Category: Heat-Not-Burn

JTI Launches Ploom X Advanced in Italy

TR Archive
Japan Tobacco International launched its Ploom X Advanced in Italy’s travel retail market at Milan Malpensa Airport.
Already available in duty-free stores in Japan and Switzerland, the product comes in a variety of device colors, sticks and accessories.
“I was excited to see JTI’s premium offer in the RRP [reduced-risk product] category taking off in Milan,” said JTI Global Travel Retail Sales Director Simone Mammi in a statement. “Our Ploom X Advanced device has been launched in Italy travel retail, alongside Camel heated-tobacco sticks, available in four flavors and tobacco intensities (gold, bronze, burgundy and teal).”
JTI noted that with Avolta as one of its longstanding retail partners at Milan Malpensa Airport, it optimized the premium front-of-category space to provide impactful showcasing that, when coupled with ongoing consumer engagement, “should deliver promising results.”
The Ploom X Advanced device was named the best product available in the heated-tobacco category at the U.K. Product of The Year Awards 2024.
May 22, 2024
New Briefing Details THR Success in Japan

Photo: wachiwit
Knowledge Action Change (KAC) has released a briefing paper on the rapid fall in cigarette sales in Japan following the introduction of heated-tobacco products (HTP).
Titled “Cigarette Sales Halved: Heated-Tobacco Products and the Japanese Experience,” the paper explores some of the social and cultural factors that have made Japan particularly suited to HTP and provides a case study showcasing the potential of tobacco harm reduction through the adoption of safer nicotine products.
As well as referencing a number of peer-reviewed science papers, the briefing paper, available in 12 languages, also includes some new Global State of Tobacco Harm Reduction research, which compares up-to-date sales figures that emphasize the changing nature of cigarette and HTP consumption.
According to KAC, the success of HTP in Japan offers significant hope of their potential to reduce cigarette sales in other similar countries.
“The speed and scale of the change in Japan shows just how quickly things can improve when those people already consuming nicotine are given access to a safer alternative,” said KAC Director David MacKintosh in a statement.
“This is not the result of a specific government policy or initiative, yet the benefits to individuals and society are significant. There are lessons to be learnt from Japan by all those who wish to see the use of combustible tobacco consigned to the history books. Harm reduction is about giving people the opportunity to improve their own health and the health of those around them. Given the chance, most people will do just that.”
May 15, 2024
U.S. IQOS Targets ‘Achievable’: Analysts

Photo: elenavah
Philip Morris International’s goals for its heated tobacco products in the United States are realistic according to analysts cited by Reuters.
Today marks the expiration of Altria Group’s exclusive right to distribute PMI’s internationally popular IQOS tobacco-heating device and consumables in the U.S., leaving PMI free to compete in the world’s most lucrative tobacco market with its top noncigarette brand.
The multinational plans to launch IQOS in the U.S. in the second quarter. PMI wants to get a 10 percent share of total U.S. cigarette and heated tobacco volumes within around five years of it launching the latest version of its device, which is not expected until at least 2025.
It will have to develop the category almost from scratch. Unlike in other developed countries, heated tobacco products are virtually nonexistent in the U.S market, where sales of noncombustible nicotine products are dominated by e-cigarettes.
Research by Bernstein analyst Callum Elliott in other markets suggests that high vaping rates need not hurt heated tobacco take-up. “Maybe the 10 percent … target really could be achievable?” he wrote in a note to investors.
Another factor that should work in PMI’s favor is the fact that the U.S. Food and Drug Administration has authorized PMI to market IQOS as reducing exposure to harmful chemicals versus cigarettes. The FDA has not done the same for vapes.
As a result, IQOS could have lower taxes, which would help to ease its relatively high price tag.
And unlike Altria, PMI need not worry about cannibalizing sales of its traditional tobacco products, as it sells no combustible cigarettes in the U.S.
Sean King, equity analyst at top-20 PMI investor Columbia Threadneedle, believes PMI’s targets are achievable.
With an estimated $20 billion profit pool up for grabs and no cigarette revenues to worry about, PMI can put its firepower behind IQOS success, he said.

April 30, 2024
U.K. Misleading Public

Mora Gilchrist (Photo: PMI)
Philip Morris International has accused the U.K. Department of Health of spreading misinformation about heated-tobacco products after a social media post warning that “all forms of tobacco are harmful,” reports The Grocer.
A tweet posted by the department in a thread of “myths” about vaping and tobacco contained false and misleading statements and risks driving consumers back to cigarettes or dissuading current smokers from making the switch to alternatives, according to the multinational.
“What hope do adult smokers have when seeking out accurate information on smoke-free products if it’s the government that’s spreading misinformation?” said PMI Chief Communications Officer Moira Gilchrist.
“All forms of tobacco are harmful, and there is no evidence that heated-tobacco products are effective for helping people to quit smoking,” the tweet stated.
“Laboratory studies show clear evidence of toxicity from heated-tobacco products. Unlike vapes, there is no evidence they are effective for helping people to quit smoking,” the post continues, citing a 2017 report by the Committee on Toxicity.
According to Gilchrist, such statements “distort the scientific evidence base” and “seriously misleads the public.”
While acknowledging that heated tobaccos are not risk-free, Gilchrist said it is misleading to imply that all forms of tobacco are equally harmful.
A Public Health England report in 2018 said that available evidence suggested that heated-tobacco products “may be considerably less harmful than tobacco cigarettes” but “more harmful than e-cigarettes.”
The Grocer
April 25, 2024
BAT to Make Smokeless Products in Hungary

Photo: Csak Istvan
BAT will establish a HUF60 billion ($162.12 billion) factory for smokeless products in Pecs, Hungary, creating 450 new jobs, reports Hungary Today.
BAT already employs almost 1,000 people. According to Minister of Foreign Affairs and Trade Peter Szijjarto, the project will contribute to the success of two important Hungarian economic policy objectives—to boost exports and protect the environment. The Pecs factory is carbon neutral and will export more than 80 percent of its products, the minister noted.
The project will also help develop Hungary’s southwestern region, which traditionally has received fewer investments than its western counterparts.
Usman Zahur, BAT’s regional director for Central Europe, pointed out that the Pecs unit could become a major manufacturing center for smokeless alternatives, building on more than 30 years of cooperation with Hungary.
“This significant investment is an important step toward a smoke-free world, offering smokers better alternatives to cigarettes,” he was quoted as saying. “The investment further reinforces Hungary’s strategic importance in our long-term plans to have 50 percent of our revenues from new category products by 2035. Our manufacturing capabilities, highlighted by the Pecs center, are key to achieving this goal.”
April 22, 2024
U.S. Market Poised for Disruption

Photo: vfhnb12
The American tobacco market is poised for disruption as Altria Group’s exclusive U.S. distribution rights to Philip Morris International’s IQOS heat-not-burn product expires on April 30, reports The Wall Street Journal. After this date, PMI will be free to compete in the U.S. with its top noncigarette brand.
PMI hopes IQOS can help it grab a 10 percent share of the lucrative U.S. cigarette and heated-tobacco market by roughly 2030, representing an additional $2.2 billion in annual earnings before interest, taxes, depreciation and amortization, according to Stifel analysts.
Altria, with its 50 percent share of the American cigarette market, has a lot to lose if PMI can persuade more smokers to switch to noncombustible alternatives.
In recent years, U.S. smokers have become more receptive to alternative nicotine delivery methods. Last year, 40 percent of all nicotine products sold in the U.S. were smoke-free offerings such as e-cigarettes and oral nicotine pouches. The share of traditional cigarettes, meanwhile, declined to 60 percent last year from 80 percent in 2018.
If the trend continues, Americans will be more likely to reach for a vape or nicotine pouch than a cigarette within three years.
Already earning some 40 percent of its net revenue from smoke-free products, PMI needs not worry about the dwindling number of U.S. smokers because it doesn’t sell cigarettes in America.
Altria, by contrast, still relies heavily on combustible cigarettes, which currently account for 85 percent of its sales. Its comparatively low exposure to the smokefree market includes brands such as On! oral nicotine pouches and Njoy e-cigarettes. The company also has a joint venture with Japan Tobacco to launch Ploom heated tobacco sticks in the U.S. and is working on its own heat-not-burn brand.
A badly timed bet on Juul Labs saddled the company with a $12.5 billion loss.
On the flipside, Altria has a strong U.S. distribution network, which it can leverage to promote its brands—a considerable advantage as the point of sale is one of the few places where tobacco companies are still allowed to advertise their products.
Altria can also harness data to defend its patch. The tobacco giant is integrated into many retailers’ loyalty programs, allowing it to monitor what shoppers are buying.
April 19, 2024
Tea Sticks Under Scrutiny

Photo: cirquedesprit
European legislators are mulling restrictions on herbal heating products, which have been gaining popularity across the continent and elsewhere, reports Reuters.
In the wake of an EU ban on flavored tobacco-heating products last year, tobacco companies have been developing tobacco-free alternatives made from nicotine-infused substances such as rooibos tea.
The European Commission said it is currently evaluating EU tobacco laws, and any changes would be subject to the findings of that effort, public consultation and an impact assessment.
Already, some member states are looking to tighten national legislation.
In Latvia, for example, a draft bill would classify the zero-tobacco sticks as tobacco substitutes and subject to related controls. Croatia, too, intends to regulate herbal heat sticks, according to that country’s health ministry.
Regulation of such products is also being discussed internally in Lithuania.
German authorities, meanwhile, are arguing with manufacturers over whether existing tobacco tax laws cover the new products, according to a spokesperson for the Federal Customs Authority.
BAT said it supports the introduction of evidence-based regulation and appropriate excise taxes for its zero-tobacco sticks, adding that 15 EU member states have already introduced excise duties.
Philip Morris International also believes any nicotine-containing cigarette alternative should be regulated and taxed appropriately, a spokesperson said. The multinational notes that flavors play an important role in encouraging adult smokers to switch away from smoking.
April 2, 2024
Turning Up the Heat

Photo: KKF
Heated-tobacco products continue to gain momentum, although consumption patterns are shifting.
By Stefanie Rossel
Heated-tobacco products (HTPs) continue to make inroads worldwide. According to Euromonitor International, the market reached $35.2 billion in 2023, up from $31.5 billion in 2022. The company expects sales to grow to $40.6 billion in 2024. Expansion continues apace. At its 2023 Investor Day in September, Philip Morris International announced that it would launch its IQOS Iluma in four yet-to-be-named U.S. cities this year.
With almost 30 million adult smokers, the U.S. is believed to offer significant opportunities for HTPs. Euromonitor projects the U.S. consumables market to reach 15.3 billion sticks by 2027. In its September 2023 financial estimate, PMI said it was aiming to capture 10 percent, or 18 billion units, of the U.S. combustible cigarette market within five years after an IQOS Iluma launch.
“In value terms, HTP will be one of the fastest-growing legal RRP [reduced-risk product] categories,” says Shane MacGuill, Euromonitor’s head of nicotine and cannabis research. He bases his prediction on the experience of other markets where HTPs have been successful. “These are markets with a higher disposable income, a still relatively robust smoking population and strong affordability within the cigarette category, as IQOS is a premium product,” says MacGuill. “Manufacturers can communicate around tobacco and nicotine products, thus managing expectations around the HTP. Many of those factors apply in the U.S., but obviously in particular if PMI got modified-risk approval from the Food and Drug Administration; this would give them advantages for their messaging about IQOS.”
MacGuill also sees potential for HTPs in the U.S. cannabis space. “We do see heated cannabis consumables that effectively target the IQOS device just beginning to emerge, although this is still a tiny aspect of the cannabis landscape,” he says.
There is, however, a lack of consensus in the nicotine industry about the immediate future of HTPs in the U.S., according to MacGuill. “A major vape manufacturer we talked to said the HTP category would be almost nothing in the next five years because of regulatory issues, such as how long it will take to get premarket tobacco product application (PMTA) approval,” he says. “If you speak to peers of PMI, there are concerns that PMI could grow the category very significantly in the U.S., leaving no space in terms of revenue and recognition for everyone else.”

Photo: vfhnb12
Waiting for FDA Approval
The upcoming launch will be PMI’s second attempt to establish IQOS in the U.S. In April 2019, the company assigned the exclusive commercialization rights of the brand to Altria, which then launched IQOS in Atlanta and Richmond with more than 100 dedicated salespeople. Heat sticks were sold in 500 stores. One-and-a-half years later, IQOS was available in Georgia, Virginia, North Carolina and South Carolina.
However, plans for further commercialization were interrupted when the International Trade Commission (ITC) upheld a claim by BAT that IQOS products infringed two of its patents. In September 2021, the ITC issued an order preventing Philip Morris and Altria from importing and selling the infringing products, IQOS models 2.4, 3 and 3 Duo and their respective heat sticks.
In July 2020, the U.S. Food and Drug Administration authorized PMI to make modified-risk claims for its IQOS model 2.4; in March 2022, it allowed modified-risk claims for the IQOS model 3. In October of that year, PMI agreed to pay Altria $2.7 billion to reclaim the U.S. commercialization rights for IQOS as of April 30, 2024.
The dispute with BAT was solved only in February 2024, when PMI and BAT reached a global settlement resolving all ongoing patent infringement litigation between the parties related to the companies’ HTP and vapor products. Besides dismissing all pending patent infringement cases, the nonmonetary settlement also prevents future claims against current products.
While the agreement includes a provision to request the lifting of the IQOS sales and import ban, PMI’s focus for the launch of IQOS in the U.S. will remain on its Iluma model, for which it submitted PMTAs and modified-risk tobacco product applications to the FDA in October 2023.
However, PMI has scaled back its original launch plans in the meantime: At the 2024 CAGNY Consumer Conference in February, the company revealed that only one city test was planned in the second quarter of 2024, with a larger scale introduction postponed to the second half of 2025 or later. The decision can be explained with the FDA’s slow reviewing process. Product authorization is the prerequisite for major geographic expansion and an increase in commercial investment, but the FDA is struggling with a substantial backlog in product reviews (see “System Overload,” Tobacco Reporter, March 2023). According to Tobacco Insider, it could take 18 months to 24 months for IQOS Iluma, which comes with a fundamentally different heating system than its predecessors and contains numerous technological improvements, to get authorization. “Thereby, IQOS will have a meaningful presence in the USA (i.e., reaching to at least half of the U.S. smoker base) only in 2027 or later […],” the platform writes on its website.
Nonetheless, PMI will enjoy a significant head start over its competitors. According to MacGuill, it will be important for BAT to enter this category in the U.S. as soon as possible. Globally, PMI estimated the number of IQOS users at approximately 28.6 million at the end of 2023, up by 3.7 million versus December 2022. BAT thinks there are about 8.8 million users of its Glo HTP device worldwide.
Italy Catches Up
With an estimated market value of $11.13 billion in 2023, according to Euromonitor, Japan remains by far the leading market for HTPs. But the market appears to have plateaued; its value is expected to reach $11.23 billion in 2024. A similar trend can be detected in South Korea, where the market value of HTPs climbed from $2.19 billion in 2022 to $2.24 billion last year. For 2024, the market is anticipated to be worth $2.45 billion. According to Euromonitor, in 2022, South Korea ranked third behind Italy in the global HTP league. In 2024, it is expected to fall to fourth place, behind Germany. Russia, too, is a large HTP market, but data has become elusive since that country invaded Ukraine. The most recent figures, presented at last year’s InterTabac exhibition in Dortmund, valued Russia’s HTP market at $3.2 billion.
As Japan’s and South Korea’s HTP markets reach maturity, price competition is increasing, according to MacGuill. “Consumers are experimenting with other brands, trying other devices, while manufacturers are subsidizing devices,” he says. “It’s the natural circle of the mature market to have rapid growth and then a plateau. However, the trend for HTP markets in general is that growth is likely to return with triggers such as price. There is no ceiling.”
The dynamics in Italy are similar, according to MacGuill. Its HTP market value has grown from $4.07 billion in 2022 to an estimated $5.18 billion last year and is expected to reach $6.51 billion in 2024, boosted by an increasing offer of devices at lower price ranges that drive product adoption. As in Germany, where the retail value of HTPs has increased from $1.96 billion in 2022 to an estimated $2.47 billion in 2023 and is anticipated to reach $2.98 billion this year, MacGuill expects the Italian HTP market to continue to grow, albeit at a slower pace than in Japan when IQOS first hit the market 10 years ago. In Japan, HTPs benefited from higher consumer incomes and consumers’ general enthusiasm for new products, among other factors. “In the two European countries, we don’t have that combination in the same way,” says MacGuill. Italy, he says, was also increasing cigarette taxes at the time when HTPs were introduced.
Globally, the HTP category is characterized by geographical diversification and an intensification of use. “Frequency of consumption plays an important role,” says McGuill. “In most markets, daily users represent the biggest proportion of consumers. In Italy, 73 percent of cigarette consumers smoke daily whereas 67 percent use HTPs, which is close and experiences volume progression. When there is a lot of experimentation, such as use on a weekly basis, then this will have a magnifying effect on volumes.”
Most notably, geographical expansion is expected in Jordan, Lebanon, Egypt and Singapore. “The further down the average income table, the softer the potential for HTPs gets—also the further east you go,” says McGuill. “Here, technology development that gets the price down for HTPs is needed. In these regions of the world, affordability will be the main driver.”
Opening Up New Possibilities
Regarding regulation of HTPs, MacGuill expects an alignment with the cigarette category in many markets, particularly in terms of public consumption restrictions and excise tax. This, he says, will bring the price of heat sticks closer to that of cigarettes, dulling the incentive to switch.
Herbal consumables will be an interesting segment. “It allows manufacturers to avoid the excise and regulatory hurdles,” says MacGuill. “However, regulators will move much more quickly and follow through with regulation and action. And herbal sticks could become a victim of their own success as there’s only so much rooibos tea in the world. So the security of supply might become questionable in some markets.”
Herbal consumables democratize the category, according to MacGuill, because small manufacturers won’t have to compete with the established players for leaf tobacco. “We already see smaller brands in the space with apparent success,” he says. “The segment won’t go anywhere near a point where it’s as fragmented as the vape market, but it will be interesting to see whether the tobacco industry will push for some regulation because they want responsible players and not what we have seen in disposable vapes.”
For tobacco companies, herbal heat sticks may pave the way for products in other areas, such as cannabis. “For BAT, for instance, which owns cannabis supplier Organigram, the next logical step could be to sell heated cannabinoid or CBD products,” says MacGuill.
He is doubtful, however, that manufacturers would provide a combined nicotine-cannabis product. “From a regulatory perspective, manufacturers are quite keen to keep these two spaces apart,” he says.
New heating technologies for devices, MacGuill stresses, will be successful only if they offer consumers a benefit. “This could be a meaningful difference to user experience, enhanced efficacy of the product or increased harm reduction at the higher end of the market, or a technology that drives down price at the lower end,” he says.
The most pressing task for public health and manufacturers alike, he concludes, will be to make HTPs more accessible to consumers in low-income and middle-income countries. Home to the lion’s share of the world’s smokers, it is in these markets that lower risk nicotine products can make the greatest contribution to reducing the public health impacts of smoking.
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.

April 1, 2024
Job Ads Suggest IQOS Debut in Austin

Image: Alexander
The resolution of an IP dispute with BAT has removed a major hurdle to selling the product in the U.S.
Philip Morris International is preparing to launch its IQOS heated-tobacco device in Austin, Texas, USA, reports U.S. News. The city will be a testing ground for PMI’s re-entry into the United States after the company resolved an intellectual property dispute with British American Tobacco that had prompted the International Trade Commission to ban imports of IQOS in the United States.
PMI previously announced that it planned to launch IQOS in four cities in two U.S. states beginning with one city in the second quarter before a larger rollout in 2025. The company did not, however, release details.
According to U.S. News, LinkedIn job advertisements suggest that PMI is planning to launch the product in Austin. The advertisements were posted this month and include positions such as field sales representatives, territory managers and retail sales advisors.

The U.S. would be a significant market for IQOS. Euromonitor estimates that total U.S. nicotine sales excluding nicotine-replacement therapies were $143.6 billion in 2022. Cigarettes accounted for the majority of sales, but Euromonitor predicts that their value will drop by 30 percent by 2027 and the value of smoking alternatives such as e-cigarettes and nicotine pouches, will increase by 36 percent in the same period.

Investors are waiting to see if PMI can create a heated-tobacco market in the U.S., where vaping is dominant.
According to Brett Cooper, managing partner and analyst at equity research firm Consumer Edge, Texas offers an interesting trial market due to broad demographics. He noted that diverse cities like Austin, Houston and Dallas provide access to a wide range of consumer groups.

U.S. Centers for Disease Control and Prevention data shows that tobacco taxes in Texas are relatively low, with the excise tax rate on a pack of cigarettes standing at $1.41 in September 2023.
In January, Texas introduced new e-cigarette laws, banning products that resemble food or that include symbols or celebrities targeted at minors or that depict cartoon-like fictional characters.
PMI believes IQOS can capture a 10 percent share of the U.S. tobacco and heated-tobacco unit volume by 2030.

March 29, 2024
Taiwan Group Protests THP Regulations

Image: butenkow
The Clean Air Alliance has called on the Taiwanese public to join a protest in front of the Presidential Office Building in Taipei March 22, 2024, against heated tobacco regulations that benefit traditional cigarette manufacturers, reports The Taipei Times.
The group states that though its been a year since the Tobacco Hazards Prevention Act was amended, heated-tobacco products cannot be sold legally but 14 new types of traditional paper-wrapped cigarettes have been approved for sale.
The alliance noted that the review standards for heated-tobacco products and traditional cigarettes are disparate and unfair toward heated-tobacco products, which benefits cigarette manufacturers.
Police have put traffic restrictions in place in the area due to the protest.
The protest is set to begin at 9 a.m. and end by noon.
March 22, 2024