inspired by the detergent capsules used in dishwashers. “We were immediately aware of the enormous potential ‘effervescent tablets’ would have as an energy source for use in inhalers,” says Hagen. “So we decided to develop a method to turn a liquid into a solid foam.”

    Facilitating Switching

    The result is a hybrid—a modern oral nicotine product in the form of a handheld device that mimics the hand-to-mouth motion associated with cigarettes, HTPs or vapes. Hagen calls it a vape 2.0 or “no heat, no burn.” The product can be offered with various nicotine strengths. Once activated, the device generates 25 puffs to 30 puffs.

    The company tested user acceptance at different points in the development process. “In the U.K., we had the product tested by many consumers in London, Birmingham and Manchester this May,” says Hagen. “They all immediately understood what Splash was about, which is on the one hand to maintain an essential ritual known from smoking or vaping and on the other hand to be discreet—i.e., not to emit smoke or vapor. We live in a fast-paced time where social acceptance of smoke[-generating] and vapor-generating products is getting ever more limited. Besides, for smokers or users of HTPs or vape products, the switch to a nicotine pouch is too big a step—they need certain key elements, including habits and satisfaction.”

    In researching the market, the company paid particular attention to two aspects: How do consumers experience the absorption of active ingredients, and how do they like foam as an administration tool? “We were surprised how well both were received,” says Hagen. “Consumers described the uptake of active ingredients as ‘very fast and effective.’ The foam, albeit a novelty, was experienced as extremely pleasant. We had numerous conversations with smokers who confirmed that nicotine absorption through Splash is not only exceptionally fast but also lasts for a long time so that the total consumption of nicotine—spread across a day—is lower than with the usual nicotine-containing products.”

    Splash is not only fast, but it also lasts a long time so that the total consumption of nicotine is lower.

    Klaus Hagen, chairman, Splash

    Low Risk Profile

    Splash’s comparatively low risk profile should help the product gain acceptance in a heavily regulated industry. The foaming agents contain emulsifiers that have been approved for use in the food industry. As a modern oral product, the device is not subject to the EU Tobacco Products Directive (TPD) yet; for the time being, member states can decide for themselves whether to permit the product category. Hagen is confident that the TPD will embrace new products such as Splash in the future.

    Being made of nicotine, the liquid in Splash does not contain harmful substances common in tobacco, such as nitrosamines. The product is also free from heavy metals. Since Splash works without heating or pyrolysis, it doesn’t create any byproducts, such as formaldehydes. What’s more, the absence of a battery means there is no risk of fire or malfunction. Other risks, such as leakage or accidental swallowing of the whole product, are ruled out as well, according to Hagen.

    In addition to equipping its device with a child-safety lock, Splash adheres to strict voluntary standards to prevent youth appeal. “Of course we stick to the legal caps for nicotine, but we also refrain from using sugar-loade[d] flavors or giving our flavors fancy names that are targeting children or youths,” says Hagen. “We don’t do lifestyle marketing, and we focus on age verification for online trade and retail.”

    Splash is a disposable product, planned to retail at $2 per unit and appealing to a mass market with its simplicity of use. However, sustainability has played an important part in its development. “We were motivated to make things better than existing products,” says Hagen. “In contrast to vape products, Splash contains no electronic components. Almost all its parts are made of recyclable plastic, hence the product can be returned into the recycling loop. With this, we are anticipating what is already imminent in some regions: the legally enacted ban of batteries in disposable products.”

    Platform with Potential

    The company believes its platform has potential beyond nicotine delivery. “Splash could be used for the administration of substances that provide users with new energy or a feeling of well-being and deceleration,” Hagen says. “It is also apt for administration of medicines. Our technology has a big advantage for beverage and pharma: the speed of absorption. While it takes about 10 [minutes] to 20 minutes for an energy drink or a painkiller to release its effect, Splash will take only a few seconds. We have already carried out respective tests in our labs, and there’s interest from the industries. Here, our technology could be licensed.”

    The company, which comprises a network of 14 people spread across several cities and continents, aims to become an expert in the administration of substances rather than an expert in the distribution of nicotine products, according to Hagen. For the time being, though, Splash is focusing on nicotine, which currently engages the majority of its staff. A second division, however, is working on other mood enhancers.

    The Splash device is developed in Germany and manufactured in China. For regulatory reasons and to distinguish it from use in other industries, the company in November rebranded the nicotine part of its platform under the name Voam.

    The company started to commercialize its patented technology as a nicotine product in the late summer of 2023, testing the product in several stores in close contact with consumers to be able to potentially make last adjustments. “We intend to keep this panel that exceeds traditional market research to test innovations, such as new flavors, in the future,” says Hagen.

    According to him, the industry has already shown significant interest in the product. The company has been in talks with representatives of the traditional tobacco business as well as the nicotine industries and leading distributors in several countries. “We are already negotiating the first larger volumes,” says Hagen. “In the selection of potential partners, it is especially important to us that the player shares our mission: to enable a smoke[-free] and vapor-free world with our product without forgoing enjoyment and rituals.”

    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 Taste of ‘Terroir’

    A Taste of ‘Terroir’

    Photos: CTS
    Photos: CTS

    With its origin-focused approach, CTS has become a successful niche player in the French RYO category.

    By Stefanie Rossel

    “Shrinking” is the first word that comes to mind when thinking about the French tobacco sector. According to Statista, French tobacco sales are expected to decline by almost 1 percent annually between 2023 and 2028. In 2022, the tobacco market in France experienced its strongest value decline in a decade.

    With the country’s last cigarette factory in Corsica closing this December, cigarette manufacture in France will come to an end. Due to the phaseout of EU tobacco subsidies in 2006, the area dedicated to tobacco cultivation in France has decreased as well—from 3,149 ha in 2016 to 1,205 ha in 2021.

    Sadly, the only part of the tobacco landscape that continues to flourish is the illicit cigarette trade. According to a KPMG study commissioned by Philip Morris International, illegal smokes represented 32 percent of the French tobacco market in 2022.

    However, this dark environment conceals some remarkable success stories.

    One of them has been written by Collaboration Traditab Santele (CTS), an alliance of Traditab, a company run by small tobacco producers in southwestern France, and Santele, a Flemish family-owned manufacturer of traditional Belgian rolling tobacco.

    Considering the pressures from increasing regulation, the two companies felt it made sense to join forces. Traditab provided the raw materials and tobacco cultivation knowledge; Santele contributed roll-your-own expertise and manufacturing facilities.

    Established in 2016, CTS today is a medium-sized enterprise headquartered in Belgium with offices in France and Spain that currently manufactures and markets four brands of RYO tobaccos, focusing on the concept of “terroir.” The French term is used to describe the environmental factors that affect a crop’s phenotype, including unique environmental contexts, farming practices and growth habitat.

    CTS’ Vasconha RYO brand, an American-blend type, is made of 100 percent tobacco cultivated by farmers in Gascony, the Basque Country and Aragon, traditional tobacco cultivating regions on both sides of the Pyrenees. Wervikse Tabak b34, a fine-cut dark blend, comes from Wervik, a historical tobacco-growing region in Flanders. The tobacco for Veramia, a Virginia blend, is cultivated exclusively in the western Spanish region of Extremadura, where tobacco has been grown since the 16th century.

    Focus on Origin

    The company’s bestseller is 1637. In October 2023, the product was the third-bestselling RYO brand in France. Made of French tobaccos grown in the southwest, its name alludes to the year when tobacco was first planted in the region. The brand was created in 2008 by Traditab at the initiative of a cooperative of small tobacco growers, Tabac Garonne Adour (TGA), that sought to improve the price paid for local tobacco growers.

    Anne-Marie Bracq

    Marketing began regionally, with an emphasis on tobacconists. “At that time, there weren’t many such products on offer, as organic tobacco products were popular,” says Anne-Marie Bracq, director of CTS France. “We started out with 20 tons of tobacco and grew step by step, explaining to tobacconists that if they choose to sell our products, they support their country’s growers.”

    It’s a concept that works well in France, which takes pride in domestically produced cheese and wine varieties that derive their identities from clearly demarcated origins. The company has applied the same philosophy to the other two markets. In Spain, for example, it has a sales force of 17 people.

    CTS works with 120 tobacco farmers in France, who are organized in the TGA cooperative and cultivate almost 300 ha in the region between Bordeaux and Lot-et-Garonne. The farms are small, with tobacco representing only one of a variety of crops, typically planted on 2 ha to 4 ha.

    While in Belgium, CTS works with only one or two growers, it cooperates with 150 growers of a cooperative in Spain, which cultivates tobacco for CTS’ RYO brands on 550 ha.

    Jerome Duffieux

    “In France, tobacco growing is not as much a tradition as in Spain, and Burley is the main variety, with flue-cured Virginia [FCV] being more of a filler type,” explains Jerome Duffieux, director of Traditab. “Burley production is more mechanized whereas FCV production is more of a manual process in France. In Spain, where farms are bigger and more specialized in tobacco, it’s the other way around; Spanish FCV is more aromatic.”

    Like Traditab, CTS aims to preserve a centuries-old regional tradition. “Our objective is to promote tobacco culture, which involves paying farmers an adequate price,” says Bracq. “This is also important in Spain. Extremadura produces 95 percent of Spain’s tobacco, accounting for 1,900 jobs, and provides €91 million ($95.83 million) to the region’s gross domestic product.”

    CTS’s bestselling 1637 brand was named after the year that tobaccos were first grown in the southwest of France.

    Expansion Planned

    The tobacco growers cooperating with CTS face a challenge shared by farmers in other fields of agriculture: finding successors when they retire. “Maybe it’s more difficult for tobacco because it’s difficult to promote from a health perspective,” says Bracq. “But we still have the problem of economic viability. At CTS, we are looking at ways to maintain tobacco cultivation, trying to develop a future for growers and [figuring out] how to support them economically. We are also running a program to find new farmers.”

    CTS plans to expand its current portfolio by developing a new RYO brand, but it’s not easy, according to Bracq. Almost three years ago, France raised tobacco excise taxes to €6.61—substantially above the EU average of €3.34.

    The government has continued raising RYO taxes since, thus eliminating the buffer function RYO usually plays between factory-made cigarettes and cheap illegal smokes. “A pack of 20 cigarettes now costs €11 and a 30-gram pouch of rolling tobacco €15 to 20,” explains Bracq. “The RYO segment is now declining more heavily than the cigarette market.”

    CTS is presently also involved in a cigar project. “We are developing cigars that are made of tobacco from southern France and plan to launch them in the next three years,” says Bracq.

    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.
  • Peace of Mind

    Peace of Mind

    Photos: Smoore Technology Indonesia

    With its first overseas production facility, Smoore has boosted the resilience of its operations.

    By Taco Tuinstra

    The site that houses Smoore Technology Indonesia in Malang used to be a tobacco factory, but there is little to remind the visitor of its illustrious past. The rattling conveyors have fallen silent, the leaf scraps have been swept away and the sweet scent of clove tobacco has long dissipated, giving way to a serene, almost sterile environment.

    Instead of the rumbling of cigarette-making machines, there is the hum of high-tech equipment. Sixteen automated production lines assemble, fill and pack e-liquid pods for the U.S. market, requiring only a minimum of human intervention. According to Smoore, the Indonesian facility is one of the most sophisticated and highly automated in the world.

    Though Indonesian plant manufactures nicotine products like its predecessor, the new establishment looks more like a pharmaceutical lab than a factory, with medical-grade standards of hygiene. Entering the production floor requires hairnets and shoe coverings along with a mechanical “wind shower” to remove any contaminants from visitors’ clothing. In addition to a wastewater treatment facility, the compound has its own power generator; in case of a network failure, production can continue for at least 24 hours.

    Considerate of the local culture—Indonesia is the world’s most populous Muslim-majority country—the Chinese firm has built multiple prayer rooms throughout the facility as well as a covered parking deck that can accommodate hundreds of motorcycles. Despite its high level of automation, the Indonesian affiliate employs thousands of local people, and two-wheelers remain by a large margin the most affordable and efficient vehicles for commuters to navigate the country’s bustling roads.

    Ensuring Business Continuity

    Clayton Shen

    Touring the 60,000-square-meter facility (30,000 of which are covered), as Tobacco Reporter did in early October, it is hard to believe that a mere eight months passed between the time that Smoore’s head office in Shenzhen authorized the project and when the first product shipment left the factory in May 2022.

    According to Clayton Shen, president director of Smoore Technology Indonesia, the new factory—Smoore’s first outside of its home country—is part of the company’s business continuity strategy, designed to strengthen the resilience of its global operations and guarantee customers uninterrupted supply regardless of geopolitics or other eventualities.

    As the world’s leading atomization company with a global market share of almost 20 percent, according to Frost and Sullivan, Smoore already has a formidable manufacturing footprint in China, featuring multiple highly automated production lines. In light of recent global developments, however, the company considered it prudent to expand globally and supplement its Chinese base with an additional site.

    While Smoore weathered the Covid-19 pandemic remarkably well, the crisis also exposed the risk of supplying customers worldwide from just one country. Travel restrictions disrupted global supply chains, causing shipping rates to skyrocket and containers to pile up in the wrong locations. China also locked down longer and more severely than many other countries, forcing suppliers to temporarily halt operations and leaving customers scrambling for their products.

    Meanwhile, rising political tensions between China—the world’s largest supplier of vaping liquids and hardware—and the United States—the leading destination for such products—resulted in new trade barriers, with Beijing and Washington slapping each other with tit-for-tat tariffs. E-cigarettes and many other Chinese-made imports are now subject to a 25 percent duty in the U.S., saddling buyers with considerable nonvalue-added expenses.

    Then, in April 2022, the State Tobacco Monopoly Administration, which had recently asserted jurisdiction over China’s rapidly growing vapor business, published new rules for e-cigarette manufacturing. While Smoore successfully applied for many of the newly required licenses, this development also gave pause to others planning to enter the industry.

    Selecting a Site

    The facility in Malang is conveniently located to one of Smoore’s key customers; BAT manufactures tobacco products at its Bentoel facility on the other side of the road.

    In July 2020, the company took its business public, raising more than US$1 billion on the Hong Kong Stock Exchange. The cash provided it with the confidence and financial flexibility to explore the possibility of strengthening its Chinese manufacturing base with a facility abroad.

    The immediate question was: where? The United States and Europe are Smoore’s biggest markets, but those places are also far from China, where many of Smoore’s suppliers remain based. And their regulatory environments can be intimidating for players unfamiliar with the local laws.

    Smoore decided to look closer to home, in Southeast Asia, which like China has a long tradition of manufacturing for exports. Industrial prowess was not the only criterion, however; Smoore also needed a location that was friendly to e-cigarettes. Thailand and Malaysia quickly disqualified as candidates because of their restrictions on vaping. Vietnam, by comparison, is a tolerant country for the nicotine business. It has a large domestic tobacco industry and a famously industrious workforce. However, the state requires foreign investors to not only team up with a local company but also give their Vietnamese partner a 51 percent stake in the business—an unappealing condition for Smoore.

    So the choice fell on Indonesia. According to Shen, the country offers multiple advantages. For starters, it is amiable to the nicotine business—a rarity at a time when hostility is the norm in many countries. Indonesia is a major producer and consumer of tobacco products. In 2022, the country’s tobacco growers harvested 225.58 million kg of leaf, and its cigarette companies produced more than 330 billion sticks, according to the Ministry of Agriculture and the association of white cigarette producers in Indonesia, Gaprindo. The tobacco industry and its supporting sectors employ almost 6 million workers and contribute nearly 11 percent of the country’s total tax take. E-cigarettes and tobacco-heating products (THPs) have been making steady inroads in Indonesia, too, lately, especially in urban areas.

    On top of that, Indonesia offers a conducive industrial environment for the e-cigarette business. The country is endowed with abundant natural resources, including nickel and copper, which are key materials in battery production. Keen to move beyond mineral extraction, the government has been pushing domestic production of power cells for electric vehicles and other applications.

    The economic significance of tobacco to Indonesia means not only that the country welcomes new initiatives in the sector but also that it has a workforce accustomed to handling nicotine products. What’s more, Indonesia offers good logistics and a favorable investment climate. According to Shen, the latter factors are important because Smoore is keen to localize its supply chain as much as possible. Encouragingly, Indonesia’s business-friendly environment is expected to endure regardless of who wins next year’s presidential elections, as none of the candidates running for office appear inclined to reverse the policies that have allowed Indonesia to become one of the world’s fastest-growing economies.

    Perhaps the only hesitation was the uncertainty of how Smoore, as a Chinese company, might be received in Indonesia, where throughout history there have been episodes of tensions between the Indonesian people and the country’s ethnic Chinese community. Smoore’s subsequent experience, however, demonstrated that people, regardless of their background, will generally treat you as well as you threat them: The company’s sincere effort to understand the local culture and respect local customs was reciprocated with fierce loyalty from a dedicated workforce. Local authorities, meanwhile, went out of their way to accommodate the investment. When Smoore inaugurated its facility in June 2022, Indonesia’s minister of investment attended as a guest of honor.

    Remarkably, labor cost did not feature prominently in Smoore’s decision to set up shop in Indonesia. While an affordable payroll is a nice side benefit, according to Shen, the company’s focus on automation made the price of labor a less important consideration than it might have been for a less advanced player.

    Smoore continues to enjoy a significant lead in this area, having set up its automation division in 2014, when manual production still prevailed in the sector. According to Shen, two developments accelerated automation—the debut of ceramic heating in 2016 and the U.S. premarket tobacco product application process. The first replaced the easily deformed wick with a more solid structure, which is easier to work with from a design perspective. The second made it cost-prohibitive to keep changing products for the all-important American market, resulting in a more predictable form factor.

    Smoore’s factory in Indonesia is one of the most sophisticated and highly automated in the world.

    The Yunnan of Indonesia

    Having decided on Indonesia, Smoore had to pick a city. Should it be Jakarta, Indonesia’s administrative and financial capital, or perhaps Surabaya, with its large industrial base and busy port? In any event, Smoore chose Malang, the capital of the larger Malang regency in the province of East Java. Though smaller than Jakarta or Surabaya, Malang is strategically located with good connections to the port of Surabaya and other key cities. In addition to reputable universities, the town has a strong tobacco heritage, with leading players such as Sampoerna, Djarum and Bentoel operating in the region. “Malang is the Yunnan of Indonesia,” says Shen, referring to China’s leading tobacco-producing province.

    The other consideration that made Malang an appealing choice was the fact that BAT had a piece of land available along with empty buildings that used to house a tobacco factory. This provided Smoore not only with suitable facilities but also placed it in proximity to a prominent customer. BAT’s Bentoel subsidiary continues to manufacture tobacco products on the other side of the road.

    The first team from China, which included the project leadership, construction specialists and human resource recruiters, arrived in Malang in November 2021, around the time that the Omicron Covid variant started doing the rounds. While Indonesian pandemic restrictions were less severe than those in China, employees among the first group still had to quarantine in Jakarta for up to 10 days. Shen was luckier. By the time he arrived as part of the second group, Indonesia had relaxed its isolation requirements.

    Nurturing Talent

    Initially, recruitment appeared to be a challenge. Although Indonesia has a large, well-educated workforce and plenty of experience with tobacco products, Smoore was the first e-cigarette company in the country, and there was no readily available workforce for that segment.

    “We found that the people here had good experience in other industries but no idea about e-cigarettes,” says Shen. In addition, getting people to relocate for work proved a harder sell in Indonesia than it is in China. “In China, it’s easy to convince people to leave other cities for job opportunities in Shenzhen,” says Shen. “Pursuading candidates to move from Jakarta or Surabaya to Malang turned out to be more challenging.”

    So Smoore decided to set up its own training programs. “We went to the local universities and recruited students who were about to graduate,” says Shen. Then we trained them not just in one department but allowed them to rotate based on their university major and their personal interests and capabilities. After one year of training, we sent them to the appropriate position, whether that be in engineering, quality control or in another department.”

    This approach not only creates well-rounded employees but also nurtures a pool of future leaders—an important benefit for a rapidly growing company like Smoore. “For many of our people, Smoore is their first employer; they will be heavily impacted by our culture, and they will grow up very fast,” says Shen. “We believe that, within three [years] to five years, many of them will move into key positions—an opportunity that is not always available in established companies where all the leadership functions have already been filled.”

    The investments in people appear to be paying off. When a delegation of senior Smoore officials from Shenzhen visited the Indonesia facility, they asked employees from various departments for honest feedback. According to Shen, 95 percent of respondents indicated that they felt proud and comfortable working for Smoore.

    Growing the Pie

    Such levels of employee satisfaction bode well as Smoore expands. While the facility across the road from Bentoel currently supplies BAT, the company is keen to serve other customers from Indonesia as well. For that purpose, it has been building a second factory at a different location, which at the time of writing was nearing completion.

    By spreading its geographical footprint, Smoore has boosted the resilience of it business. With manufacturing capabilities in both China and Indonesia, the company not only offers security of supply but also allows U.S. customers to avoid costly import duties. Other Chinese e-cigarette companies have taken note, and some have also started exploring the option of setting up shop in Indonesia. For the time being, however, most of Smoore’s competitors are limiting their activities to Bantam, a special economic zone just south of Singapore.

    Shen is unconcerned about such actions. “We never worry about competitors because we want to make the industry bigger,” he says. More e-cigarette manufacturing in Indonesia also makes it more interesting for suppliers to establish operations there, which in turn will benefit Smoore. In a testimony to the company’s strategic relationships, three of its Chinese suppliers also came to Indonesia when Smoore set up shop there—but there’s always room for more. “Ultimately, our goal is to grow the pie,” says Shen.

    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.
  • A Pipe Dream?

    A Pipe Dream?

    Photo: Filipa

    Britain’s plan to create a smoke-free generation could be momentous if implemented properly—and herein lies the problem.

    By George Gay

    The Guardian newspaper on Oct. 6 published a trenchant cartoon by Ben Jennings that showed an angry-looking U.K. prime minister driving or stuck in traffic on a road heavily polluted with vehicle fumes. But it is not the vehicle fumes that are making Rishi Sunak angry. He is shouting at a pedestrian student choking on the fumes as he makes his way to school: “Maybe you should stop smoking.”

    For readers not based in the U.K., I should explain that, two days earlier, the prime minister’s office had issued a news bulletin titled, “Prime Minister to create ‘smoke-free generation’ by ending cigarette sales to those born on or after 1 January 2009,” while, previously, we had been told that Sunak was considering taking away the powers of local governments to protect children by preventing cars being driven right up to school gates.

    I hope that the Jennings cartoon was seen by those public health officials who are quoted in the bulletin as not only supporting the policy, which is a reasonable stance for them to take, but as heaping praise on the prime minister for looking after the interests of young people. They might like to ponder the way Sunak, as chancellor under prime minister Boris Johnson, resisted calls for extending the provision of free school meals to needy children; the way he has served in a government that has allowed more than 100 schools to become structurally unsound; the way he remained in government while it rolled out a chaotic pandemic-period education program, possibly ruining the life chances of countless children; the way he has in mind to prevent local governments from introducing lower speed limits and car-free zones, both of which have positive consequences for children; the way he has condoned the placement of lone asylum-seeking children in hotels, despite the high court’s having found the practice unlawful; and, possibly most heinous of all, the way he condoned the painting over of cartoon murals at other centers housing children seeking asylum lest the centers became too welcoming.

    I hope the public health people concerned do think about these matters, which are by no means exhaustive, and each of which will negatively affect the mental and physical well-being of children under the care of Sunak, a committed fossil fuel aficionado. And I hope that, in the future, before being drawn into the political sphere, they bear in mind that politicians regularly use children much as conjurors use their assistants.

    I should let it be known also that Sunak heads a party that has been in government for 13 years, that is deeply divided and unpopular and that faces an election next year. In fact, his situation puts me in mind of Maynard Keynes, who apparently once made the point that when something momentous was at stake, the last things you needed in the mix were politicians trawling for votes.

    The success or otherwise of this policy will hinge on satisfying, clean nicotine products remaining available even to young adults who will not be able legally to buy cigarettes.

    Objections

    Having said all that, I must admit that I think the proposed policy could be important, if not momentous. Nevertheless, I am conflicted because whereas I think the policy could offer huge advantages, it will do so only if it is implemented properly, and herein lies the problem. It is being rolled out in its initial phase by politicians trawling for votes.

    One of the objections put forward by those opposed to such a policy is that it amounts to a creeping prohibition that aims eventually to disallow smokers from obtaining the products they seek. But is this correct? I can sympathize with those who worry about how such a policy might lead to a “creeping” overreach that takes in current smokers, but I wonder whether this could be described as “prohibition.”

    Look at it this way: If there is one message that most tobacco harm reduction advocates have been keen to get across in recent years, it is that smokers smoke for the (benign) nicotine while being laid low by inhaling the tar that is a product of tobacco combustion. So, in fairness, while granting that the government is not proposing that current smokers should not be allowed to obtain cigarettes, it must be conceded also that it is not even proposing that they, or future generations of people, should not have access to nicotine, the substance that smokers want. And even if there is policy creep, the way things currently stand, smokers will not be subjected to a true prohibition because they will have access to nicotine. The proposal seems to my way of thinking to be only about stopping future generations and, given a bit of creep, current generations from inhaling tar, which, apparently, is not what smokers want but the thing that masks the otherwise unpalatable taste of nicotine and harms them.

    Meanwhile, some people believe that a major issue with the proposed policy is that it simply won’t work—that those who are underage will be able to obtain cigarettes through family members, friends and retailers who turn a blind eye to the law. There is clearly truth in this because the underaged can obtain cigarettes now, but I cannot see that this matters a great deal, at least at a societal level. In fact, it might provide something of a safety valve for the policy. We have vehicle speed limits in the U.K. that are broken by most people on most days, but those limits nevertheless tend to reduce the speed at which people would otherwise drive. People might drive at 35 mph in 30 mph areas, but few do 45 mph. That such a system works can be seen from the fact that few outside of those on the lunatic fringe of libertarianism would agree to speed limits being abolished, allowing petrol heads to drive through cities at 150 mph. And so it is that the tobacco purchasing age law, along with the continuing availability of satisfying, cleaner nicotine products, would have the effect of reducing the number of people taking up smoking. But, of course, it would not stop it.

    The way things currently stand, smokers will not be subjected to a true prohibition because they will have access to nicotine. | Photo: VPZ

    Offering Alternatives

    Nevertheless, as suggested above, the policy does raise concerns in my mind to do with the timing of it and the commitment to it of the current government and even a future government of a different stripe. Also as suggested above, the success or otherwise of this policy will hinge on satisfying, clean nicotine products remaining available even to young adults who, because of their age, will not be able legally to buy cigarettes. This is fundamental to me. I cannot imagine, as others apparently can, a future unchanging utopia where no one uses recreational drugs. And given I am correct in my assumption, cleanly delivered nicotine should have its place in the future. It is a popular and relatively safe drug, especially when compared with something such as alcohol, which, for reasons I can only guess at, is given a free pass by most public health people even though its consumption is a bigger drain on society than tobacco consumption.

    But I digress. The reason I am not convinced the policy will be implemented in a coherent way is that the government, as part of its Oct. 4 news bulletin, said it was planning “a further major crackdown on youth vaping by announcing an intention to consult on plans to reduce the appeal and availability of vapes to children.” The consultation is to take in flavors and product descriptors, disposable vapes, point-of-sale displays, and packaging and product presentation.

    It doesn’t take a genius to know which way this is going. The government says it wants to ensure it gets the balance right between protecting young people and supporting adult smokers to quit, but this is politics, and the “child epidemic” lobby will be allowed to have its finger pressing down on its side of the balance. And if the appeal to adults of clean nicotine products is significantly reduced, then it’s game over. The policy will simply pass the ball to those waiting to fuel the illegal trade in vaping devices and, probably, cigarettes.

    Rushed Policies

    But having said that, the policy could work in theory even though satisfying, cleaner nicotine products were not available, though it would take an investment in policing, the judiciary and the prison service to which no government would commit. The news bulletin said that “[e]nforcement activity will also be strengthened, with an investment of £30 million ($36.42 million) to support agencies such as local trading standards, HMRC [tax collection] and Border Force to take action to stop underage sales and tackle the import of illicit tobacco and vaping products at the border.” You would have to be terribly naive to believe that this amount would be guaranteed, and, in any case, it would be nowhere near enough and would probably not even make up for the disinvestment made in respect of these agencies during the Conservative governments’ 13 years of austerity. The major reason why young people are currently able to obtain vapes so easily is that the funding of trading standards was hugely undermined.   

    Another reason why the policy, though not without merit, is likely to fail is that it probably has not been thought through properly. The U.K. currently is awash with policies rushed out in order to make it appear, ahead of the election, that the government has a purpose. A recent announcement on railway investments was shot through with errors and failed even to place Manchester, the U.K.’s third-most populous city, correctly on a map.

    The tobacco news bulletin is a rambling, repetitive affair that apparently aims to make up with quantity what it lacks in quality. Consequently, we are told on seven occasions that smoking costs the country billions. There are 77 references to smoke or smoking, but you could be forgiven for missing the point that the ban on sales will apparently apply to tobacco products, not just combustible products, because this gets only two mentions. It is full of the usual platitudes that don’t stand up to any sort of scrutiny, such as “[n]o parent ever wants their child to start smoking.” It appears to include one glaring error in saying, “It is already illegal for children to vape.” And it quotes the chief executive of Cancer Research U.K., Michelle Mitchell, as saying, “[t]he prime minister deserves great credit for putting the health of its citizens ahead of the interests of the tobacco lobby,” without adding a caveat to say that if the government had listened to Philip Morris International years ago, the country would already be a long way down the track to being a smoke-free nation.

    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.
  • Roads to Rome

    Roads to Rome

    The MC Cosmic uses airflow technology to heat tobacco. | Photo: HNB Center

    There are multiple ways to heat tobacco without burning it.

    By Stefanie Rossel

    With the multinationals dominating the global market for heated-tobacco products (HTPs), one could easily think there are only two heating solutions—resistive heating with a blade or pin and induction heating. For years, Philip Morris International, which established a whole new category with its IQOS device, had been working on a third method—carbon heating of tobacco—but the company has since discontinued this platform. Recently, however, more heating solutions have entered the market. In their quest to optimize the user experience, independent manufacturers have resorted to other heating technologies.

    At the InterTabac trade fair, which took place in Dortmund, Germany, in late September, HNB Center of the Netherlands presented its MC Cosmic consumable. The associated device is powered by airflow technology. Also known as convection heating, it generates a stream of hot (350 degrees Celsius) air that flows through the heating chamber, surrounding a consumable that is filled with loose tobacco granules instead of a tobacco plug. A membrane at the end of the heat stick prevents the granules from falling out and contaminating the device.

    The granule-filled sticks are the first of their kind, says Gert Gorter, head of export at HNB Center. “The granules consist of 100 percent tobacco derived from tobacco leaves. Together with the heating device, the taste experience is very good.” The airflow technology, he adds, heats the stick more effectively and evenly than a pin, which tends to heat the tobacco immediately surrounding it to higher temperatures than leaf at a greater distance.

    We cannot add any flavors, but we can play with different sorts of tobacco and blends as well as with the number of grams of the granules in the stick.

    Gert Gorter, head of export, HNB Center

    More Like Smoking

    A subsidiary of VCT International, HNB Center began to work with granule-filled consumables provided by Yunnan Tobacco, which holds the patents for the sticks and corresponding device, almost two years ago, first trying them on a traditional device. “The taste was already better,” says Gorter. “You can smoke the sticks with a blade device, but this of course will perforate the membrane and create waste. We didn’t want that, so we thought of using airflow.” While airflow has been around for some time, the technology has improved considerably in recent years, according to Gorter.

    Gorter believes that airflow-heated granule-filled sticks provide consumers with an experience that is closer to traditional smoking than other systems. “Two years ago, we did a survey with smokers on our traditional heat sticks and included two packs of the granule-filled prototypes,” he recalls. “These instantly went to No. 1 in the perception of the participating consumers. The taste is fuller. It’s also our answer to the flavor ban on HTPs, which will be effective in the European Union from May 2024, allowing only tobacco flavor. We want to provide a heat stick that comes close to traditional tobacco smoking. We cannot add any flavors, but we can play with different sorts of tobacco and blends as well as with the number of grams of the granules in the stick; a higher grammage will result in fuller flavor.”

    The device, which is called My Choice NOVA, has a battery capacity of 15 sticks, making it suitable for the average smoker, who typically consumes 13 cigarettes a day. Gorter is convinced that his technology will make a significant change. “You can also put any stick in this device; the whole system of airflow is giving you a better smoke experience.”

    The company started its business in 2019, when it obtained the European distribution rights for the heat sticks from Yunnan Tobacco. HNB Center created the brands, designed the packaging and developed a marketing narrative. “At that time, PMI was the only HTP manufacturer in the European market,” says Gorter. “In 2019, we launched MC, which is the heat stick brand, and My Choice, which is the device. We started with traditional heat sticks similar to PMI’s Heets. What makes us different in this market dominated by the big four is that we work with independent players—distributors, wholesalers and agents who do the sales and marketing in the countries where we are present.”

    Currently, the company sells its products in seven countries, including Italy—Europe’s largest HTP market—Portugal, Spain and some Eastern European countries, and it aims to expand into new markets.

    Due to the flavor ban, Gorter expects the entire EU HTP market, where flavored heat sticks account for 70 percent of sales, to change. Flavored sticks also represent a big share of HNB Center’s business. The company is betting that its tobacco-flavored granule-based consumables will help offset declining sales of flavored products following the EU ban.

    HNB Center plans to launch its MC Cosmic consumables and device in several countries, starting in Italy, where HTP consumption currently stands at 6 billion sticks annually.

    Fast and Precise

    NVX Labs heats tobacco with an alternating electromagnetic field, not unlike that generated by a microwave oven. | Photo: NVX Lab

    Meanwhile, in Switzerland, NVX Labs is developing an HTP device using radio frequency (RF) technology. The concept is similar to that of a microwave oven: A radio frequency generator generates an alternating electromagnetic field within a cavity that holds the consumable. The tobacco plug inside the consumable comprises primarily tobacco and flavor, especially VG, PG and water molecules.

    These molecules absorb the radio frequency energy at a frequency of 2.45 GHz. Their inherent dielectric loss properties cause them to rotate and align with the oscillating field’s opposite pole, similar to how a bar magnet behaves in a fluctuating magnetic field. The molecular movement in turn generates heat.

    Ralf Dummler | Photo: NVX Lab

    NVX Labs’ technology allows for contactless, precise heating of the tobacco plug and distinct flavor profiles, according to Ralf Dumler, founder and chairman of NVX Labs. It also effectively manages the release of nicotine. “The flexibility of the radio frequency energy, adjustable within milliseconds, guarantees exceptional precision in heating the tobacco plug and aerosol release,” he says. “This technology eliminates the need for any metal pieces, metal foils or a heating blade within the tobacco plug, signifying a major advancement toward sustainability in line with the U.N. 2030 agenda for sustainable development.”

    The device operates within the ISM band, a universally accessible frequency range that doesn’t require users to obtain a license. Upon activation, the device prepares the consumable within 4 seconds to 5 seconds for the first puff. What’s more, the technology can achieve equivalent aerosol production at temperatures below 210 degrees Celsius.

    “Thanks to our technology, tobacco companies can now develop a consumable similar to PMI’s Terea, with a closed end of the tobacco plug but without the need for a metal component inside the tobacco plug,” says Dumler. “In our latest product developments, we’ve harnessed the power of cutting-edge materials science to eliminate the need for traditional tobacco or reconstituted tobacco in the tobacco plug or filling. This sustainable approach not only promotes an eco-friendlier solution but also enhances aroma and provides an elevated consumer experience—all without relying on substrates derived from the tobacco plant.”

    Apt for Medical Use

    Initially collaborating with a multinational pharmaceutical company, NVX Labs is the pioneering patent holder for RF HTP technology, according to Dumler. The intellectual property provides protection beyond reduced-risk products to both medical and recreational cannabis applications.

    Furthermore, the device can function as a conventional pharmaceutical inhaler tailored for the pharmaceutical industry.

    A chemist by training with a strong background in the pharmaceutical industry, Dumler had previously ventured into RF heating through his initial startup company. The inspiration to use the technology for HTPs, he says, was a natural progression.

    NVX Labs first crafted a handheld prototype demonstrating the feasibility of RF heating for commercially available HTP consumables. Additionally, the company offers its own commercially available evaluation and testing device, enabling tobacco companies to assess RF heating technology and develop their own RF heating products.

    Alberto Torreno, co-founder and managing partner of NVX Labs, is optimistic about advancing his HTP device to the preproduction phase within approximately 18 months. He believes that the vast HTP market might intrigue the semiconductor industry because his device relies on GaN and LDMOS solid-state semiconductors.

    Simultaneously, NVX Labs is developing a pharmaceutical product, a thermal metered-dose inhaler. The company is researching the potential of this inhaler for administering Salvinorin A, a compound that has shown promise for addressing treatment-resistant depression and substance use disorders.

    Although Salvinorin A has yet to be approved by the U.S. Food and Drug Administration or the European Medicines Agency, Dumler proactively included its potential applications in his patent. “Our pulmonary drug delivery device offers the unique benefit of heating a drug product with pinpoint accuracy and without excipients, which enables new applications of drug delivery within the pharmaceutical industry,” he says.

    A Ray of Light

    Sixhill, the HTP division of First Union Technology of Shenzhen, China, presented several devices using its Breelight heating technology at InterTabac. According to Sixhill, Breelight is the first infrared heating technology for tobacco. The company says it can effectively stimulate the release of tobacco aroma and nicotine due to the absorption peak characteristics of different flavors, thus achieving unique flavor styles.

    In this technology, infrared radiation travels through air or space until it hits an absorbing surface where it is partially converted to heat and partially reflected. But rather than warming the ambient air, this heat warms its object directly.

    Used in an HTP, Sixhill says, the technology heats tobacco more evenly and efficiently, improving the utilization rate of a stick to 90 percent. According to the company, IR heating improves the aroma quality, intensity and sustainability of tobacco. It also releases nicotine more effectively than other technologies.

    Sixhill’s Aurr device reportedly has a nicotine release rate of 95 percent and a nicotine transfer rate of 45 percent.

    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.
  • Connecting the Global Industry

    Connecting the Global Industry

    Photo courtesy of Quartz Business Media

    Get ready for WT Middle East

    World Tobacco Middle East is set to return to Dubai Nov. 27–28, 2023, reasserting its position as the largest international B2B tobacco event beyond western Europe, drawing attendees from over 90 countries. As the premier event for the Middle East’s tobacco industry, it has become a cornerstone for professionals in the field, fostering vital in-person connections, networking and business. 

    Trusted by leading brands and manufacturers, WT Middle East is the flagship exhibition of the World Tobacco series, which annually gathers over 13,000 professionals. With established events in the Middle East, Europe and Asia, the WT Events portfolio will be further expanding into Africa next year with a conference and exhibition in Zimbabwe, reflecting its dedication to supporting clients entering new markets and stimulating business growth. 

    This year’s event in Dubai is poised to be its biggest yet, featuring over 250 exhibitors, welcoming over 7,000 visitors and showcasing thousands of products. Due to its impressive growth, the event show floor has expanded to another hall, the Trade Centre Arena, with stand space now completely sold out.

    With new exhibitors from HTL Human Trust Lean, Khyber Tobacco Co., Multi Tabak, Ora Tobacco and Mind Spirit Designs & Works as well as returning companies such as Sopariwala, Kaane, ARD, Gulbahar and Premium Tobacco, the upcoming trade show promises to offer an even wider range of products and services for attendees. 

    To ensure a truly immersive experience, attendees can use the Lex Tobacco Smoking Lounge, an expansive 700-square-meter space designed for meetings, relaxation and product sampling. 

    At World Tobacco Middle East 2023, you can participate in the largest tobacco event outside Western Europe, avail yourself of exclusive offers from over 250 leading suppliers, connect with industry leaders, explore cutting-edge machinery and gain insights into regulatory matters. Such trade events are pivotal in nurturing personal and business relationships within the global tobacco industry. 

    For more information and registration details, please visit www.wtevents.com/middle-east.

  • Surprising Successes

    Surprising Successes

    Image: chokniti

    The uncelebrated triumphs of tobacco harm reduction

    By Cheryl K. Olson

    U.S. smokeless tobacco users are no more likely to die from cancer than people who never touched tobacco products. This unexpected news comes courtesy of the National Longitudinal Mortality Study. Compared to those who never used tobacco, current users of smokeless products do not have elevated mortality risks from all cancers combined.

    This was just one happy fact I ran across when writing articles for doctors summarizing alternative nicotine product risks and benefits. I felt a similar “Wow! Really?” writing recently for this magazine about today’s astonishingly low youth smoking rates. 

    It’s time to stop, notice and give a cheer for good news about tobacco harm reduction (THR) that doesn’t get enough attention. Interesting evidence from research studies, natural experiments and everyday life observations ought to be shared.

    This is not just about raising smiles. The accumulated weight of these bits of information can change mindsets. They can influence how future studies are framed and which policies are proposed and implemented.

    I asked colleagues involved in harm reduction to suggest examples to celebrate. They include:

    • reduced-risk options that knocked down smoking in a particular nation or subgroup;
    • unexpected positive shifts in behavior, such as people who try vaping and notice one day that they no longer smoke;
    • harmful behaviors we were worried about that, to our relief, don’t seem to be happening (i.e., vaping as a gateway to youth smoking);
    • and finally, personal observations about the effects of THR.

    Transforming the Map

    We can’t say it often enough: cigarette smoking is still the leading preventable cause of disease and death in the U.S. It kills millions worldwide every year. Preventing cigarette use and helping people who don’t quit to consider lower-harm alternatives are medical and moral imperatives.

    As pioneering nicotine researcher Karl Fagerstrom has said, “Realistically, no single alternative nicotine product category will be able to reduce smoking rates and the associated disease burden.” Individuals and nations will find different options appealing and acceptable. His article “Can Alternative Nicotine Products Put the Final Nail in the Smoking Coffin?” highlights five nations’ successes. In the U.K., Sweden, Norway, New Zealand and Japan, higher uptake of alternative nicotine products has meant lower smoking rates compared to their neighbors.

    According to the Associated Press, “Sweden, which has the lowest rate of smoking in the Europe Union, is close to declaring itself ‘smoke-free’—defined as having fewer than 5 percent daily smokers in the population.” As of 2022, they had reached 5.6 percent. Thanks in large part to snus, Sweden has the lowest tobacco-related mortality among men in Europe.

    David Sweanor of the Centre for Health Law, Policy and Ethics at the University of Ottawa regularly monitors tobacco company behavior. When Japan Tobacco released their second-half results in July, he noted the “extraordinary” shift in Japan’s tobacco use.

    “Overall, the cigarette market has declined by half since heated products were introduced,” Sweanor says. “It is important to note that Japan has achieved this dramatic decline in cigarette smoking without policies actively encouraging the change.” 

    Roberto Sussman of the National Autonomous University of Mexico UNAM challenges us to look at the inverse proposition. “In the last 20 years, is there one case—a country, a subpopulation—of a significant reduction in smoking prevalence in which any effect or influence from usage of noncombustible products can be absolutely ruled out?” he asks. “I doubt there is a single case.” 

    Natural experiments created by bans on e-cigarettes in some U.S. states offer added noteworthy support for vaping as an effective substitute for smoking. Compared to “control” states with no full or partial e-cigarette bans, the states of Massachusetts, Washington and Rhode Island saw increased cigarette sales.

    Inadvertent Quitting

    Personal stories and research have shown that taking up vaping can mean putting down cigarettes—for people who initially had no plans to quit. This includes analyses by Karin Kasza and colleagues of widely respected ongoing studies such as the Population Assessment of Tobacco and Health (PATH) and the International Tobacco Control Four Country Smoking and Vaping surveys (of the U.S., Canada, Australia and England).

    A recent systematic review by Elias Klemperer and colleagues found little evidence that conventional smoking cessation methods induce quit attempts among those without plans to do so. “The optimal treatment (or treatment combination) for this population remains unclear,” the authors state.

    “No one ever ‘quit by accident’ with a nicotine patch, nicotine gum, nicotine lozenges, nicotine inhalers, Chantix/Campix, bupropion or smoking cessation counseling,” says Charles A. Gardner of Harm Reduction Strategies. “But millions of smokers who had no intention to quit have ‘quit by accident’ with nicotine vapes.”

    Gardner believes this point deserves more attention. “If 75 percent of smokers claim they want to quit, then obviously 25 percent have no intention to quit,” he says. “No approved smoking cessation intervention will ever reach them. Nicotine vapes do.”

    A related finding that deserves notice: Researchers at the U.S. Food and Drug Administration’s Center for Tobacco Products published evidence that mint/menthol ENDS users were more likely to switch and quit than tobacco-flavored e-cigarette users. The authors refer to additional research that identified better switching odds with nontobacco-flavored products.

    Gateway or Diversion?

    I previously reported on the unanticipated and little-lauded plunge in U.S. youth smoking rates (“Where’s the Parade?,” Tobacco Reporter, March 2023). The 2022 National Youth Tobacco Survey found that one in 10 (10.9 percent) high school students had ever tried a cigarette. Just 2 percent reported smoking in the past 30 days.

    Although youth vaping is down from its 2019 peak, e-cigarettes are the most common nicotine product used by teens. Past-month use stands at 14.1 percent. Concerns have persisted among researchers and policymakers that vaping could lead youth who wouldn’t otherwise smoke to start.

    Recently, more sophisticated assessments have challenged that connection. PATH study analyses by Kenneth Warner of the University of Michigan and colleagues show that few teens become established smokers regardless of previous e-cigarette use. When other known risk factors for youth smoking are taken into account, it turns out that ever-use of e-cigarettes makes a trivial difference. 

    Rather than leading teens down a path to smoking, e-cigarettes seem more likely to divert teens away. A new article by Christine Delnevo and Andrea Villanti of Rutgers University does a deep dive into national trends in high school student smoking since 1991. They found that “the most rapid declines in cigarette prevalence have occurred in the past decade, when e-cigarettes emerged as a popular product among youth.”

    THR in Daily Life

    A scientist who has worked in harm reduction inside and outside of industry points to an under-praised behavior shift in one important subgroup: people who work in nicotine product companies. At both the offices of a large e-cigarette maker and at a legacy multinational tobacco company, “I’ve never seen or known someone to smoke,” they said. “Even at a bar or outside of the office. But plenty of people vape or use other alternatives. And most, if not all, were former smokers.”

    Their conclusion? “Reduced-risk product availability and a culture of acceptance actually change behavior.”

    Christopher Greer, CEO of TMA and president of The GTNF Trust, described how tobacco harm reduction principles benefited his health in unexpected ways. “When I met my wife, I was very heavy—coming up on 260 pounds. I had a dependency on food for stress relief, and a stressful job.” He found that the typical advice from health professionals (e.g., cut out junk foods and fast food) didn’t fit his situation. Nor did a pharmaceutical option.

    “Utilizing principles I knew from THR, I crafted a risk reduction plan for my eating,” Greer says. For example, he identified and targeted situations that put him at high risk for overeating. “It was incredibly difficult, but a decade later, I’m a much healthier, stable weight.”

    Greer likens his transformation to transitioning to reduced-risk tobacco products: “another form of people finding agency in their own health decisions, when standard treatment isn’t working.”

    Citations

    Chang JT et al. (2023). Characteristics and patterns of cigarette smoking and vaping by past-year smokers who reported using electronic nicotine-delivery systems to help quit smoking in the past year: Findings from the 2018–2019 Tobacco Use Supplement to the Current Population Survey. Nicotine & Tobacco Research. https://doi.org/10.1093/ntr/ntac199

    Delnevo CD & Villanti AC (2023). Dramatic reductions in cigarette smoking prevalence among high school youth from 1991 to 2022 unlikely to have been undermined by e-cigarettes. International Journal of Environmental Research and Public Health. https://doi.org/10.3390/ijerph20196866

    Fagerstrom K (2022). Can alternative nicotine products put the final nail in the smoking coffin? Harm Reduction Journal. https://doi.org/10.1186/s12954-022-00722-5

    Kasza KA et al. (2021). Association of e-cigarette use with discontinuation of cigarette smoking among adult smokers who were initially never planning to quit. JAMA Network Open. https://jamanetwork.com/journals/jamanetworkopen/article-abstract/2787453

    Kasza KA et al. (2023). Associations between nicotine vaping uptake and cigarette smoking cessation vary by smokers’ plans to quit: longitudinal findings from the International Tobacco Control Four Country Smoking and Vaping Surveys. Addiction. https://onlinelibrary.wiley.com/doi/10.1111/add.16050

    Klemperer EM et al. (2023). A systematic review and meta-analysis of interventions to induce attempts to quit tobacco among adults not ready to quit. Experimental and Clinical Psychopharmacology. https://psycnet.apa.org/doi/10.1037/pha0000583

    Sun R et al. (2023). Association of electronic cigarette use by U.S. adolescents with subsequent persistent cigarette smoking. JAMA Network Open. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2802764

    Sun R et al. (2022). Is adolescent e-cigarette use associated with subsequent smoking? A new look. Nicotine & Tobacco Research. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8962683/

    Timberlake DS et al. (2017). A longitudinal study of smokeless tobacco use and mortality in the United States. International Journal of Cancer. https://onlinelibrary.wiley.com/doi/10.1002/ijc.30736

    Xu Y et al. (2022). The impact of banning electronic nicotine-delivery systems on combustible cigarette sales: Evidence from U.S. state-level policies. Value in Health. https://doi.org/10.1016/j.jval.2021.12.006

    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.
  • A Heady Mixture

    A Heady Mixture

    Photos: AIR Global

    AIR Global is revolutionizing shisha smoking with a mixture of technology and tradition.

    By George Gay

    As anybody who has tried it will be aware, dabbling with tradition is usually fraught, but it can be done successfully provided the rituals of the tradition remain largely the same and any changes introduced are aimed exclusively at improving the experience of taking part in the traditional activity. This idea came to mind while taking part in a Q&A with Ronan Barry, chief corporate and regulatory affairs officer at Advanced Inhalation Rituals Global (AIR Global), because the focus at one point turned to the company’s latest product, OOKA, which Barry described as the “future of shisha.”

    Tobacco Reporter: Can you describe what sets OOKA apart and the philosophy behind it?

    Ronan Barry: With OOKA, we’ve successfully blended the rich traditions of shisha with cutting-edge technology, offering a shisha experience like no other. Our philosophy at AIR Global revolves around pushing the boundaries of traditional shisha experiences, with a particular focus on reducing toxicants in shisha aerosol while delivering cleaner, more consistent and higher quality inhalation rituals.

    Before you go into the details of OOKA, could you briefly describe traditional shisha consumption?

    Traditionally, flavored shisha involves the heating of the shisha mixture rather than burning, setting it apart from combustible tobacco products. Shisha itself is a moist mixture comprised primarily of glycerin and fructose and a relatively small amount of tobacco. The mixture heats to a temperature of about 200 degrees Celsius, creating vapor that is fundamentally different from tobacco smoke.  However, the conventional heat source is charcoal, which does burn and emits toxicants such as carbon monoxide. These emissions can, depending on how the shisha is set up, penetrate the waterpipe device and also pollute indoor environments.

    But your new product is different?

    Very much so. Our latest innovation, OOKA, introduces a revolutionary concept. It is the world’s first pod-based, charcoal-free shisha device, which heats the molasses in a micro-oven powered by a rechargeable battery. Its innovative heating element, in collaboration with an integrated microchip, heats the shisha to its optimal temperature. This ensures users enjoy a consistent and pleasurable experience, drawing a parallel to the precision that coffee enthusiasts seek in achieving the perfect brew. Importantly, OOKA’s innovative design brings the traditional shisha ritual into the modern era by removing the need for charcoal to heat the shisha and, in turn, removing charcoal “smoke” from the experience. As such, OOKA provides the cleanest shisha experience available for both users and the environment. It offers, on average, a 94 percent reduction in a range of harmful chemicals and nondetectable levels of carbon monoxide.

    Are there other advantages?

    Certainly. The new system eliminates any inconvenience of preparation, ash and mess. It reduces the preparation time to five minutes—four times faster than conventional waterpipe devices on the market. The pods contain the prepared shisha, and OOKA’s smart technology monitoring system checks the temperature 25 times per second before it passes through the water for inhalation. This offers consumers the ease of a lounge experience at home at a drastically reduced price.

    Would you describe your company briefly?

    AIR Global, which was founded in 1999, is majority owned by London-based private equity firm Kingsway Capital. We are headquartered in Dubai, United Arab Emirates (UAE), with offices in the U.S., U.K., the UAE, [the] KSA [Kingdom of Saudi Arabia], India, Poland and Germany, and factories in Ajman, [the] UAE and Poland. Reinhard Mieck is the CEO of AIR Global, which he joined in May 2021, bringing with him a wealth of experience from a 19-year career in FMCG and nine years in the luxury industry.

    Is AIR Global a profitable company?

    Yes. Our growth over the years is a testament to our commitment to innovation, product quality and customer satisfaction. Partly by expanding our customer base to more than 100 countries today, we have consistently outperformed the market. We are currently the leading company in the global shisha market, with 47 percent market share. Beyond our current success, we envision significant long-term growth, reflecting the promising future of the entire shisha category. Presently, the global shisha market is valued at $19 billion, and by 2026, it is forecasted to rise to $22 billion, underscoring the potential for continued expansion and innovation.

    Our philosophy at AIR Global revolves around pushing the boundaries of traditional shisha experiences, with a particular focus on reducing toxicants in shisha aerosol while delivering cleaner, more consistent and higher quality inhalation rituals.

    Ronan Barry, chief corporate and regulatory affairs officer, AIR Global

    What products do you offer beyond OOKA?

    The most significant is Al Fakher, the world’s leading brand of shisha molasses. We have recently launched Shisha Kartel, the fastest-growing shisha brand in Europe, and we offer Zodiac, which is a non-nicotine, nontobacco tea-based product. Our influence extends to various aspects of the shisha industry, and through our online platforms, such as Hookah-Shisha.com in the U.S. and Shisha World in Europe, we sell a range of shisha devices and accessories. In particular, we promote the use of heat management devices in place of aluminum foil in the setup of a shisha session to deliver a cleaner shisha cloud with minimal toxins to every consumer.

    Where, geographically, does AIR Global currently sell its products? Is that geographical spread increasing or decreasing?

    AIR Global currently sells its products in more than 100 countries, showcasing our global reach and commitment to serving diverse communities. While the Middle East, the United States, Europe and Africa are our largest markets, our presence continues to expand.

    Are AIR Global’s volumes increasing or decreasing, and is this increase or decrease driven by particular markets?

    Our sales volumes have been on an upward path, reflecting the appeal of our innovative products such as OOKA. The launch of OOKA made a significant impact, with its charcoal-free and smoke-free design. In fact, OOKA achieved remarkable success in the UAE, where it quickly sold out within a month of launching due to its unique appeal. Our dedication to innovation and product quality continues to drive growth and customer satisfaction in various markets.

    Are consumer preferences changing, especially perhaps in respect of shisha flavors?

    Consumer preferences are evolving in respect of shisha, and our commitment to staying ahead of these preferences ensures that we continue to provide an exciting and evolving range of shisha flavors to satisfy our customers. Shisha enthusiasts today have a growing appetite for a wider range of flavors and experiences. This has driven us to expand our flavor offerings and introduce innovative options that cater to diverse tastes, such as Zodiac nicotine-free tea-based shisha flavors, which come in both the traditional shisha format as well as in pods designed for the OOKA system, making this shisha experience available to a wider audience.  We anticipate substantial growth in the nicotine-free segment, similar to the trend toward alcohol-free beers, wines and spirits.

    How does the regulatory landscape for shisha look?

    The fundamental differences between shisha and other tobacco and nicotine products are increasingly appreciated by regulators. Recently, the state of California prohibited all flavored tobacco and nicotine products but created a specific exemption for shisha. The reasons for this were the social and cultural importance of shisha as well as the fact that it is not conducive to youth use and tends to be consumed occasionally rather than compulsively. The global average consumption frequency among regular shisha users is two sessions per week.

    Do you have any idea of the age profile of shisha users?

    External sources, such as data published by the CDC [Centers for Disease Control and Prevention] and FDA [Food and Drug Administration] annually in the United States, demonstrate that shisha is very much an adult-oriented pastime. For several years now, the rate of experimentation by minors with shisha has been in the low single digits and the lowest among tobacco and nicotine products. This is not surprising as shisha is a time-consuming ritual, usually enjoyed in social settings, and cannot be consumed inconspicuously or on the go.

    AIR Global says it has blended the rich traditions of shisha with cutting-edge technology.
    AIR Global says it has blended the rich traditions of shisha with cutting-edge technology.

    Why do people consume shisha?

    People consume shisha for various reasons, making it a multifaceted experience. Shisha is often a cultural and social ritual that brings people together. It serves as a means of relaxation, enjoyment of diverse flavors and a platform for engaging in conversations with friends and family. The rich heritage and centuries-old tradition associated with shisha contribute to its appeal, fostering a sense of connection and shared experience among enthusiasts.

    Given the often strongly social aspects of shisha consumption, did the pandemic have a negative effect on sales?

    Yes and no. On the one hand, social engagement was limited during the pandemic; shisha bars were closed in many countries, and that did have an impact. On the other hand, border closures had the effect of substantially cutting down smuggling, which was a boon to legally operating businesses and mitigated some of the negative impacts of the pandemic. 

    Are counterfeit products a major problem in respect of shisha markets?

    Counterfeit products can be a concern in the shisha market, and we take this issue very seriously. The production of counterfeit shisha products creates multiple risks to consumers and can tarnish the reputation of legitimate manufacturers. We are committed to addressing this problem through a multifaceted approach to protect the health and safety of end users and uphold industry standards. For instance, the OOKA pod system incorporates patent-protected smart technology and a counterfeit-resistant design. It uses RFID [radio-frequency identification] technology for heating profiles, an NFC [near-field communication] chip to ensure only AIR Global-approved pods work with OOKA, 128-bit AES [advanced encryption standard] encryption to prevent counterfeit pods from functioning, and microchips for traceability.

    How is shisha taxed relative to other tobacco products, and do taxation levels play any part in exacerbating the illegal trade?

    Shisha is often unfairly taxed in relation to other tobacco products because of the outdated approach of taxation based on weight. This practice fails to consider the unique characteristics of shisha, which include a significantly lower presence of tobacco and toxicants compared to combusted tobacco. Shisha should be classified as a distinct category with its own taxation framework that doesn’t penalize the weight of nontobacco ingredients in the product. Adopting a more considered taxation system that aligns with the nature of shisha would not only protect consumers from unfair taxation but would also help address the issues of black market and counterfeit shisha products, ensuring the health and safety of end users while preserving government revenue.

    Finally, are there going to be any major changes to AIR Global or the way it operates in the near future?

    As a forward-looking company, we are continually exploring opportunities for growth and innovation. Our commitment remains unchanged—to deliver the highest quality products and services to our customers. Our focus continues to be on pushing the boundaries of the shisha experience, ensuring that we stay at the forefront of the industry and continue to offer unparalleled shisha experiences.

    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.
  • Changing the Conversation

    Changing the Conversation

    Photo: Sayan

    From Sept. 19 to Sept. 21, 2023, stakeholders from around the world gathered in Seoul to discuss the challenges and opportunities in the nicotine business, particularly as they relate to tobacco harm reduction. Attracting delegates from all parts of the globe, the event featured a wide variety of experts, including public health professionals, consumer advocates and financial analysts along with top regulators, such as the director of the U.S. Food and Drug Administration’s Center for Tobacco Products, Brian King. Below are highlights from the conference.

    Additional GTNF 2023 session summaries >>

    Keynote: Kingsley Wheaton (given by Jonathan Atwood)

    During GTNF 2023, BAT’s global head of business communications, Jonathan Atwood, told attendees how BAT’s five-step plan for regulation could support achieving the right balance between harm reduction and the unintended consequences of access, including underage use.

    “As an industry, we stand at an important crossroads. There is much confusion as to the way forward. Consumers are slightly confused. Doctors are slightly confused. Regulators are slightly confused and are struggling to enforce the laws they have written,” said Atwood. “What’s too often missed is the opportunity that tobacco harm reduction presents. The opportunity for a more progressive environment where both tobacco harm reduction and the role of [vaping products] is far better understood.”

    Speaking on behalf of Kingsley Wheaton, BAT’s chief strategy and growth officer, Atwood said that reckless players in the market need to be penalized when they do not abide by the rules. He said the five suggestions are the areas that regulators should explore and then establish “smart regulation” that is right for their market.

    “When I talk about smarter regulation, I mean regulation that is evidence-based, concentrated by nature, and achieving its policy aims while also avoiding unintended consequences. Greater partnership is required to achieve this,” Atwood said. “We must join forces externally with regulators and policymakers to try and create catalysts for positive change if smoke-free ambitions are to be met. Sustained and lasting changes to consumer behavior are difficult. However, it is consumer choice that offers the greatest hope for making a cigarette obsolete.”

    Atwood said that the five areas were where smarter regulation could be applied to the vapor category to build a “more progressive environment” for tobacco harm reduction. He said the recommendations would need to be applied to the entire market and combined with greater enforcement. The five steps Atwood outlined included:

    • On-device technology and functionality: Vapor products should be accessible only to adults. Both underage prevention and restriction is crucial. On-device technology, when applied and enforced across entire markets, could help in this regard.
    • Flavors: More recognition is needed that flavors are an important driver of adoption for smokers seeking alternatives. However, flavors in vapor products should not particularly appeal to anyone underage.
    • Manufacturing and import level: ensuring that noncompliant products cannot reach the market in the first place.
    • Right to sell: Where no restrictions exist already, regulators may want to look at who should be able to sell vapor products and where. Reasonable safeguards at the point of sale would help ensure these products are sold only to adult consumers. Solutions such as retail licensing and facial recognition technologies should be seriously considered.
    • Enforcement and penalties: Governments must wield their power and ensure consumers are purchasing legitimate products. Such measures should be rigorously enforced, and those who fail to comply should face meaningful sanctions.

    Atwood said BAT was calling upon governments, regulators and industry peers to rally toward a sustainable and progressive environment in which vaping products are sold and marketed responsibly.

    “The time for boldness is now. The time to change the conversation is now. The time to change the outcome is now. The opportunity for change is here. It is not about relaxing regulations. It’s about recalibrating them to align with the evidence and aspirations of millions seeking a better alternative to smoking,” said Atwood. “We have the opportunity to redefine the future of public health, and it begins with smarter regulation that reflects the reality of smoking alternatives and provides smokers the freedom to choose less risky products.”

    Panel: Putting Consumers First

    Toward the end of the Putting Consumers First panel held during September’s Global Tobacco and Nicotine Forum in Seoul, South Korea, Matt Drodge, research director at Walnut Unlimited, made the point that while nicotine consumers were all different, they all wanted to be able to make informed decisions about whether to continue smoking combustible cigarettes or when and how to make the transition to new nicotine products.

    Of course, nicotine users can make such transitions only in countries where regulations allow them to do so, and the moderator of the panel, Nancy Loucas, public health policy expert and executive coordinator of the Coalition of Asia Pacific Harm Reduction Advocates (CAPHRA), made the point that the panelists represented countries forming a continuum of nicotine regulation.

    Panelist Samrat Chowdhery, former president of the International Network of Nicotine Consumer Organisations, told participants that he felt unhappy about representing India, a country that had put consumers last by effectively banning vapes. Chowdhery said this is a pity because India does not have a strong or widely used public health network, so prevention, including through the use of safer alternatives, is vital, as it is in other parts of the developing world where 80 percent of tobacco users live.

    Fiona Patten, leader of the Reason Party and former member of the Legislative Council of Victoria, who was unable to attend the GTNF in person and instead recorded a video message, apologized for representing Australia, a country that she said is leading the way on what not to do around tobacco harm reduction. Patten said that Australia’s “so-called medical model” of regulation is so onerous that 99 percent of Australians who are looking for a safer way to consume nicotine are being forced onto the black market.

    Alex Clark, CEO of the Consumer Advocates for Smoke-Free Alternatives Association, who also did not attend the event, but appeared via a live link, said the premarket tobacco product application (PMTA) system in the U.S. appears to consumers to be acting as a very tight bottleneck on the products they have access to; no flavored products have been authorized through the system, only variations of tobacco. Beyond the PMTA system, there was also concern that a methodical state-by-state, municipality-by-municipality effort to severely restrict the availability of lower risk products would continue. Clark said that while he hopes that in the future people will be able to find products they can trust, he questioned why there has to be a delay. What is needed now is to disseminate the idea that nicotine users are not just data on a spreadsheet and to get that message out, elevating it up the chain to the regulator.

    Clarisse Yvette Virgino, a Philippines-based member of the CAPHRA, had a more positive tale to tell because a “wild journey” that had seemingly been headed toward prohibition had ended with regulation. The regulations were somewhat burdensome, however. Retailers had a lot of rules to comply with, and there was a problem when it came to consumer choice because manufacturers had withdrawn certain products, such as juices, rather than go through the process of complying with what were stringent requirements.

    Panel: Reinforcing Scientific Research

    During the Reinforcing Scientific Research panel held as part of September’s Global Tobacco and Nicotine Forum in Seoul, South Korea, New Zealand-based Marewa Glover, director of the Center of Research Excellence on Indigenous Sovereignty and Smoking, made the point that the forum had heard many times how there is a need for tobacco and nicotine policies to be grounded in science and, therefore, evidence-based. There is, in fact, no disagreement on this point between tobacco control officials and tobacco harm reduction (THR) advocates, she said. However, care needs to be exercised because a form of evidence has been appropriated by some opposed to THR, and they are driving a broad social change agenda aimed at instituting a utopia where, for instance, no one would ever use drugs. They used scientific platforms loaded with people who shared their views to spread their ideology. They redefined the meanings of words so that unproven assertions became facts and facts became lies. To combat such views, she added, it is necessary for THR advocates to produce demonstrably robust research as part of a project that includes a communication strategy identifying stakeholders and how the information is to be gotten to them.

    Glover had been asked three questions by moderator, Mark Littlewood, director general of the Institute of Economic Affairs: What needed to be done to reinforce scientific research into tobacco and nicotine?; who should form the audience for the research findings?; and how should the findings of junk science be challenged?—questions he also posed to the rest of the panel.

    Kai-Jen Chuang, professor in the Department of Public Health at Taipei Medical University, explained that THR is not taught as part of medical degrees in Taiwan and therefore is not a well-recognized term, even though harm reduction principles are engaged in other areas. In fact, vapes were banned in Taiwan on March 22 this year. What is taught is health promotion and, more latterly as part of social-work courses, disaster reduction. He pointed out, nevertheless, that health promotion, disaster reduction and THR have similar goals, so those from outside Taiwan wishing to engage at conferences with public health officials over THR principles should present their papers, translated into Chinese, as health promotion studies. Nevertheless, he warned that it would be difficult, because of their training, to convince public health people of all stripes of the efficacy of using new technology to reduce the harm caused by smoking. The starting point for getting across messages about THR, he added, should be scholars with open minds, and from there, the focus could move to journalists and politicians.

    Riccardo Polosa, professor of internal medicine at the University of Catania and founder of the Center of Excellence for the Acceleration of Harm Reduction (CoEHAR), said there is a need to reinforce quality science that has good repeatability. Repeatability, he added, is currently in crisis and not just in respect of tobacco control science, so the CoEHAR has established a comprehensive repeatability program pertaining to research into toxicity and biology in respect of combustion-free, nicotine-containing products. The program involves setting up and researching in seven laboratories with the same equipment and the same procedures to come up with super strong findings. Another thing that is needed, Polosa said, is to shift the focus from risk to harm. Relative risk has been studied for a decade now, and it is an easy win if combustible products are compared with combustible-free products. So now is the time to look at the absolute risk and show that it is low and that the level of harm is super low. This would provide a better position from which to convince governments, regulators and the public. Polosa had some good news on junk science, which he said is easy to debunk because it is junk, though this takes energy and time and requires a willingness to do it. A global network of scientists is actively rebutting junk science articles, though the challenge now is to speed up this process of rebuttal.

    Picking up on an earlier comment about uncertainty, Konstantinos Farsalinos, research fellow at the Onassis Cardiac Surgery Center, made the point that uncertainty is inherent in science and essential to human progress. There is nothing wrong with uncertainty provided that it is not used to maintain the status quo, especially where the status quo has failed miserably. It is important, also, that uncertainties are not used as the basis for decision-making, which needs to be based on current knowledge. But one problem being faced today is that current knowledge is not being used to make decisions [about THR]; rather, decisions are being made on the back of the abuse of uncertainties [that the long-term use of THR strategies are unknowable at this stage]. Revisiting the 1986 Ottawa Charter for Health Promotion by the World Health Organization, Farsalinos said, it is obvious that it was basically talking about harm reduction in our everyday lives. Everything, even medicine itself, was a harm reduction science because it was not possible, probably, to cure any disease besides certain infections. We were treating diseases and reducing the adverse effects and consequences of diseases. This was all known. What is needed now is the reinforcement of the applicability of scientific data, of which there is a lot, on decision-making, something that has not happened in many parts of the world. Finally, Farsalinos said that he has had bad experiences in rebutting junk science even though he has been successful. Basically, he had run into a wall behind which people had decided what they believed and were casting around for the data to support their predetermined views. With science, you have to do the opposite of that, he said.

    Keynote: Brian King

    When Brian King speaks, people come to listen. The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) director’s keynote address was easily the best attended session of GTNF 2023. King’s speech served as an overview of the current state of the CTP and an outline of the center’s main priorities over the next few years.

    King said that the CTP has made considerable progress in reducing combustible cigarette smoking in the United States, which he contends as one of the most remarkable public health achievements of the past century. He hopes that those declines continue, given that “we do know” that combustible smoking is responsible for the overwhelming burden of death from using combustible tobacco.

    Tobacco use continues to cost the U.S. government a considerable amount of money—to the tune of $600 billion per year from both direct healthcare costs and lost productivity, according to King. He said there are important human health benefits as well as financial benefits for regulators to continue to focus on reducing combustible use in the United States. As a part of this focus, he said, the CTP is continuing to make inroads when it comes to premarket tobacco production application review.

    “We have a new director of our Office of Science who has jumped in headfirst to continue to fiercely lead our 550-plus scientists on application review …. We have processed 99 percent of those and continue to finalize the remaining 1 percent. I’m hopeful that in the coming months and years, we will get back to what was intended to be a premarket approval process,” said King. “In the meantime, we have authorized 23 e-cigarettes, all tobacco flavored. So, it is possible. We have had successful authorizations. But again, I can’t reinforce enough the importance of providing that sound and robust science to inform on potential authorization.

    “And it is possible, as you can see. There will be more authorizations in the future, but it’s important that we have that science to support those decisions. As I noted earlier, we also continue to fold in the nontobacco nicotine work into our broader portfolio around regulation. We did receive a million applications, which I don’t think anyone anticipated. I will say that we are making great numbers. We are 99.9 percent through with the review of those. I will say that 100 percent is very imminent.”

    King said that when it comes to products that are illegally on the market (having received a marketing authorization and are not currently under review by the CTP), the CTP is mindful of the importance in exercising all authorities that it has to ensure that people are complying with the law. He said that the FDA has given retailers the information they need to comply with the law through a list of authorized products (the 23 products that have been authorized for sale). The CTP also continues to ramp up efforts in terms of training, education and outreach across the supply chain, particularly to retailers.

    “We also continue to do surveillance inspection investigations. This is something that occurs on a daily basis. We have arrangements with all 50 states and territories to continue to do investigations. We have issued many warning letters for flavored disposable e-cigarettes, which we know are particularly popular for youth,” said King. “There’s been a variety of blitzes that have occurred monthly throughout the summer. I will say there are more to come. We are going to continue to conduct those blitzes and making sure that we are routinely monitoring, particularly with a focus on those products that we know have high youth appeal.

    “On balance, we are also continuing to do work around issuing import alerts. I was a little tickled by all the attention that the import alert on Elf Bar got. That’s nothing new, folks. We’ve been doing that for many years. It was suggested it was something seismographic, but we’ve been doing import alerts for quite some time. And we do use those as, again, another tool in our toolkit to make sure that we are addressing not only the products that are already in the country but preventing illegal products from entering the country.”

    As of Sept. 31, the FDA has issued over 1,200 warning letters for online investigations. For manufacturers, the CTP has sent more than 800 warning letters, with more than 750 letters for e-cigarettes. Beginning earlier this year, the FDA also issued the first civil money penalties against manufacturers for violations for illegal e-cigarette sales. He said civil money penalties will remain a part of the CTP’s tools to combat illicit sales.

    “We also issued the first six injunctions in coordination with the Department of Justice. I got a lot of flak for that as well about enlisting the Department of Justice. And I will remind folks that the FDA doesn’t have an independent litigation authority. If folks do not comply with the law, we will escalate further, as has been evidenced by these actions, which again are going to be part of our broader portfolio moving forward,” said King. “Everyone is going to be held accountable across the supply chain. We do want to make sure that we address the bad actors in a meaningful way. We also continue to pursue no tobacco sale orders among retailers as well. This has traditionally been issued for underage sales. But again, we’re committed to using the full scope of our authorities granted through Congress.”

    King added that education is also a priority for the CTP. The center is ramping up efforts to address misinformation in the continuum of risk for nicotine products. He mentioned that he recently wrote a commentary where he highlighted the importance of opportunities and considerations for addressing misperceptions in nicotine. “There is science that exists in that there are misperceptions around the continuum of risk and also nicotine. And so, we do have opportunities that are present, but we have to follow the data-driven pandemic-based approach,” he explained. “That said, I’m putting my money where my mouth is …. We’re working with the National Institutes of Health for a funding opportunity to get more data on public health communication messaging about the continuum of risk.

    “And as noted in that funding announcement, we’re looking for data both for the target population, which is called smokers, but also unintended populations, particularly youth. This is several million dollars on an annual basis, and we look forward to that kickstarting and getting data to inform our work.”

    King said the CTP will also continue to gather input from the industry and the public. The CTP is creating a new office within the Office of the Center Director and is looking to hire a new director for Policy and Partnerships. “That posting is public,” he said. “And I’m looking forward to seeing those who have applied and getting someone in that seat to meaningfully oversee the product regulation portfolio across the center, particularly as we get that strategic plan in place.”

    During the closing of his address, King said that he continues to be big on communication and stakeholder engagement. He expects to provide the industry with more opportunities for communication with the CTP. “I know that you’ll see in the future an evolution of our messaging. Both through our press releases, our social media and our [overall] messaging to make sure that we are clearer, simpler and more digestible,” he said. “I’ve been a bureaucrat for many years, but that doesn’t mean that I can’t communicate effectively with the general public. I think we can do better. I know we can do better.”

    Keynote: Hiroya Kumamaru

    Hiroya Kumamaru, vice director at Japan’s AOI Universal Hospital, gave a 15-minute overview of the current status of harm reduction in Japan.

    Quoting 2019 figures, Kumamaru said that, as in many other countries, smoking is the biggest cause of death in Japan, though high blood pressure is not far behind and is catching up, probably because of the aging of Japanese society.

    On top of this, he put forward the economic argument for reducing smoking, which, he said, while having a positive annual impact on the economy of ¥2.8 trillion ($18.76 billion), mainly through taxation, had a negative impact of ¥4.3 trillion mainly due to loss of labor because of smoking-related diseases, the medical costs associated with smokers and passive smokers, cleanups and fire-related expenses.

    Kumamaru told how, about 15 years ago, he had started working in a small clinic in the center of Tokyo, where he became involved in a national smoking cessation program that was based on a three-month-long series of five visits by smokers to doctors. Although a lot of effort was put into the program, and nearly 60 percent of the participants at his clinic went on to complete the five outpatient visits, nine months after the end of the program, nearly half of those who had appeared to have quit started smoking again, a result he described as “disappointing.”

    He then compared this with what had happened after the start of sales of heated-tobacco products (HTPs) from 2016. By 2019, almost one-third of male and one quarter of female tobacco consumers were using HTPs, a result that he described as “amazing.” As a result, total cigarette and HTP consumption was heading down while HTP consumption was increasing.

    In part, his amazement sprang from the fact that while this was happening in Japan, it appeared not to be happening at the same level elsewhere, and he didn’t know why this was the case. For example, Japan’s smoking rate was decreasing at a faster rate than that of Australia, which had introduced very strict smoking restrictions but banned the sales of HTPs.

    Notwithstanding Japan’s success with lowering smoking rates, many people in Japan remained skeptical about HTPs and raised issues about the unintended use of these products: dual usage, initiation, relapse and what is called in Japan the gateway effect of youth initiation. But these turned out not to be significant issues. Kumamaru said about 20 percent of smokers use HTPs and cigarettes, which is not that many. And initiation or re-initiation has been at a very low level, with two years of surveys recording a 2 percent factor in the first year and 1.3 percent in the second. In particular, youth initiation is low, and there has been no increase in initiation among younger people due to the launch of HTPs.

    Kumamaru said that interesting data from Italy, Korea and Japan pointed to the fact that consumers of HTPs have better outcomes than smokers in respect of chronic obstructive pulmonary disease and cardiovascular disease while the exposure to carcinogens associated with HTP use is just 3 percent of that of smoking.

    He ended his presentation by saying that Japan could look forward to a better future because of HTPs, though it is necessary to keep carrying out surveys and probably starting a long-term clinical study. 

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