Category: Print Edition

  • All in the Paper

    All in the Paper

    Photo: RTI

    Republic Technologies strengthens its lead in the world of RYO and MYO.

    By Stefanie Rossel

    While a niche compared to the global combustible cigarette market, the roll-your-own products category continues to grow steadily. Trouve360 Reports valued the global RYO products market at $8.72 billion in 2021 and projects it to reach $10.67 billion by 2028, reflecting a compound annual growth rate of 2.9 percent. The Covid-19 pandemic has boosted the sector, according to Santiago Sanchez, executive president of Republic Technologies International (RTI), a leading supplier of smoking accessories probably best known for its JOB, Zig-Zag and OCB rolling paper brands. “Sales increased a lot in 2020–2021 due to the stocking situation and increasing demand,” he says. “Some retailers overstocked. Now we have a kind of stabilization, which started early this year for our company. Sales have stabilized at a higher level than before Covid.”

    The RYO category also benefits from its unique position in the tobacco industry. “If you look at the U.K., for example, where vaping has become very popular, you will notice that the RYO market has not been shrinking because of people switching to vape products,” says Sanchez. “Whilst we have lost some customers to vaping, we have won new customers who have downtraded from highly taxed factory-made cigarettes.”

    Due to continuing tax increases for cigarettes, Sanchez expects more smokers to switch to more affordable RYO and make-your-own products. Production planning, however, has become more difficult for his company: “Currently, the situation is very dynamic due to inflation and the energy crisis following the Russian war against Ukraine and due to stockpiling; you don’t know what will happen tomorrow,” says Sanchez.

    RTI boasts the largest paper booklet factory in the world. It is located at the company’s headquarters in Perpignan in the south of France and has an output of 1.2 billion booklets annually.

    The company is also present in Barcelona, Spain, where it moved to a new, larger site last year. Here, RTI manufactures filter tubes for Spain, Portugal, France and Italy. With its two tube maker machines, the factory has a capacity of 4 billion tubes a year. With five filter maker machines, the plant also supplies 15 billion filters as a base for the tubes as well as for sale as bagged filters.

    With Austria-based Altesse, RTI has a third production facility in Europe that manufactures tubes and filters for Central Europe; Germany is the main market for tubes in Europe. Top Tubes in Montreal, Canada, supplies the North American market with filter tubes. A plant in North Carolina produces RYO and MYO products as well as pipe tobaccos for the United States, where the RTI operates under the name Republic Brands. Furthermore, five distribution companies in the U.S., Canada, France, the U.K. and Germany are affiliated with RTI.

    Controlled Process

    Santiago Sanchez

    The company sells to 110 countries worldwide and is vertically integrated. Most of the paper it processes is produced by its sister company Papeteries du Leman, which is associated with the privately held Republic Technologies Group. “From cigarette paper to the final product, everything comes from one company,” Sanchez emphasizes. “We also have close ties with the people growing the plants for the raw materials of our products, for example the farmers in Champagne who grow hemp for our hemp papers.”

    RTI has total control of the process, according to Sanchez. To help reduce greenhouse gases, the company tries to source its materials locally as much as possible. “Except for the Arabic gum that is imported from Africa and the bamboo that we source from China, all raw materials and machinery come from within 500 km of our Perpignan site,” says Sanchez.

    Operating in a comparatively small segment of the tobacco industry, RTI does not have available as vast of an array of ready-made manufacturing equipment as the large cigarette companies do. Instead, the smoking accessories supplier has an R&D department with a team of engineers and technicians who design all machinery, which is then custom built. Maximized automation and flexibility are key requirements of the equipment as RTI produces many different paper specifications based not only on cellulose but also on textile fibers such as hemp, flax, bamboo and rice. Traceability is another consideration. Each bobbin is marked with a matrix code so that the paper can be traced back to the machine and even the canal on which it was manufactured. As one measure to protect its products from being counterfeited, RTI embosses its papers with watermarks.

    Counterfeiting is a big issue in the RYO category, according to Sanchez, who observes this threat especially for RTI’s OCB brand, with fakes coming mostly from China. The company says it relentlessly pursues counterfeiters. In March this year, it won a significant legal victory in the U.S. when a jury found that a Georgia-based wholesaler had willfully sold and distributed counterfeit rolling paper products under Republic Brands’ TOP and JOB trademarks. Republic Brands and its affiliates were awarded $11 million in damages from the counterfeiting wholesaler and its owner.

    R&D is Key

    At its headquarters, RTI has a dedicated laboratory that checks the ingredients and raw materials of the company’s products for regulatory compliance. It also analyzes competitors’ products and fake versions of its own trademarks. The lab is equipped to measure all paper characteristics, such as opacity, tensile strength, porosity or thickness.

    R&D is a must for RTI because of legislation, the move toward more environmentally friendly production and other factors, says Sanchez. “Regulation makes work highly complicated. Being delivered to 110 markets, our products have to comply with all the different regulations, health warnings and even plain packaging requirements, as is the case in Israel,” he says.

    RTI’s lab also provides vaping machines and related testing equipment. The company diversified into the vape category in 2014 and has since been selling e-liquids under the E-CG brand. In October 2020, the company acquired French liquid manufacturer Innovative – So Good to expand the scope of its business. Today, RTI is one of the leaders in the French vape market, where its liquids are exclusively sold through tobacconists. All liquids are created at the Perpignan site.

    One of the advantages of rolling papers is that they can be made with naturally occurring fibers and without calcium carbonate and citrate as combustion additives, as is the case with factory-made cigarettes.

    In June 2019, the EU Single-Use Plastics Directive entered into force. Since then, all tobacco products with filters and filters marketed for use in combination with tobacco products in the common market must carry a label that states that the products contain plastic.

    Presently, the RTI’s R&D team develops many products that are more environmentally friendly. RTI has launched a line of biodegradable filters that are made with paper. Touch and filter properties are virtually the same as those of cellulose acetate (CA) filters, explains Sanchez. “It’s the result of a two-year development,” he says. “Technically, it replicates CA. Tests have shown that smoking experience is the same, and from a physical point of view, pressure drop equals that in a CA filter. We are the only ones offering this kind of biodegradable filter for RYO. The paper is the key; it is made from cellulose and viscose. Only few paper manufacturers are capable of producing this.”

    RTI also markets its biodegradable filters in some of its tube products. Environmentally friendly filters today account for 20 percent of the company’s turnover from filters.

    New Base Materials

    Regarding rolling papers, the company has a wide range of products in its portfolio. RTI claims to be the only company selling cigarette papers that contain real rice fibers. “Rice fibers are quite fragile; they tend to break too often on high-speed machines,” says Sanchez. “So many manufacturers stopped making it. We developed a rice paper in 2021 with a mixed blend consisting of 50 percent rice and 50 percent hemp and adopted our manufacturing process to handle the product.” Rice paper is one of the original cigarette paper types; it burns more evenly and reportedly gives more of a natural taste, so many consumers still want it. The rice that RTI processes in its paper comes from the French Camargue region.

    In 2021, RTI also introduced Roor rolling papers with CBD-infused gum, which are distributed in markets where CBD is legal, such as the U.K. and Germany. “Due to Covid, the product has been launched only recently, but it’s doing particularly well in Germany. We also offer variants with rice, organic hemp and unbleached papers,” says Sanchez.

    OCB Bamboo is another newcomer from RTI. “We have developed a full range of bamboo papers, which we are now planning to sell worldwide,” Sanchez says. “OCB Bamboo has been a big success in the U.S. Bamboo is good for the environment; it grows fast and needs no fertilizers. We are trying to find an alternative source to China, for instance, in the Philippines.”

    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.
  • Tools Of The Trade

    Tools Of The Trade

    Photo: JTI

    At a summer event in London, JTI showcases some of the devices that may help England achieve its smoke-free ambitions.

    By George Gay

    In his U.K. government-commissioned review, “Making Smoking Obsolete” [in England], Javed Khan said he had seen no evidence of a plan by industry to move toward meeting the ultimatum “for industry to make smoking obsolete,” which was included in the government’s 2019 prevention green paper. I’m not certain what is meant by “industry” here, but assuming it means partly or exclusively the tobacco industry, and perhaps the nicotine industry, this statement seems extraordinary. After all, one of Khan’s reviews, “Critical Interventions,” recommends promoting as effective tools to encourage smokers to quit their habit some of the products that, for well over a decade, the tobacco and nicotine industries have been developing, making available and promoting insofar as they have been allowed to do so.

    The independent e-cigarette industry has arisen almost solely for the purpose of converting as many smokers to vapers as possible—to making smoking obsolete, if you like. That is its raison d’etre. Of course, a purist might complain that individual vaping industry firms also want to make a profit, but making a reasonable profit provides funding for new developments and, more generally, makes the world go round.

    So perhaps the government’s ultimatum was aimed only at the tobacco industry. But even in this case, it seems somewhat uncharitable not to give recognition to the enormous investments and efforts that have been made by tobacco companies in developing what I am comfortable calling lower risk products and, especially, in the scientific validation of their products’ lower risk credentials. And this is not to mention that, as far as I am aware, it was individual tobacco companies that first started to apply the concept of “harm reduction” to tobacco/nicotine consumption and that, in the U.K., first suggested setting a target date for ending smoking: 2027.

    If my memory serves me correctly, the emergence of the tobacco harm reduction principle predated the arrival of vaping products and was based on snus, a product that is without doubt one of the least risky tobacco products of all but one that, inexplicably, was and is banned in the U.K. and one that Khan believes should remain banned. And it is worth mentioning that the country might conceivably have been well on the way to meeting the 2027 target if the government had been more ambitious and reacted more positively in 2017, when the target was suggested, largely based on the use of heated-tobacco products (HTPs). Certainly, I think the U.K. would have been in a better place if e-cigarette companies had been allowed to advertise the consumption of their vaping products as being 95 percent less risky than the consumption of combustible cigarettes, a figure that, to its credit, the government had long accepted.

    Coincidentally, a range of U.K.-market, lower risk products was on display during Japan Tobacco International U.K.’s summer event held at the Mandarin Oriental Hotel in London on July 13, one of which was launched in 2019 and another of which was launched in 2020—so, in line with the government’s ultimatum, though not necessarily in response to it. There were three products in all—a vaping device, an HTP and a nicotine pouch—so, at the very least, JTI U.K. must be given credit for having made a huge effort, if not toward making smoking obsolete per se but toward providing as far as it can the tools and encouragement for smokers to switch to less harmful products. It is, after all, beyond the power of a single company to “make” smoking obsolete; only the government has the power to come close to doing that and, no doubt for good reasons, it has chosen not to do so.

    The summer event, dubbed “Innovating for Tomorrow,” was attended by about 300 people, including those representing trade and retail partners, community investment partners, agencies, think tanks and the media. About 20 politicians from across the political spectrum were also scheduled to attend, though whether they all tore themselves away from the Conservative Party’s leadership hustings in Westminster I don’t know. Given this attendance and an abundance of fine drinks and delicious food, it is not surprising that the evening was devoted, aside from two short speeches—by Charlie Cunningham-Reid, U.K. corporate affairs and communications vice president for JTI U.K., and Gemma Bateson, U.K. sales director—to relaxed discussions around and away from the product displays. On what was for England a hot day, the venue, with its two large, airy rooms and pleasant garden overlooking Hyde Park, lent itself to such discussions.

    One of the products on display was Logic Compact (more information on the products displayed is available at www.jti.com/europe/united-kingdom), a closed-tank e-cigarette that is used with pods of e-liquid available in a range of flavors. At the display stand for these products, much was made of the high level of testing that was carried out on the devices and e-liquids. And, interestingly, a figure from the Office of National Statistics that was on display had it that about 3.3 million people in the U.K. used e-cigarettes, which was something of a testament to the effort that had been made by the vaping and tobacco industries to deliver smoking obsolescence.

    The most recent JTI U.K. reduced-risk product to be made available on the U.K. market and that was on display at the summer event was Ploom, an HTP launched in 2020. Ploom is said to offer an authentic smokeless tobacco experience delivered through the action of an innovative heating technology that causes no combustion and no burning and therefore produces no smoke or tar. Consumers have already embraced e-cigarettes, and the government has largely accepted them, so JTI U.K. will be hoping to see the same level of acceptance for HTPs. These products are certainly likely to appeal to consumers on price, especially those used to paying around £9 ($10.77) for a pack of cigarettes. After an initial outlay of about £45 on a device, consumers pay about £4.50 for a pack of 20 EVO tobacco sticks, which come in a range of flavors and strengths.

    Meanwhile, JTI U.K.’s Nordic Spirit nicotine pouches, which were launched in the U.K. in 2019 and are available in a range of flavors and strengths, are said to comprise a discreet product that can be used at any time since, on consumption, they produce no smoke or vapor and contain no tobacco. Here is a product, I think, that indicates the length JTI U.K. has gone to cut the use of combustible products. When it launched Nordic Spirit, the company could have had little idea how the product was going to be received because there was little knowledge about such products among U.K. consumers, who, after all, had not been allowed to buy snus, a cousin of the nicotine pouch. Surprisingly, perhaps, but encouragingly, participants at the London event were told that sales growth had been good, which is perhaps an indication of the importance of choice in offering alternative products to smokers, who too often are treated as if they comprised one homogeneous group with one set of likes and aspirations.

    The news about the growing interest in nicotine pouches must be good, too, for the environment. This is a pared-back product that must have a low negative impact on the environment, a feature that we are all discovering is hugely important. I have to say, too, that during conversations around the display stands, I heard of the initiatives being undertaken by JTI U.K. to ensure that when alternative devices are no longer operable, they are disposed of properly. There is probably some way to go in regard to this, but you have to say that these efforts are likely to be some way ahead of those of the government. As I am writing this piece, of the five people still standing for the leadership of the Conservative Party and therefore to become the next prime minister, only one was unequivocally backing the government’s net-zero emissions by 2050 target.

    It’s worth noting that a small pamphlet, “JTI U.K. at a Glance,” that was made available to participants at the summer event indicated that JTI is still committed, throughout its global operations, to net-zero greenhouse gas emissions by 2050.

    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.
  • Making a Splash

    Making a Splash

    Photo: NewCo

    A small water filter and a biodegradable sample bag may help reduce the environmental impact of tobacco production.

    By George Gay

    The U.N. Biodiversity Conference is due, Dec. 5–17, in Montreal, Canada, to convene governments from around the world to agree to a new set of goals for nature, according to the Secretariat of the Convention on Biodiversity. That is the good news, I guess. The bad news is that, in a note posted June 21 on the U.N. Environment Program website, the secretariat said that despite ongoing efforts, biodiversity was deteriorating worldwide and that this decline was projected to worsen with “business-as-usual scenarios.”

    One of the concerns I have is that we seem to be piling one existential crisis on top of another. A decline in biodiversity feeds climate change and environmental damage, and climate change and environmental damage feed a decline in biodiversity. And because of this seemingly catastrophic loop, I find it’s easy to become overwhelmed by a feeling of helplessness. But there is another way of looking at things. Firstly, we can admit that we are faced with an existential crisis, and secondly, we can respond positively in any and every way possible. And, luckily, there are some seemingly modest interventions that step out of the shadow of business as usual and punch above their weight.

    The idea that, in attempting to tackle the environmental crisis, we needed to look beyond the obvious, major interventions was suggested to me recently by Rainer Busch, the managing director of the tobacco dealer NewCo, in response to something I had written about deforestation being caused by tobacco farmers using wood fuel for curing tobacco. While accepting that such deforestation was a problem, he pointed out that a bigger problem was caused by the need for farmers and their families—along with many other people in less developed countries—to burn wood for other reasons, including the need to boil otherwise nonpotable water.

    Starting Small

    Fortunately, this domestic problem, while bigger, is potentially easier to address and is starting to be addressed in a modest way through a newly incorporated company, NewCo Pro, which was set up to focus on business opportunities that embrace positive socioeconomic initiatives outside the tobacco industry, though mostly connected with it. And one of NewCo Pro’s first initiatives has seen it partner with Sydney 905, a South Africa-based company that offers water filters.

    Jose Maria Costa, the senior executive advisor at NewCo Pro, who first came across these filters, is passionate about their potential to improve the lot of people who do not have easy access to potable water. Costa, who has lived in and visited many less developed countries, told me that, notwithstanding his experience, he was horrified when he started to investigate how, in the 21st century, millions of people lived without ready access to acceptable water. It seemed impossible that so many people still lived in this way, he said.

    There are a lot of water filters on the market, but Costa reckons the Sydney 905, for which NewCo Pro is the worldwide sales agent, is ideal. And it is hard to disagree. This is a robust, easy-to-use, versatile unit that is small enough to be carried in a largish pocket but with capacity enough to serve a family. It is mainly intended to be fitted to the outlet tap of a container of collected river, well or rainwater, and, using a simple gravity feed, turn about 30–35 liters of murky-looking contaminated water crystal-clear and safe each hour while retaining naturally occurring, safe minerals. But it can also be used to process mains water, where such is available, or it can be attached to a plastic bottle of water taken from a river, in which case the drinker supplies the necessary pressure simply by squeezing the bottle. It uses neither chemicals nor batteries.

    As well as the Sydney 905 Filter, which uses a 0.1 micron hollow-fiber membrane that Costa expects to attract most interest, there is the Sydney 905 Purifier, which uses a 0.01 micron membrane and is therefore suitable only where mains pressure is available. The exact specifications of the two units are fully explained at www.newco-pro.com, which also provides the results of water purity tests undertaken by various official certification bodies along with some informative and entertaining videos.

    Return on Investment

    One of the most compelling things about the Sydney 905 filter has to be its value. While, at about $40 a unit, it would not be cheap for a financially impoverished family, there is no need to change the filter, so the unit could last for very many years without incurring any maintenance costs as long as it is regularly and conscientiously cleaned using a simple backwashing process. And while the initial outlay is not insubstantial, the payback is rapid and ongoing. One Kenyan farmer who wrote to Costa said that by using the filter, his family of 10 was saving about $60 a month because it no longer had to buy bottled water. Additionally, another savings, in costs and health, was being enjoyed because the farmer and his family were no longer losing work and school days to sickness caused by water pollution.

    It is surely not beyond the bounds of possibility that these filters could be provided free of charge by major companies working closely with tobacco and other farmers or that at least these companies could provide interest-free loans to help such farmers buy them. After all, as Busch pointed out, the use of these filters can help in the fight against deforestation, and as Costa added, most tobacco companies have committed to the U.N.’s Strategic Development Goals, No.6 of which aims to provide everybody with clean water by 2030.

    Things are moving. Costa said that NewCo Pro believed it was close to an agreement to start production of the filters in India, for the Indian market, and that the company had been in contact with large nongovernmental organizations, local governments and tobacco companies around the world. But progress is not what it should be, given the personal and population-wide problems caused by the lack of potable water and given that the Sydney 905 solution to the problem seems so simple but powerful. Achieving goal No.6 is going to require all hands to the pump and a willingness to step out of the shadow of business as usual since, according to the NewCo Pro website, in 2022, 844 million people lack basic water services, 2.2 billion people lack safely managed drinking water, and 3.5 million people die each year from causes linked to unsafe water.

    Biodegradable Bags

    Meanwhile, there is a certain irony in NewCo Pro promoting the distribution of these filters because they are made of plastic, and another NewCo project is aimed at reducing the use of plastics. But there is a clear difference here. The filter units are meant to last many years whereas the plastic NewCo is trying to eliminate is single use, such as that used for wrapping leaf tobacco samples.

    Busch has been working on this project for about three or four years now, since before the formation of NewCo Pro. He started by replacing the plastic sample bags with reusable cotton bags, but while these were popular with customers up to a point, they had the disadvantages that they weren’t transparent and that they weren’t as good as plastic at retaining moisture.

    What NewCo Pro is now offering is a transparent bag made from potato starch. These EU-certified and Germany-certified food grade bags are 100 percent biodegradable so that while, theoretically, they have an unlimited life under normal circumstances, they break down into compost that can be used as fertilizer within 90 days to 150 days of their coming into contact with an environment open to the elements. Busch said that farmers in Italy and Spain are already using seedbeds made from the product, which is ideal for such use and better than commercially available fertilizers, a seemingly critical factor at a time of soaring fertilizer prices.

    But there is a catch. While the people on the ground who Costa talks with are enthusiastic about this biodegradable product, the message apparently is not getting back to the people who make the decisions, or those people are stuck in business-as-usual mode and are not making the decision to change from plastic to potato starch. If it is a lack of decision-making, this seems incredibly short-sighted, especially given the huge problems being caused by plastic waste and given that switching to the new type of bags would allow companies to improve the services they offer and be seen to improve those services while incurring only an immaterial increase in costs. There seems to be no reason why companies could not make the switch immediately. After all, if a relatively small leaf dealer such as NewCo can research this matter and make the change, surely others, with the research having been carried out for them, could make the switch also.

    Undaunted, NewCo Pro is already researching the use of potato starch for applications that go beyond sample bags—applications such as replacing the polyliners used for packing certain lots of tobacco for particular customers or replacing the plastic polypots used in the production side of the industry. And it is willing to put companies wishing to follow its lead in touch with the suppliers of such materials. When it comes to plastics, the message from Busch and Costa is “enough is enough.”

    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.
  • Smart Sachets

    Smart Sachets

    Photos: Amplicon

    Amplicon presents the first pouch with controlled nicotine release.

    By Stefanie Rossel

    All nicotine pouch brands presently on the market use a form of cellulose as a carrier material. Powdered cellulose is drenched in a mixture of pharmaceutical grade nicotine, flavors and a pH alignment to bring the product’s pH to the optimum level for nicotine uptake. Although the blend is moistened with polyglycol or glycerol, the pouches are slightly dry. This leads to the user feeling the nicotine effect and perceiving the taste within a few seconds after placing a pouch behind the lip. For some users, the sudden intense nicotine hit is too much—they react physically; sometimes they even get sick. Cellulose has another downside: During consumption, it may dissolve into a slimy lump in the consumer’s mouth, thereby quickly losing its flavor.

    Release of pouch nicotine is controlled mainly by the solubility of the nicotine, which means the size of the pouches also determines the release profile. In nontraditional snus markets, users prefer small pouches. These, however, release nicotine and flavor in a very short time.

    Hakan Engqvist

    A Swedish consumer products company set out to solve these issues. In June, Amplicon presented its Freee nicotine pouches, which it describes as the next generation of oral nicotine. While from the outside the pouches look like those already on the market, they are filled with a powder made of bioceramics. Under the microscope, bioceramic granules look like Swiss cheese, having a porous inner structure. The bioceramics used for the pouches belong to a family of chemically bonded ceramics. The substances can be found in nature. For example, hydroxyapatite, a bioceramic generated in the body by biomineralization, forms the basis of the hard matter of all mammals. For the past 40 years, bioceramics have been used clinically for hard tissue replacement.

    Amplicon’s Freee bioceramic platform also contains water, bulk and the active ingredients nicotine and flavor, which bind to that platform. Substance release takes place through diffusion and dissolution. This allows for a more constant, controlled release of nicotine and flavor and better absorption by the human body. The company uses nicotine salt in its pouches. Water-soluble flavors integrate best with the material, but oil-based flavors can be used as well.

    The technology allows manufacturers to produce pouches that are small but pack the punch of much larger products, says Amplicon founder Hakan Engqvist, who is also a professor in materials science at Uppsala University. “Our technology enables customized nicotine-delivery and a much-improved nicotine and flavor experience, and it allows for pH stability over time. It also maintains the consistency of the pouch better. Feedback from consumer tests has been positive.”

    Current pouch products, he explains, also have an issue with shelf life because their pH levels are less stable than they are in bioceramics.

    Tomas Hammargren

    Intelligence Inside

    The new pouch technology stems from pharmaceutical research. “We have been and are still working on an opioid-based pain relief formulation,” says Engqvist. “Through different routes, we started to work with solid vape to load nicotine into the ceramics and thereby reduce the use of e-liquid and instead just have a tablet. Controlled release of nicotine from pouches then became the next development, quite natural in a snus country such as Sweden.”

    Engqvist has lots of experience with bioceramics. Amplicon’s parent company, Emplicure, which he also co-founded, combines biomaterials with existing pharmaceutical substances to deliver drugs precisely and safely. Its controlled-release technology targets unmet medical needs, especially in opioid-based pain relief where its formulations offer not only improved therapy with less discomfort but also reduce the risk of opioid abuse, according to the company.

    Its patented bioceramic platforms are based on tunable nanostructures that enable the distribution of active substances in bioceramic materials. The active substance is then released to achieve the desired effect by controlled diffusion. The release and dosage of the active substances can be tuned by adjusting the size of the pores, the choice of biomaterial and the excipients.

    Amplicon was established to leverage Emplicure’s technology in the nicotine market. In June, the company filed for a trademark registration for Freee nicotine pouches at the European Intellectual Property Office. The company presently manufactures the pouches in-house at pilot scale but says it is able to scale up production from laboratory volumes to commercial volumes. Control over the making of the ceramic powder will stay with Amplicon, which has received a lot of interest in its technology from both established distributors and pouch manufacturers, says Tomas Hammargren, chairman of Amplicon.

    The product is scheduled to hit the market by mid-2023. Initial target markets will include both new, “non-pouch” geographies, such as Europe, Japan and Korea, and existing pouch markets, according to Hammargren. “To reach all important markets, such as Southern Europe or Asia, a pouch product needs to be as small as possible but has to provide a good nicotine and flavor hit, which is difficult to achieve with cellulose,” he says. “It’s hard to imagine an Italian woman putting a big pouch under her lip. The same is true for Asia. Our product is more urban, metropolitan and attractive to female and new users, hence we are confident that it will also be successful in existing oral nicotine markets. It will be the perfect complement for vapers and users of heated-tobacco products in places where smoking and vaping is banned.”

    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.
  • Staying the Course

    Staying the Course

    Photos: KT&G

    KT&G continues to make progress toward its ambition of becoming a top-tier global player.

    By Stefanie Rossel

    It’s an ambitious goal: By 2025, South Korea’s leading cigarette manufacturer, KT&G, wants to play in the top tier of global tobacco companies. At the time of writing, the company appeared to be well on track to achieve its ambition, weathering unprecedented macroeconomic challenges along the way.

    In the first quarter of 2022, KT&G’s sales soared to krw1.4 trillion ($1.11 billion), an increase of 16.1 percent over the same period in 2021. Operating profit stood at krw333 billion, up 6.3 percent year-on-year. The double-digit growth in sales was driven by strong exports and the performance of KT&G’s overseas cigarette subsidiaries as the company concentrated on the global business arena.

    KT&G sold 11.5 billion cigarettes overseas in the first quarter of 2022, a 43.8 percent increase over the same quarter last year. “Amid an easing pandemic situation, demand for cigarettes has increased in the Middle East, Asia-Pacific and Indonesia,” a KT&G spokesperson told Tobacco Reporter. “Total overseas sales—krw226.3 billion—were up 62.6 percent compared to the same quarter last year. The dramatic increase can be explained by the volume increases in high average selling price regions, such as [the] Middle East and Asia-Pacific.”

    Covid-19 brought about significant challenges for KT&G. In response, many parts of the company, from daily operations to engagement with business partners, underwent major changes.

    One of the most difficult challenges, according to KT&G, was to expand its global business amid a pandemic. Despite the situation, the company added 23 new export markets in 2020 alone—a remarkable accomplishment given that many countries imposed nationwide lockdowns during that year. Since face-to-face meetings with overseas business partners and physical market visits were impossible, the company had to strengthen its digital and online business model. It conducted rigorous market research on target markets and communicated with overseas business partners by utilizing digital platforms. KT&G even managed to establish a subsidiary in Taiwan in March 2021.

    After experiencing the pandemic in 2020, KT&G set “resilience” as the keyword for its 2021 business management goal. “The keyword ‘resilience’ reflects our determination to not only recover from the negative impacts of Covid-19 but also leap forward and achieve greater advance amid the pandemic situation,” said KT&G’s spokesperson. “During last year, we tried to act fast and seize opportunities in the rapidly changing global economic order.”

    KT&G’s ambitions to become a global top tier player are spearheaded by CEO Baek Bok-in.

    Strong Growth in Indonesia

    KT&G’s long-term strategy to become the fourth-largest player in the global tobacco industry is comprehensive: Next to driving business diversification and maximizing both financial and nonfinancial values, the company intends to bolster marketing capabilities by channeling more investments into distribution networks as well as the marketing infrastructure in key markets, especially in its overseas subsidiaries in Indonesia, Russia and Turkey.

    The plan appears to be working out for most of its overseas operations; growth in the first quarter of 2022 came mainly from KT&G Indonesia, the country’s sixth-largest independent kretek manufacturer, previously known as Trisakti. KT&G acquired Trisakti in 2011, thereby benefitting from the kretek manufacturer’s well-established sales network.

    Indonesia holds great significance for KT&G, considering its market size. To increase its presence in Indonesia, KT&G is developing its brand portfolio to better satisfy local consumers’ needs while at the same time investing in the marketing and sales infrastructure.

    The U.S. turned out to be a different story, however: Instead of expanding its distribution channels as envisaged, KT&G in December 2021 announced the suspension of its U.S. business, located in Fort Worth, Texas, for an unspecified period. KT&G says it is reviewing its U.S. business amid intensifying regulations and growing competition.

    According to the Korea Herald, the decision will cost the company about krw205.8 billion in lost sales, representing around 3.9 percent of KT&G’s overall sales revenue in 2021. Furthermore, the newspaper reported, mandatory tobacco escrow accounts for smoking-related legal settlements had added burdens to the already difficult business environment. A KT&G spokesperson told Tobacco Reporter that the company will offset the lost U.S. business by focusing on growth in new markets and other overseas subsidiaries.

    In early 2020, KT&G and PMI entered into a three-year supply and distribution contract to commercialize KT&G’s Lil products outside of Korea.

    New Lil Variant Introduced

    Unlike international competitors who have suspended or discontinued their operations in Russia after that country’s invasion of Ukraine, KT&G continues to operate its cigarette manufacturing plant in the Kaluga region, located about 150 km southwest of Moscow. The site has an annual production capacity of 4.8 billion cigarettes. Among other products, it manufactures KT&G’s leading Esse brand. According to KT&G, the war has had only a limited impact on its Russian operations because the factory is geographically far removed from Ukraine. KT&G said it was keeping a close eye on the situation to ensure that local business operation and employee safety are not compromised.

    The company is not present with its brands in Ukraine but markets its heated-tobacco product (HTP) Lil in the country through a partnership with Philip Morris International.

    In early 2020, KT&G and PMI entered into a three-year supply and distribution contract to commercialize KT&G’s Lil products outside of Korea. Lil first launched in Russia, Ukraine and Japan—in the same year the agreement was signed. A year later, the product was commercialized in 10 more international markets. Today, the product is present in 25 markets. KT&G says it is strengthening its R&D and device technology in order to satisfy various needs of global consumers. Since 2017, it has filed over 3,000 patents related to heat-not-burn technology. With the commercialization of Lil in Europe, KT&G has stepped up its patent filings on the Old Continent as well. Last year alone, the company filed 233 patents in Europe.

    One of the results of the company’s R&D efforts is Lil Hybrid EZ, which debuted in South Korea in May. Lil Hybrid EZ shares the same platform with the original Lil Hybrid. Just like the original Lil Hybrid, it features a “Smart On” system, which instantly starts heating the stick as it is inserted. The differentiator is price: Lil Hybrid EZ is offered at a more affordable price point without compromising the quality, according to KT&G.

    KT&G’s Lil heat-not-burn product is currently available in 25 markets.

    Increasing Domestic Share

    Despite challenging times, KT&G has managed to expand into many new markets. In 2019, the company’s products were present in around 80 countries. In 2020—after the outbreak of the coronavirus—KT&G’s geographic footprint grew to cover 103 markets, many of them in Europe and Africa. Today, KT&G is present in more than 120 countries. But the company insists it is not merely looking to increase the number of export destinations. Rather, KT&G is invested in expanding sales coverage and elevating market presence in each market in a qualitative manner, according to a company spokesperson.

    KT&G has also managed to strengthen its domestic leadership by expanding its brand portfolio of low-tar/low-nicotine and “smell-down” products. South Korea’s market for combustible cigarettes declined by 2.7 percent in the first quarter of 2022 compared to the same period last year due to a shift in consumer demand toward HTPs. Despite this, the company managed to grow its market share by 1.2 percent to 65.7 percent.

    Amid intensifying competition in the market, KT&G says it strives to maintain its leadership position and competitiveness in the domestic market by improving its products’ quality and developing a brand portfolio that aligns with market trends. It is continuously adding new low-tar and low-nicotine, “smell-down” and super-slim variants to its main brands, Esse, Raison and Bohem.

    The “smell-down” segment is typical of South Korea. KT&G has developed various technologies, such as the cigarette breath reduction technology and a “finger zone” on the tobacco rod that reduces cigarette smell on fingers. Most of the newly launched combustible products produced by KT&G and other cigarette manufacturers in Korea come with such smell-down features. The potential of such technologies overseas will depend on the regulatory and competitive environments of the target markets, according to KT&G.

    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.
  • Craving Normalcy

    Craving Normalcy

    Photos: Taco Tuinstra

    Climate change, war and a lingering pandemic exacerbate the typical challenges presented by leaf tobacco supply and demand.

    By George Gay

    I have a question. Given the environmental crisis the world faces, why are the tobacco industry’s operations dominated by flue-cured tobacco varieties rather than sun-cured varieties? I mean, why cut down trees and burn them as part of the flue-curing process when it is possible to rely on the energy freely and directly available from the sun to cure tobacco? It cannot be a quality thing because whereas, for example, sun-cured classical oriental tobaccos are sublimely aromatic, flue-cured Virginia tobaccos are unremarkable at best.

    Another argument that cannot be made is that the industry was not aware of the deforestation it was causing by flue-curing tobacco and therefore hasn’t had time to switch from flue-cured to sun-cured tobaccos. The issue of tobacco-driven deforestation was being widely discussed in the early 1980s and probably before that. Of course, not all flue-curing relies on burning wood, but that which doesn’t, as far as I am aware, requires, directly or indirectly, burning fossil fuels.

    So what is the answer to the question posed above? I think there are probably very many answers, none of them particularly convincing, so I believe that even now efforts should be made to switch production from flue-cured varieties to sun-cured and, perhaps, air-cured varieties. And maybe this will happen, partly because of the growing alignment of environmental and health activists and arguments.

    A recent report by the World Health Organization and Stopping Tobacco Organizations and Products (STOP), Talking trash: Behind the tobacco industry’s ‘green’ public relations, accuses the industry, mainly in the guise of the four major multinationals, of “greenwashing.” And though some of the report is lightweight and unconvincing, its uncomplicated messages are likely to register with a nonindustry audience. “Tobacco growing and curing are also both direct causes of deforestation,” the report says in part.

    In addition, according to Natalia Pujalte writing in May in The Parliament Magazine, the EU presented in November a proposal for new regulations that would allow “only deforestation-free and legal products” to be sold on the EU market. Tobacco wasn’t mentioned in Pujalte’s piece, but with the regulations still under consideration and the EU’s aversion to all things tobacco, it is unlikely the industry will slip through the net.

    The developed world is currently facing levels of inflation not seen in decades, so the entire supply chain has been suffering cost increases that are difficult to offset.

    Pressing Challenges

    I suspect that 99 percent of those working in the tobacco industry will disagree with my suggestion and come up with all sorts of reasons why sun-cured and air-cured tobaccos cannot be used as the main ingredients in cigarettes, at least in part because they have other things on their minds. According to a number of respondents to a Tobacco Reporter questionnaire, the leaf industry is suffering from the effects of everything from climate change to the war in Ukraine and long Covid.

    Jose Maria Costa

    Although Jose Maria Costa of NewCo said leaf tobacco demand from a wide range of customers was holding up well, he positioned a range of industry problems within that affecting just about every business and individual globally. The world had been through 15 difficult years since the financial crisis of 2007–2008, he said. And more recently, the war in Ukraine had been launched before economies around the world had a chance to recover from the impact of the Covid pandemic. The developed world was currently facing levels of inflation not seen in decades, so the entire supply chain was suffering cost increases that were very difficult to offset. Logistical challenges that had been evident for a year were adding to the problems, with prices for a container quadrupling for certain routes. At the same time, there were smaller-than-desirable tobacco crops in key markets such as Brazil, and prices were going through the roof in all markets.

    And whereas the tobacco industry had been through a lot of changes and cycles over the years, things were different now, Costa said, implying, I think, that there were now more, worse problems that were proving harder to overcome. The world needed a period of stability, and the tobacco industry did too, throughout its supply chain, he said.

    Craving Consistency

    Meanwhile, Christian Adi Njoto Njoo, the president of Mangli Djaya Raya, which for more than 60 years has produced, processed and traded tobacco from its base in Indonesia, told Tobacco Reporter that his current main concerns are focused on how to ensure production is sustainable in the face of anomalous weather patterns and how to address market inconsistencies. Addressing the challenges caused by climate change would need an elaborate plan devised and supported by a broad range of stakeholders, including governments, and would be a long-term project, he said. And in the meantime, recent prolonged rainy seasons in Indonesia were predicted by the Indonesian Agency for Meteorological, Climatological and Geophysics to continue through at least this year and next, which could mean shorter crops and prices rising to previously unheard of levels.

    On the other hand, market inconsistencies could be improved in the short term, Njoto said. They were caused by a lack of central planning that allowed a vicious season-by-season cycle of production boom and bust to develop as growers, who were not fully informed, reacted to the prices paid in the previous season, not necessarily to the needs of the current season. Some market inconsistencies, he added, could be improved through government regulation and by better and consistent planning by medium to large corporations when deciding on their purchasing, production and price indications for future seasons.

    One indirect result of the boom-and-bust cycle was volatility in the stocks and prices of fertilizers and crop protection agents, followed inevitably by higher production costs and pressure for tobacco price rises. The scarcity of fertilizers in recent times had seen their prices increase hugely to the point where the government was currently trying to control the sale of fertilizer on the domestic market and to limit and even ban its export.

    Around the world, leaf dealers are pondering how to ensure that production is sustainable in the face of anomalous weather patterns and how to address market inconsistencies.

    On the Bright Side

    The Tobacco Reporter questionnaire asked, basically, what is currently positive about the leaf tobacco industry, what is negative and what can be done to improve things.

    Njoto identified unhelpful regulations as being a problem for the industry, though he recognized that regulations were necessary in respect of protecting certain industry stakeholders, especially farmers and workers, and also the environment. In fact, he accepted that, in Indonesia, regulations were less strict and made more sense business-wise than those in some other countries and regions. It was also helpful that government-owned tobacco research facilities, laboratories and other institutions had been steadily improved in recent years through increased budget allocations drawn from various tobacco industry-related tax revenues. At the same time, government and private extension services, including the gradual implementation of sustainable tobacco programs required by the major multinationals, were aiding tobacco farmers, workers and other industry stakeholders.

    However, he said, it was concerning that “international regulations” were starting to be introduced, and introduced without enough consultation, which meant some were poorly received and adapted and therefore hindered the industry’s stability and development. This situation needed to be improved by ensuring a balance was struck between the health and economic interests of all stakeholders.

    Interestingly, ITC, India’s dominant tobacco manufacturer that has been closely linked to the success of the country’s flue-cured tobacco industry, mentioned no problems in its response to the questionnaire, preferring to concentrate on what it sees as the “world’s best public/private partnership model in agriculture,” namely, the Indian tobacco auction system, which was introduced in 1984.

    ITC made the point that while flue-cured tobacco occupied less than 0.10 percent of the country’s total arable land area, it was an important, sustainable commercial crop, generating enormous socioeconomic benefits in terms of agricultural employment, farm incomes, revenue generation and foreign exchange earnings. In part, this was down to the Tobacco Board’s e-auction system for this type, which provided for fair assessments of growers’ bales in respect of both weight and grading, healthy competition, fair prices and, importantly, prompt digital payments.

    Also accentuating the positive was Frederick de Cramer, a tobacco industry doyen now involved with the production of Latakia tobacco. In Turkey, opportunities were being created by a tobacco law instigated last year requiring cigarette manufacturers to include 10 percent locally grown Virginia in their blends, he said, a figure that was due to rise to 30 percent in four years. Local cut rag operations that bought domestically grown sun-cured Virginia (SCV) and flue-cured Virginia (FCV) were looking into the possibility of providing access to their leaf sources to cigarette manufacturers. But de Cramer pointed out, too, that, currently, there was a need to apply better agricultural practices to increase the quality of the SCV and FCV produced in Turkey for both the domestic and export markets. And there was a need, too, for a good big-leaf processing line.

    Turning to the issue of locally grown classical oriental tobacco, de Cramer said a reduction in demand for these varieties was causing concern for the long term. Multinational tobacco manufacturers had reduced their demand for these varieties for a number of reasons but mainly because of price/cost considerations. In recent months, though, the Turkish lira had devalued substantially against the dollar, and it was possible that demand for Turkish oriental tobacco could increase. But there is danger nevertheless, said de Cramer. While classical oriental tobacco had been and still was a vital component of high-quality American-blend cigarettes, multinational manufacturers were no longer supporting this traditional leaf as they had in the past. Demand had been reduced due to several factors, including the switch to nontraditional cigarettes such as e-cigarettes, lower oriental inclusion rates in traditional blends, even the removal of such tobaccos completely from some blends, and import duties in some countries imposing de facto import restrictions.

    Demand for classical oriental tobacco has declined due to the switch to nontraditional cigarettes such as e-cigarettes, lower oriental inclusion rates in traditional blends and import duties in some countries.
    (Photo: Tobacco Reporter archive)

    The Greek Outlook

    This partly mirrors what has been happening in Greece, where the future of the leaf tobacco industry is apparently under threat. I say “apparently” because industry experts in Greece are reluctant to say anything even though problems have been apparent since at least 2019. Little wonder perhaps. From what I can surmise, it seems possible that within three years to 10 years, Greece may no longer produce classical oriental tobacco—possibly no tobacco at all.

    Assuming this is correct, how did things reach such a pass? For many years, the Greek tobacco industry operated in a country that supported production. The industry had easy access to finance, good extension services and a lot of skilled growers who, in general, were paid fairly. It had good processing facilities, a stable customer base and well-established export systems.

    It is true that production levels were sometimes out of kilter with the market, but there were multiple reasons for this, not all of which were within the control of the Greek industry. And, in any case, production of classical varieties of oriental tobacco were cut back hugely in 2006 to 20,000 tons a year after the decoupling of EU crop-specific agricultural support, a move that seemed to stabilize the industry and align it more closely with the new market realities.

    Clearly, what is at the root of the problem is demand. Again, from what I can surmise, the classical oriental tobacco crop last year fell to 11,900 tons, the smallest crop of classical oriental tobacco ever in Greece, while next year’s production might or might not hit 10,000 tons. Why? One major factor is that Philip Morris International, which had, for a number of years post-decoupling, agreed to buy a significant proportion of Greece’s crop, pulled out of that agreement in 2019, partly, I guess, because of its commitment to switch its production away from traditional cigarettes to IQOS. Subsequently, its orders placed with Greek processors seem to have fallen to a fifth or even a tenth of what they were.

    Is there any way back for Greece? Possibly not. Even if demand started to pick up, the industry would have to attract a new generation of growers to tobacco, which, on current evidence, might prove difficult. But never say never. There are many unknowns currently affecting the tobacco industry, not the least of which concerns how successful heated-tobacco products and e-cigarettes will be in a world starting to concentrate on environmental issues. And the issue of filters cannot be ignored. Will they be banned eventually, which would make sense environmentally? And if they are banned, along with flavors, how do you make a decent cigarette? Well, one obvious way would be to use classical oriental tobacco.

    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.
  • Not “A Solved Problem”

    Not “A Solved Problem”

    Photo: nikodash

    Acknowledging reality at the E-Cigarette Summit

    By Cheryl K. Olson

    After weary years of disdainful comments and dismissive studies about nicotine, and especially vaping, from my public health colleagues, the recent 2022 E-Cigarette Summit in Washington, D.C., gave me cause for hope. It was energizing to see researchers, advocates and regulators sincerely attempt to share and discuss their varied findings and experiences rather than “preach to the choir” more evidence supporting preexisting beliefs.

    For example, Peter Hajek of Queen Mary University of London discussed nicotine’s effects on the developing brain. He threw cold water on assertions that nicotine can cut IQ by 10 or 15 points. These claims, he said, come primarily from chronic large doses, close to a lethal dose, in animal studies. It’s unclear whether this is relevant to voluntary dosing among humans. He went on to question the basis for accepted wisdom on age of smoking initiation and nicotine dependence. At last, nuance instead of diatribe!

    The U.S. Food and Drug Administration and public health researchers have always been concerned about tobacco product effects on vulnerable populations: people at greater risk of starting to use tobacco, suffering from tobacco-related diseases or having problems stopping use of tobacco products. But the scales were tilted toward stopping youth from initiating use and thus away from all those adults getting sick who can’t or won’t quit.

    At the E-Cigarette Summit, a rebalancing seemed to be underway. Along with the usual (and appropriate) concerns about youth and vaping, there were sessions with titles such as “Let’s not forget the smokers” and “‘Smoke-free’ means smoke-free not vape-free.” Could we be approaching a point where the famous appropriate for the protection of public health standard gives protection of smokers’ well-being the weight it deserves?

    This reframing of tobacco harm involves acknowledging some unpalatable facts. First, smokers still exist in persistently large numbers, many in marginalized pockets of society. As Nancy Rigotti of Massachusetts General Hospital/Harvard Medical School noted, “Disparities in tobacco use really drive health inequities in the U.S. And that’s another reason why we need to be addressing the adult smokers.”

    Second, medical best practice approaches to quitting are not working and have no hope of getting us to a smoke-free society. Third, although cessation of use is preferable, harm reduction is a valid goal, sometimes the only realistic one—and it requires actively promoting appealing alternatives to smoking.

    Dated and Overrated

    Various media campaigns have urged us to “make smoking history.” Sadly, that’s not the path we’re on. According to Vaughan Rees of the Harvard T.H. Chan School of Public Health, the commonly recommended “safe and effective” medications fail to help most smokers, especially those from marginalized populations. Calculating their overall impact at the population level, he said, “We see a less than 1 percent reduction in the prevalence of smoking using current first-line smoking cessation medications.”

    He concluded, “The best evidence-based interventions are dated, overrated and cannot meet the challenge of reducing tobacco-related harm in this century.”

    One problem is that people who could encourage smokers to quit have become complacent. As Rigotti described in her talk, “Let’s Not Forget the Smokers: A Clinician’s Perspective,” “These days, for some of our clinicians, it’s really tobacco use is a solved problem.”

    Rigotti quoted a cardiologist colleague who told her, “Gee, most of my smokers have quit now.” This doctor’s patients are well-off, with good health insurance. “If instead she were working in a safety net hospital,” Rigotti noted, “she would know that there are lots of smokers but that their smoking behavior was very intractable.”

    Even before Covid-19, tobacco treatment struggled to gain physician mindshare. “We’re not very exciting because we haven’t had a new tobacco product on the market for more than 10 years,” said Rigotti. That is, physicians lack new pharmaceuticals to treat nicotine addiction.

    What might change clinicians’ attitudes and practices? The comfortable route, Rigotti said, would be e-cigarette products designated as medical devices, similar to the U.K. approach. But that is likely years away. In the meantime, promoting the fact that the FDA has authorized the marketing of some e-cigarettes “is an opportunity FDA could take advantage of to say the public health benefits outweigh the risks for some members of this class of products,” she noted.

    Her final recommendation was increasing doctors’ comfort with the idea and practice of harm reduction: helping patients who can’t or won’t quit. “Everyone’s comfortable with long-term NRT [nicotine-replacement therapy] now; you’re doing it [harm reduction] already,” she said to her fellow physicians. “And maybe you should be doing more of it.”

    In the last decade, recreational nicotine products have proliferated like wildflowers: pouches, gums, heat-not-burn and many more. I would add: Why not do more to educate physicians about those? Especially given the new recognition that alternatives to smoking should be (gasp) appealing.

    Push and Pull

    Treat nicotine addiction with a medicine: That’s the traditional approach to smoking. Another welcome development at the E-Cigarette Summit was hearing multiple speakers advocate for new options, even flavored ones.

    Dorothy Hatsukami of the University of Minnesota focused on factors that might push people away from smoking and pull those who won’t quit toward alternatives. Given that (as her slides noted) “nicotine maintains addiction, but other constituents kill people,” her recommended “push” was policies to reduce the nicotine in cigarettes.

    However, she noted, for those smokers who are unable or unwilling to quit, a “pull” is also needed toward alternative nicotine-delivery systems. Hatsukami described a colleague’s study supporting that “in the context of very low-nicotine cigarettes, you still need to have [alternative] products that are appealing. That have a range of flavors as well as higher nicotine doses.”

    “New technologies clearly are needed to fulfill the promise of tobacco harm reduction,” Rees asserted in his talk. “We need reduced exposure products that meet the needs of smokers.” Such products, he said, along with regulatory standards that reduce or eliminate known toxicants, are the way to prevent a pandemic of 1 billion deaths from smoking in this century.

    Rees showed a refreshing willingness to consider what works, whatever the source, including a 1991 paper from the Philip Morris archives. “One size does certainly not fit all. I learned that from seeing what were previously secret tobacco industry internal documents,” he said. “They designed cigarettes to meet the needs of specific subgroups of smokers. And were successful at creating demand for their products.”

    Along with a focus on rapid delivery of nicotine to the brain, “they also worked very hard to ensure that tobacco products are attractive, that they are convenient, that they are easy to use. That the chemo-sensory qualities of smoking are appealing enough to promote continued use,” said Rees.

    Several speakers made it clear, citing randomized trials and real-world evidence, that boosting continued use is key to reducing harm through e-cigarettes. This included Andrew Hyland of Roswell Park Comprehensive Cancer Center and the FDA-funded Population Assessment of Tobacco and Health (PATH) study. He talked about PATH data on the one in six U.S. daily smokers with no plans to ever quit and who don’t vape. About 2 percent of this group tried and stuck with e-cigarettes, becoming accidental quitters.

    These never-quitting smokers deserve more attention, said Hyland; they are “at much higher risk for a bad cigarette-caused health outcome because they are much older, heavier smokers and at the low end of the socioeconomics distribution.” Electronic nicotine-delivery system products have the potential to expand the pool of smokers engaged in cessation, thus raising overall quit rates.

    How can we get the level of switching success seen in randomized trials of e-cigarettes to happen for more smokers in the real world? David Ashley of Georgia State University, former director of the Office of Science at the FDA’s Center for Tobacco Products, focused much of his opening keynote, “Thinking Outside the Box on E-Cigarettes,” on that question. He stressed that smokers need the opportunity to try various products to find the right one for them as well as coaching on how to use the product.

    “Purchasing a poor device from a gas station or grocery store shelf, trying it out by yourself with no instructions, does not maximize the likelihood of successful quitting,” Ashley said. He contrasted this with a vape shop that takes a “hands-on interactive approach … working with smokers to find the best product for them.”

    Living with Uncertainty

    Jamie Hartmann-Boyce of the Centre for Evidence-Based Medicine at the University of Oxford, summarizing the latest Cochrane Review of electronic cigarettes for smoking cessation, made a plea in her talk’s title for “Living with and Addressing Uncertainty.” There is now moderate-certainty evidence from randomized trials, for example, that quit rates are higher with nicotine e-cigarettes than with NRT. As more results pour in, the Cochrane Review is now updated monthly.

    In closing, Hartmann-Boyce noted that this field “since its inception has been hampered by false dichotomies: Are [e-cigarettes] safe? Are they not safe? Do we protect children? Do we help adults? And now it’s ‘Is the evidence certain or is it uncertain?’”

    She pointed out that just as risk exists on a continuum, so does uncertainty, and that science is working as it should to move us toward firmer ground on e-cigarette effects. “We are getting more certain,” she said. “But what always remains certain is how harmful cigarettes are. And we should not let unnuanced discussions about the uncertainties of e-cigarettes get in the way of communicating that evidence as well.”

    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 Associates. She spent 15 years on the faculty of Harvard Medical School.
  • Fit for the Future

    Fit for the Future

    Chris Cooksey (right), president of Hail and Cotton’s North America operations, suspects company founders E. A. Hail and M. R. Cotton would be proud f the firm’s impressive growth and continued commitment to excellence.
    (Photos courtesy of Hail and Cotton)

    Thanks to its agility and relentless focus on personal service, Hail & Cotton remains in excellent shape even after a century in business.

    By Stefanie Rossel

    In our fast-moving age, few companies can claim to have reached a century. Tobacco merchant Hail & Cotton International Group (HC) is a prominent member of this exclusive club. A lot has changed since the days when E. A. Hail and M. R. Cotton started the company in Louisville, Kentucky, USA.

    “Their focus was on [the] dark fired and dark air-cured tobaccos that were grown in Western Kentucky and Northern Middle Tennessee,” relates Chris Cooksey, president of the company’s North America operations. “They were buying their tobaccos directly from growers and grower associations and then processing and selling it on to European manufacturers for cigarette and cigar consumption. As the European market grew, so did Hail & Cotton, going on to become the largest leaf dealer of U.S. dark fired tobacco. We think Mr. Hail and Mr. Cotton would be very proud that Hail & Cotton not only remains in existence but [also] with the company’s impressive growth and continued tradition of excellence.”

    Today, HC has fully integrated operations and sourcing capabilities from 20 different countries—including all the world’s major tobacco producing countries—on five continents. “This means not only has our reach greatly expanded but so has our product offering,” says Andy Spies, president of international operations.

    Today, HC’s product portfolio is highly diverse: Various dark air-cured types and dark fire-cured tobaccos are still on offer, but they have been complemented by flue-cured, burley and oriental tobaccos for applications in cigarettes, pipes, cigars, chewing tobacco, moist snuff, snus, roll-your-own and water pipes.

    “We pride ourselves on the wide variety of quality tobaccos we offer, but we also take great pleasure in offering other value-added services such as fermentation, sweating, blending, cut rag and long-term third-party dry storage services,” says Spies. “Besides our growth, but not unique to HC or the tobacco industry, the modern business environment has transformed dramatically over the last 100 years. No longer is a business trip to another continent a long journey over the ocean by ship or are sales conducted merely on a handshake. The whole world is a different place in terms of communications, transport, governance, finance, regulation, etc. We have all therefore been forced to change, and HC will continue to adapt and transform ourselves so we remain up to date and relevant in this changing, dynamic yet still great industry.” 

    Andy Spies

    Unique Management Structure

    Since 1999, Hail & Cotton has been part of U.S.-based Luckett Holdings (formerly Luckett Tobaccos). Following the takeover, Hail & Cotton consolidated its operations by relocating its threshing facility and corporate headquarters to Springfield, Tennessee. Since then, the company has constantly modernized its processing facilities and built or acquired industrial properties to accommodate customer requirements for receiving, purchasing, processing and packed storage of tobaccos of U.S. and other origins.

    More than a decade ago, a merger greatly expanded Hail & Cotton’s reach. In 2011, the company acquired CdF International Group—which in turn had emerged from the combination of Spanish leaf merchant Compania General de Tabacos de Filipinas with Netherlands-based Lippoel Leaf in 2007. Today, the company also has joint equity partnerships with CTA in Brazil and BHC in Zimbabwe. Together, they service a customer base of approximately 350 all over the world.

    For many years, HC has been contracting directly with most of its farmers, depending on origin. The company has nearly 30,000 growers in its operations around the world. “Tobacco growers in all parts of the world face different challenges each year,” says Eric van der Linden, president of dark air-cured operations. “In countries where we contract tobacco, our agronomy teams work with our growers to help improve farming practices that not only improve yields but also aim to protect the resources that are important to sustaining their farms for future generations. We also participate in various industry organizations and undertake several country-specific projects and initiatives aimed at preserving the environment and enhancing our farmers’ sustainability and livelihoods.”

    The company stands out not only because of its long tradition and diverse product range but also because of the way it is managed: In contrast to other businesses, which are often led by one person, HC has three presidents with each of them heading one division. “Indeed, this is unique, but to us, it makes a lot of sense,” says Cooksey. “Our three divisions are very different not only in geography and product offering but also in dynamics. This model enables us to exercise our unique traits and expertise in different types of tobacco and countries that benefit our customers when they are looking at new projects for different products. When you work with a group that has no politics and all [are] pulling in the same direction with the same goals and passion that you [have], it is an incredible and very rewarding experience. We can count on each other without any reservation. This same tone runs throughout the company and generates an extremely powerful teamworking and united culture. The synergies we provide for each division continue to strengthen our company, enhance our products and increase our growth. It has also allowed us to build a great network and develop good friendships with our colleagues from different parts of the world. It is what sets our company apart from others.”

    Trialing Times

    Eric van der Linden

    Each of the three presidents has more than 30 years of industry experience—a long time during which the leaf sector has seen significant changes, among them the phasing out of tobacco subsidies, increasing restrictions for tobacco products, the financial crisis of 2008 and a continuous decrease in global cigarette consumption.

    “You can also add regulation, legislation, anti-tobacco lobbies, increased competition, competing products and increased stakeholder expectations on environmental social governance (ESG),” comments Spies. “Declining consumption and consolidations are, however, probably the biggest challenges. Declining consumption is set to continue, and it makes it difficult not only for leaf dealers to plan but for our customers as well. When you factor in a decline in manufacturers of tobacco products due to consolidations and mergers, it adds another layer of complexity. Despite these challenges, HC has continued to grow each year over the past 10 years and is determined to continue this trajectory. Challenges and change and how a company responds to them is what builds a stronger company, and HC is stronger today than it has ever been.”

    The Covid-19 pandemic has brought with it new challenges for companies worldwide, such as a container shortage, rising shipping costs and extended delivery times. HC has not been exempt from the issues brought on by the virus, according to van der Linden. “From labor shortages to shipping delays and everything in between, it has been a challenge,” he says. “We took as many steps as possible, such as positioning tobacco in strategic locations closer to ports to be able to move when possible. We do not believe there is one strategy that we have implemented that sticks out. What does stand out is our positive attitude and perseverance in maintaining a steady supply of product to our customers.”

    Fit for the Future

    Taken together, the challenges of the past years have actually been positive for the company, according to Cooksey. “We have greatly expanded our footprint and our client portfolio. Thus far, we have continued to experience growth in a declining industry. This is a testament to our employees’ passion, knowledge, experience and teamworking culture. We are fortunate to have so many people in this company who care about what they do and how they do it.”

    Fresh blood in the team is welcome—the company is currently seeking to attract new talent, Cooksey explains. “We think we provide a few uniquely positive things: Young people get excellent training; they gain experience and are then held accountable earlier than, say, in a bigger, multinational company. We run a flat reporting structure, and we promote a culture that demands mutual respect and teamwork. We all work very hard, but we also like to still have fun, and we think that goes a long way in your job and career.”

    To make the company fit for the next 100 years, HC is working with an international consultancy to effectively address and tackle ESG in the future. “HC fully recognizes the importance of ensuring that we understand our impact on the environment and human rights,” says Spies. “The issues facing the tobacco industry are not unlike those facing other agricultural businesses globally—such as ensuring that the potential and actual impacts to people and environment in the supply chain are understood and addressed in order to operate responsibly.”  

    In terms of size, Mr. Hail and Mr. Cotton may not recognize their company today—but they would definitely recognize the way in which it is run: still focused on its service to the customer and the grower, adaptable to the ever-changing industry and committed to growth. The founders would have been pleased to see that HC is well prepared for the future and will continue to play an important role in the tobacco industry.

    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.
  • Choppy waters

    Choppy waters

    Photo: BAT

    Machinery makers navigate supply chain challenges and customers’ changing product portfolios.

    By George Gay

    I was rummaging around in my office the other day, looking for something that I didn’t find, but as is often the case when rummaging, I did find many things for which I wasn’t looking. One of those things was a 20-year-old CD with the name of a tobacco machinery company on it and the title “Past, Present and Future,” and given that I was due to write a machinery story, I decided to take a look. The CD contained a PowerPoint presentation with 44 slides, 20 of them dedicated to the past, 23 to the present and one to the future. The future slide was unique not only in respect of it being the only one to address the future but also because it was blank except for the words “The Future.”

    I don’t blame the presenter for being cautious. Predicting the future of the tobacco industry and its various sectors has always been fraught. The industry has been written off, prematurely, more times than I care to remember. But there is no doubt that, nowadays, the storm clouds appear to be more threatening, partly because they are coming from both within the tobacco industry and without. The range of regulations that govern the industry is becoming wider and more radical at a time when, partly in response to those regulations, the industry has chosen to transform itself.

    So where is the industry, and, in particular, the tobacco machinery sector headed? It hardly seems worth stating that the future of the tobacco machinery business is linked to the future of the tobacco business, and, since the tobacco business is in decline, the tobacco machinery business must be in decline. End of story. But, of course, the situation is far more complex than that.

    One obvious caveat that has to be added to this story concerns the offshoot the tobacco industry has grown, comprising lower risk tobacco and nicotine products. The problem here, however, is that it is not easy to predict whether this offshoot will flourish or atrophy. And, even if it does flourish, it is not easy to predict what the conversion rate of smokers to the consumption of these new types of products will be. It has to be remembered that if the traditional tobacco business is in decline, the opportunity for converting smokers diminishes, though this could be offset if nonsmokers were drawn to these products.

    While some countries are encouraging, or at least not discouraging, such new products, others with huge populations are banning (India) or discouraging (China) them. In some countries, and for some time, entry to the new products markets will probably remain prohibitively expensive for many consumers, and there is the looming problem associated with environmental issues.

    Optimization

    Nevertheless, asked what the situation would look like in three years’ to five years’ time, Norbert Schulz-Nemak of TMQS had no hesitation in saying new-generation products (NGPs) will have taken a higher share of the overall market simply because such a conversion is a strategic goal of multinational companies. But combustible cigarettes would still be around because they were relatively cheap to buy and relatively easy to consume.

    Was it the case, though, that the tobacco industry might split into a number of tobacco industries operating quite differently in various regions or countries in response to local regulatory environments and, therefore, the different products on sale within those regions or countries? It is not difficult to imagine a U.K. market without tobacco but with e-cigarettes completely divorced from an India market without e-cigarettes but with tobacco.

    But in response, Schulz-Nemak said TMQS believed the only split would be in respect of technology. Tobacco manufacturers would continue a process started some time ago whereby they had concentrated the manufacture of their various products within specific manufacturing sites, thus optimizing the use of those sites. Focusing within individual sites on the machinery and processes necessary only for specific products provided for clear structures and logistics. Obviously, added Schulz-Nemak, there would be exceptions, but generally speaking, such developments were logical.

    Maintaining Existing Equipment

    Despite the transitions that the industry is going through, tobacco manufacturers large and small will clearly aim to maintain production levels and efficiencies within their traditional operations while keeping their businesses flexible enough to deal with future market trends. And this, according to TMQS, is leading many companies to be more cautious in their planning than they had been previously.

    Catering for an increasing portfolio of NGPs and vaping products involved a costly exercise in bringing in new machinery, said Schulz-Nemak. And this was occurring at a time when combustible cigarettes still accounted for the major output of manufacturers—combustible cigarettes whose production lines also needed investments, both routine and regulation-specific, such as those requiring the manufacture of biodegradable filters.

    Schulz-Nemak said that, in the case of secondary machinery, TMQS could help optimize production while keeping expenditure down. This potentially meant eliminating the need to invest in new machinery and then, perhaps, having to invest in new supporting infrastructure, different spares and materials. TMQS could offer machinery improvements, including those extending the life of equipment. It could provide everything from routine maintenance to repairs, conversions, extensions and modernizations. And it could offer support with spare parts and assembly groups.

    Filling the Gaps

    One change that has happened in the recent past is that tobacco manufacturers have tended to reduce their traditional product portfolios, which, presumably, has pushed more production toward the long-run end of the manufacturing continuum, and which, in turn, would have helped maintain demand for high-end, high-capacity machinery. But there is a flip side to this. When products are removed from the market, the holes created are seen as opportunities by entrepreneurs. This phenomenon is to be observed in many industries, and while it tends to be more subdued in the case of tobacco because taxes often dominate the retail prices of cigarettes, it happens. This raises the question of whether the inevitable gaps left in the market will see the emergence of more niche players requiring more modest machinery, either new or rebuilt, and simpler factory layouts. 

    In fact, Reto Iten of Iten Metals told me recently that the strength of demand for relatively old, slower cigarette making machinery was currently “amazing.” Demand was being driven by niche manufacturers that might want to produce, for instance, a CBD cigarette or an environmentally friendly cigarette, perhaps one using organic tobacco or one using only locally grown tobacco. With the right machines, such manufacturers, which were active on relatively small but attractive markets, could use high-quality cut rag to make good-tasting cigarettes.

    So why aren’t we all getting in on the act? Well, according to Iten, to be successful at such niche manufacturing, you have to be willing to make a certain level of investment. A secondhand maker that had been the subject of only an overhaul would probably produce more hassles than cigarettes. And buying the sorts of equipment sold by his company—rebuilt, as-new machines based on original OEM drawings—was not easy at the moment because of a number of factors, not the least of which was the lack of donor machines. In fact, Iten said he had plenty of inquiries at the moment but nothing to offer, so recently, he had been in discussions about how to overcome the current shortages of donor Molins Mk8 and Mk9 makers, especially their machine bases, since the mechanics and electronics of these machines were well known and could be reproduced fairly easily.

    Machinery rebuilders have been struggling with supply chain disruptions. For example, PLC components that used to be available immediately off the shelf are now subject to delivery times of six months or more.
    (Photo: gen_A)

    Materials and Manpower

    For start-ups, Iten recommends a standard industrial cigarette maker, such as the Mk8. For such machines, it was not difficult to find consumables and spare parts, many of which were off the shelf, and for others of which the original drawings were available so that they could be made by a proficient engineering company. Because of the Mk8’s ubiquity, even skilled operators were often available locally, but the machine’s most important advantage was that it produced a quality product.

    But there are other problems with delivering rebuilt machinery, one of which comprises recent interruptions to deliveries of suitable raw materials. Not all materials were currently available, said Iten, so there were times when effort had to be expended finding substitutes, which increased costs and lead times. And these disruptions are occurring not only in respect of mechanical parts and materials. Electronic components, including PLC components, that used to be available immediately off the shelf are now subject to delivery times of six months or more. “The planning of a project has become really messy,” said Iten in an emailed reply. “It is simply not possible to keep a delivery time agreement these days.”

    In fact, Iten described the delivery interruptions, which had started in 2020 with a lack of container availability and had become worse since May 2020, as “incredible.” Now, before a machine rebuilding project was started, it was necessary to have ordered all of the e-parts for the PLC control. A shortage of manpower was another factor—one that was causing some workshops to be operating under capacity.

    Iten said he expected the current problems to last through 2022 and even expand. It was not possible, he added, to gauge what would happen during 2023, but it was likely that things would remain difficult.

    Meanwhile, TMQS also helps niche tobacco manufacturers set up their operations. Schulz-Nemak said TMQS could rework machinery and set it up so as to operate easily and flexibly to meet a wide range of production needs. It could provide additional machinery, high-quality parts and assembly groups.

    And when it came to setting up small operations, TMQS could combine forces with experts in different fields to create the optimum, cost-effective production lines.

    The writer would like to thank Chris Crawley, global business development consultant to the tobacco industry, for his input on this piece.

    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.
  • Pathways To Acceptance

    Pathways To Acceptance

    Photo: Artinun

    Scientists, regulators and industry must work together to help change perceptions of nicotine.

    By Phil Saunders

    A recent story in Tobacco Reporter highlighted that more than 60 percent of U.S. doctors are confused about the tobacco harm reduction risk continuum. Many incorrectly believe that all nicotine products are equally harmful, making them unlikely to recommend e-cigarettes to people trying to quit smoking.

    Elsewhere, the picture isn’t that different. For example, a survey released earlier this year showed that in England, one of the most pro-vaping countries in the world, only 40 percent of local authorities actively offer e-cigarettes as part of stop-smoking services. This might seem more positive, but it still leaves the remaining 60 percent unconvinced.

    There are some positive developments in Australia, which recently scrapped its earlier plans to ban e-cigarette imports. Hollie Hughes, chair of a committee established to examine vaping, recently stated that she believes vaping to be “an incredibly powerful cessation tool” that is part of the discussion on reducing smoking rates in the country. But there are still many countries with extremely high smoking rates where e-cigarettes are completely illegal, including India, Mexico, Brazil and Singapore.

    There is obviously still a long way to go to get a unified acceptance of the role reduced-risk nicotine products can play in tobacco harm reduction.

    Perception is Key

     Fundamentally, the issue is that nicotine is perceived as the bad guy. That is why 60 percent of doctors in the U.S. don’t understand e-cigarettes. For years, the popular discourse has equated tobacco and nicotine as completely interchangeable in terms of smokers’ health and the damage it does to society. Widespread misperceptions around nicotine remain the industry’s biggest challenge and are the No. 1 issue that public health bodies and regulators will need to address to change the status quo.

    Recently, U.K. Secretary of State for Health and Social Care Sajid Javid announced that anyone born after 2008 in the U.K. will not be allowed to purchase tobacco products and that the minimum age will raise every year. A similar approach is also being considered in Denmark. But Javid is not considering including e-cigarettes in this approach, which may be an acknowledgment that he at least doesn’t see nicotine as the biggest issue impacting smokers’ health.

    What is obvious is that the scientific community, regulators and the wider electronic nicotine-delivery system (ENDS) industry must work together to help change perceptions about nicotine and educate people about the difference between tobacco and nicotine.

    A Supportive Regulatory Environment

    Taking England as an example of an environment supportive of vaping, the Tobacco and Related Products regulatory framework for e-cigarettes as consumer products is a light touch compared with the premarket tobacco product application (PMTA) in the U.S. As a result, the U.K. offers one of the world’s fastest consumer routes to market for new vape products and has a thriving vape retail sector and a falling adult smoker rate.

    The U.K.’s Medicines and Healthcare products Regulatory Agency is now also actively encouraging the use of e-cigarettes to support smoking cessation. The Department of Health and Social Care 2017 Tobacco Control Plan states that the scientific evidence is clear that e-cigarettes are less harmful to health than smoking cigarettes. The U.K. has now set a target to be “smoke-free” by 2030 with vaping and next-generation alternatives seen as a key enabler in reaching that goal. A review commissioned by the government recommends that the National Health Service increases efforts to encourage smokers, particularly pregnant women, to switch to vaping and e-cigarettes.

    Scientific Substantiation

    Undoubtedly, we need to be led by science. Regulatory submissions, conference presentations, scientific posters and papers must continue to add to the body of evidence demonstrating the role of noncombustible next-generation nicotine-delivery products in tobacco harm reduction.

    “Real world” evidence and behavioral studies are also invaluable, particularly to convince regulators and medical professionals of smokers’ switching habits and that these products don’t encourage “on-ramping” of nonsmokers, particularly youth. Peer groups and professional bodies also have their role to play in supporting this aim to be driven by science rather than opinion and media headlines.

    In the U.S., the huge amount of data now available due to the rigor of the PMTA process is also invaluable. Companies have spent millions of dollars on scientific studies to demonstrate to the Food and Drug Administration that their products are appropriate for the protection of the public health.

    However, there is still the issue of a lack of independent scientific research into vaping as most universities shun research into tobacco-related products. The FDA’s first PMTA marketing orders for consumer vape products in the U.S. are the closest the ENDS industry has to independently verified in-depth scientific evidence that vape products can be evaluated as less harmful than smoking cigarettes.

    Industry Opportunities

    The next step in product acceptance is to see companies start to further develop consumer products for a medicinal regulatory pathway. Acceptance as a medicinal device to help smokers quit would further legitimize vaping as reduced harm. Achieving this could also lead the way for nicotine strengths to be prescribed at higher dosage levels to support smokers to give up more effectively through a medically monitored offramping process.

    Looking to the Future

    There are still significant global differences in the acceptance and understanding of the role of e-cigarettes in supporting tobacco harm reduction. The confusion between the different roles tobacco and nicotine play in causing smoking-related diseases, however, remains a common limitation.

    Robust regulatory frameworks for both consumer and medical ENDS will help build legitimacy for the sector with both regulators and consumers. In this way, regulation is an important tool to help build confidence in the sector.

    Whichever market is chosen for a product, an in-depth understanding of that country’s regulatory frameworks and ongoing investment in gathering scientific evidence is essential. The start of manufacturers looking to gain regulatory approval for their ENDS as medical devices will be an important next step in the industry’s journey to acceptance.

    Phil Saunders is the strategic partnership manager at Broughton.