Blog - Tobacco Reporter

BAT to Host 2024 CORESTA Congress

The UK-based company will host the 2024 CORESTA Congress in Edinburgh, UK, from 13 – 17 Oct.

The Congress will bring together leading scientists, tobacco and related product experts, and regulators from over 165 member organizations to focus on the theme of “Advancing Tobacco Harm Reduction through Scientific Collaboration.”
Participants will share, discuss, and collaborate on tobacco and related product
science.

BAT has volunteered to host the upcoming Cooperation Centre for Scientific Research Relative
to Tobacco (CORESTA) Congress 2024, set to take place from 13 – 17 October at the Edinburgh
International Convention Centre, UK.

This year’s congress will bring together over 165 member organizations, from over 30 countries
and non-members, including companies, research institutes, laboratories, associations, and
regulatory bodies under the theme of “Advancing Tobacco Harm Reduction through Scientific
Collaboration”.

Formed in 1956, CORESTA is committed to exploring the latest scientific research to facilitate
positive change in the tobacco industry. This year’s iteration continues this ambition, specifically
seeking to advance the knowledge and understanding of the science related to Tobacco Harm
Reduction (THR) among its membership and attendees.

To achieve this goal, leading scientists from across the world will attend and present their work, bringing their expertise in a diverse range of disciplines to allow participants to explore all aspects of THR. Thanks to the collaborative work of the most experienced scientists in their field, CORESTA has gained international recognition.

With increasing regulatory requirements, CORESTA’s scientific work and outputs have become a worldwide reference point for tobacco policymaking and support the development of testing standards, such as ISO Standards.

As host, BAT looks forward to facilitating the conversations necessary to grasp the public health opportunity presented by THR to significantly reduce the risks for the estimated 1bn consumers who smoke and address misperceptions of alternative tobacco and nicotine products with the potential to reduce risks compared to cigarettes.

To learn more about the event and request an invitation, visit the official congress website: www.corestacongress2024.com. Registration is open until Sept. 20, 2024.

September 4, 2024

Fire Damages Universal Facility in Dominican

A fire broke out Sept. 2 at Inetab-Kaubeck, Universal Corp.’s leaf-sorting and sales facility in Moca, Dominican Republic.

In a letter sent to Universal clients obtained by Halfwheel, Inetab-Kaubeck Managing Director Philipp Schumacher said that there was “a material loss of tobacco and one part of the warehouse affected.”

The letter states that staff were not on-site at the time of the fire, and no lives were lost. It does not list the cause of the fire.

Video of the fire showed a large warehouse that appeared to still have tobacco in it, but images shared with Halfwheel show a mostly empty building with remnants of tobacco on the floor and tables as well as char marks around the walls and standing water on the floor.

In a subsequent video, Henderson Ventura of Tabacalera William Ventura and ADV & McKay Cigars Co. said that it is one of eight buildings at Inetab-Kaubeck and one that focused on Connecticut broadleaf and Pennsylvania tobaccos.

“We thank all emergency services present and [e]specially the fire departments from Moca and multiple other locations in the Cibao area for their assistance to the fire,” said Schumacher. “Thanks to their tireless efforts, it was controlled swiftly.”

September 3, 2024

Tobacco Reporter Recognized

Tobacco Reporter was recognized for editorial excellence in the Trade, Association, and Business Publications International’s most recent Tabbie competition.

The magazine received a bronze award in the Editor’s Column category for its “Developing Supplemental Value Chains” editor’s memo and an honorable mention in the Feature Article category for its “Broadening the Base” piece. Both articles deal with Malawi’s attempts to diversify its economy beyond tobacco.

Created two decades ago, the annual Tabbie Awards program celebrates journalists worldwide who cover their industries with passion, skill and creativity. The Tabbie Awards stands out from other similar programs in its distinctive global reach, with local, regional, national and international English-language publications in all countries encouraged to participate.

It’s not the first time that Tobacco Reporter’s work has been recognized in the Tabbie competition. Previous awards include gold, silver and bronze trophies for feature writing, along with honorable mentions in various categories.

September 3, 2024

ITGA to Hold AGM in North Carolina

The International Tobacco Growers Association (ITGA) will hold is 2024 annual general meeting (AGM) in Raleigh, North Carolina, USA, Oct.15-18. The event, which coincides with the organization’s 40^th anniversary, is hosted by the Tobacco Growers Association of North Carolina and brings together growers’ representatives and tobacco sector stakeholders from around the world.

Delegates to the meeting will visit an auction center, observe receiving station delivery, tour a processing plant, visit university and research farms and the North Carolina State Fair.

This year, ITGA’s focus is on farm productivity and tobacco yields. An extensive research effort revealed crucial variations between markets as well as between small scale and commercial growers. This will be the focus of the open day conference.

For more information, visit www.itgaevents.com.

September 3, 2024

Kicking Butt

With its plastic-free products goal at the forefront, Filtrona’s new filter technology allows for a sustainable RYO option.

By Marissa Dean

When thinking about filters, most people immediately picture pre-rolled cigarettes. They think of discarded butts and microplastics. But those images are changing as the industry evolves and consumers demand more sustainable options. Filtrona is working to fill those needs with its recently debuted trademarked Rip-a-Tip plastic-free filter for the roll-your-own (RYO) market.

“Made entirely from cellulose, the Rip-a-Tip is designed with convenience and configurability in mind,” says Filtrona CEO Robert Pye. Cellulose is a naturally occurring molecule made up of carbon, hydrogen and oxygen, and it is found in plant cell walls as part of the main structure. Being made completely of cellulose means that the filters will break down entirely upon disposal—removing the potential of microplastics leaching into the environment.

The product is also highly customizable. “It also gives RYO tobacco companies the freedom and options to customize the filter to a preferred diameter, pressure drop and choice of substrate—such as white or unbleached sustainable materials,” says Pye.

“In practical terms, each Rip-a-Tip stick is expertly crafted to hold six individual filter tips measuring 14 mm in tip length. Rip-a-Tip features the EasyRip System, which allows users to rip off the filter tips easily and quickly along the perforated line. This not only delivers an easy and enjoyable user experience but also importantly ensures there is no wastage after the filter tips are ripped off from the outer wrap,” Pye says.

According to Pye, the outer wrap of the product can also be customized with color or print, and the design of the packaging boxes for the filters, which come in flip top, cigarette, push and slide, and side push and slide formats, can be customized.

A Sustainable Future

Like most companies, Filtrona has environmental, social and governance goals that it aims to reach every year. By 2050, Filtrona’s goal is to offer a complete portfolio of plastic-free products.

The Rip-a-Tip supports that goal as “a biodegradable RYO filter solution that meets growing consumer regulatory demand for tobacco products grounded in sustainability,” according to Pye. It “marks an exciting material advancement in the RYO market,” which is expected to reach $45 billion in global value by 2033.

Along with the Rip-a-Tip filters, Filtrona has also launched its trademarked Boreas range of heated-tobacco product (HTP) filters, filling a market need as more consumers switch from traditional combustible cigarettes to HTPs and other reduced-risk products.

The new range includes Boreas SideFlow, a patent-pending filter with a simplified design, and Boreas CoolBridge, a filter that combines Filtrona’s sustainable cooling segment, ECO Bridge, with monoacetate and the company’s patented Fine Wall Acetate Tube to create a balanced retention and cooling mechanism.

“With this new Boreas range,” says Pye, “we are giving customers the option to create a customized, multi-segment filter by combining various types of base rods that are available in Filtrona’s comprehensive collection. As more of our customers move into the rapidly growing HTP market, we are thrilled to be able to support our customers with a dedicated range of HTP filters that bear the hallmark of our innovative and unique designs.

“As consumer demand for HTPs continues to grow, our new Boreas range will enable HTP manufacturers to deliver the next generation of products that deliver the expected level of quality and user experience compared to conventional cigarettes while also meeting regulatory requirements.”

What’s Next?

The industry is constantly changing and evolving as regulations, requirements, health concerns, environmental concerns and consumer desires morph. According to Pye, Filtrona is well positioned to cater to the rapidly changing business environment.

“We have a century of filtration experience and chemistry delivery expertise at Filtrona, coupled with an unparalleled drive for innovation and R&D and world-class global manufacturing capabilities,” Pye says. “In addition, our Scientific Services laboratories in Indonesia offer independent and accredited testing facilities for all our products.

“Our industry knowledge helps companies to catch emerging trends, adapt to changes and build strong brands. We see an exciting future ahead in the industry where Filtrona will play a significant role in driving change and enabling business growth through product innovations, advanced technology and sustainable solutions.”

Marissa Dean joined Tobacco Reporter in the summer of 2018 as a copy editor. Since that time, she has taken on additional responsibilities, including feature writing. Her skills span the publishing industry from layout and design to copy editing to content creation.

September 1, 2024

Rewriting the Rules

Will the next EU Tobacco Products Directive embrace harm reduction?

By Stefanie Rossel

Things may take a bit longer in Brussels. The European Commission (EC) started preparations in 2021 to revise its Tobacco Products Directive (TPD), but the process remains in its evaluation phase, with an impact assessment expected in 2025.

The commission’s draft proposal is anticipated in late 2025. By 2027 or 2028, member states are expected to implement the new legislation. Shaping the new policy will be the job of the next commission. In June 2024, the common market elected a new European Parliament for the next five years.

The TPD currently under evaluation was issued in 2014. While already covering vape and heated-tobacco products in addition to traditional cigarettes, it does not include products that emerged after the legislation was adopted, such as nicotine pouches. How these and other novel nicotine products will be regulated in TPD3 remains the subject of speculation.

“We know only that the evaluation phase should have long been concluded,” says Jan Muecke, managing director of the German Association of the Tobacco Industry and New Products. One reason for the delay, he suggests, could be the EU ombudsman’s investigation of the commissioning of the European Network for Smoking and Tobacco Prevention (ENSP), which advises the EU Commission in the evaluation process. As a network of anti-tobacco nongovernmental organizations, the ENSP can’t be objective, according to Muecke.

Muecke expects the new commission, which will take up its official duties this autumn, to close the evaluation and push for far-reaching changes to the directive. The question, he says, is whether these changes will include a recognition of tobacco harm reduction (THR). While proponents claim novel nicotine products are significantly less harmful than combustible cigarettes and should therefore be treated differently, the EU, which has ratified the World Health Organization Framework Convention on Tobacco Control, insists that “less harmful” means “still harmful” and worries about yet-unknown long-term health effects and the protection of youth.

Missing Its Target

However, critics contend that continuing the existing approach or adopting an even more hostile stance toward novel nicotine products may prevent the EU from achieving its goal of a “‘tobacco-free generation” (defined as a smoking prevalence of less than 5 percent) by 2040.

According to the most recent Eurobarometer survey, the EU smoking rate decreased by only 1 percent between 2020 and 2023. At 24 percent, nearly a quarter of EU adults still smoke cigarettes. Since the TPD took force in 2016, EU smoking prevalence has fallen 3 percent. At this pace, the advocacy group Clearing the Air calculated, the EU will reach its tobacco-free goal 70 years after the target date.

“So far, EU tobacco policy has been focusing on paternalism against consumers, manufacturers and retailers,” says Muecke. “As this approach has not led to any relevant results, a real strategy change is needed. Instead of plain packaging and high taxes, politics should actively promote smokers’ switching to less hazardous products such as vapes, THPs [tobacco-heating products] or pouches. By having chosen such an approach, Sweden will soon have reached the status of a smoke-free nation. For such a reorientation of politics, however, a lot of persuasive efforts in Brussels will be required. But recently, there were very few signals from the EC that it might dare turn away from its regulatory approach of ‘quit or die.’ The civil servants in Brussels still consider e-cigarettes and the likes as a problem and not as part of the solution.”

“The big takeaway point from Eurobarometer is that there isn’t a hope of the EU achieving its smoke-free or tobacco-free targets, particularly when they continue to demonize safer nicotine products, which actually help people quit smoking,” echoes Damian Sweeney, a partner in the European Tobacco Harm Reduction Advocates (ETHRA), a consumer advocacy group. “It’s important to keep in mind that policymakers may not be aware of the detail in reports like Eurobarometer and certainly not success stories like Sweden and the U.K. This is why advocacy is so vital to educate policymakers and make them aware of what can and does work in reducing the burden on health from smoking.”

Nevertheless, Sweeney is cautiously optimistic about TPD3 as there seems to be a growing number of Members of Parliament (MEPs) that understand the concept of tobacco harm reduction. In a February 2022 report, for example, the European Parliament’s Special Committee on Beating Cancer (BECA) acknowledged the concept of harm reduction.

“Of course, the BECA report and the more recent report from the subcommittee on noncommunicable diseases, which adopted the same language as BECA in relation to safer nicotine products, is a positive in that respect,” says Sweeney. “Both reports are useful tools that advocates can utilize when speaking to MEPs about the role of SNPs in reducing smoking. It is important to note that we do not see these positive signs replicated in the European Commission.”

At this pace, the advocacy group Clearing the Air calculated, the EU will reach its tobacco-free goal 70 years after the target date.

More Stringent Rules Anticipated

If common sense does not prevail, the EC’s draft proposal will likely contain considerably stricter regulations for all product categories, according to Muecke. “Brussels could try to introduce standardized rules that completely ignore product-specific characteristics,” he says. “The regulation of nicotine products according to their harm potential, as it was partly introduced for e-cigarettes in the current TPD, is also likely to be put to the test. Furthermore, the EC will try to anticipate the development of new products in their regulations. Tobacco-free nicotine pouches don’t fall into the scope of the TPD, which is why many member states in recent years felt obliged to pass their own regulations. The EC will try to prevent such a development for future innovations. This is something we must pay particular attention to because innovation should always be possible.”

With vape flavors increasingly under scrutiny, Sweeney thinks it’s possible that the commission will propose a flavor ban. “This is where advocacy and building relationships with members of the European Parliament will be key, as proposals will have to be debated and voted on in committee and in the European Parliament as a whole,” he says.

In June, EU health ministers discussed proposals by Latvia and Denmark to restrict flavors in vapes and nicotine pouches. The current TPD allows member states to set their own rules for flavors. Denmark, Estonia, Finland, Hungary, Lithuania, the Netherlands and Slovenia already ban vape flavors. Spain recently completed a public consultation on the topic; Latvia reportedly is in the process of introducing flavor restrictions.

“It’s very concerning that member states would attempt to pressurize the commission to bypass the ongoing review of the TPD, but I don’t expect to see any actions at an EU level before the TPD,” says Sweeney. “Ahead of the June meeting, ETHRA wrote to all EU health ministers to highlight the serious unintended consequences of banning flavors: increase in smoking through reduced adult switching and increased relapse from vaping to smoking, a growing black market for flavored products, and potentially dangerous consumer workarounds, such as DIY [do-it-yourself] mixing, which can carry some risks.”

“Tobacco harm reduction shouldn’t be a right/left issue—it’s a people issue.”

Damian Sweeney, partner in the European Tobacco Harm Reduction Advocates

Pouches in Peril

According to a commission spokesperson, snus will be part of the directive’s evaluation, but neither Muecke nor Sweeney expect the EU to legalize the product, which has been banned throughout the EU, except in Sweden, since 1992. “Sweden is on the verge of becoming smoke-free, 16 years ahead of the EU’s target, and snus has played a key role in that,” says Sweeney. “This success story could be emulated across the EU if the ban on snus was lifted; unfortunately, I can’t see that happening, and there’s a possibility the ban could be extended to nicotine pouches.”

Prohibiting the latter would be difficult, however, according to Muecke, as nicotine pouches are already available in 16 member states.

Despite increasing calls to ban disposable vapes, Sweeney expects single-use e-cigarettes to remain legal in the next TPD. However, the products are likely to disappear from the market anyway due to the EU Battery Directive, which will ban single-use batteries. “Manufacturers are already adapting and moving toward disposable-style devices that are rechargeable.”

Whether the recent EU election, in which the center-right European People’s Party (EPP) gained seats, will impact TPD3 remains to be seen. “As far as tobacco harm reduction and the availability of safer nicotine products is concerned, this is a positive move as the EPP have been supportive of THR,” says Sweeney. “But I think it’s important to remember that THR isn’t and shouldn’t be a right/left issue—it’s a people issue. As advocates, we need to bring as many people as possible on board—no matter what their political leanings are.”

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.

September 1, 2024

Unwavering Commitment

Innovation, integrity and excellence remain at the core of SWM’s business under the company’s new ownership.

TR Staff Report

In late 2023, a relatively unknown company in the tobacco business, Evergreen Hill Enterprise, purchased the world’s leading supplier of cigarette paper, SWM International, from Mativ Holdings, which had decided that SWM’s tobacco focus would present a more attractive value proposition under new strategic ownership.

Headquartered in Singapore, Evergreen Hill Enterprise is part of an Indonesian-based privately held group of companies serving the tobacco, banking and consumer electronics industries, among other sectors. One of its affiliates is BMJ, a supplier of tobacco packaging and paper with a strong presence in Asia, but the partners made clear that SWM and BMJ would continue to operate independently.

Tobacco Reporter caught up with SWM President and CEO Katrin Hanske to learn what the deal has brought to SWM and its customers.

What have been the biggest changes in SWM’s day-to-day operations since Evergreen Hill Enterprise announced its acquisition in August 2023?

Nothing has changed because they don’t intervene in our day-to-day operations. SWM International is the same company everyone knew before. We still have the same values and culture that our customers, suppliers, partners and employees trust and appreciate. We haven’t changed from a cultural or value perspective, upholding the principles that define how we think, work and interact.

After transitioning from a publicly traded to a privately held company, we relocated our headquarters from Alpharetta to Luxembourg. This shift has granted us greater flexibility to pursue key market opportunities and streamline our strategic decision-making process.

Our priorities remain focused on our customers, unwavering commitment to innovating the industry, empowering our employees, maintaining integrity and striving for excellence in everything we do.

What steps have been taken thus far to integrate SWM into Evergreen Hill Enterprise’s operations?

The acquisition was not focused on integrating SWM but on strengthening Evergreen’s presence in the tobacco market. As a result, we do not have synergies or shared resources with Evergreen or BMJ.

Have there been any senior personnel changes in the wake of the acquisition?

The answer is no. In fact, we have retained our leadership team to ensure continuity, stability and expertise. This stability and accumulated generational knowledge allow us to create high-performance products and tailored solutions.

What advantages has the acquisition brought to SWM customers thus far? What additional benefits do you expect them to receive from the deal in the future?

Our focus is accelerating innovation to support our customers’ journey toward reduced-risk products and sustainability. We do this by optimizing the properties of botanicals, natural fibers and lightweight paper solutions. We continue to invest in innovative products and sustainability efforts along the supply chain. This directly benefits our customers, as they can expect us to remain at the forefront of innovation, committed to sustainability and with a strong presence in all geographies.

Does the backing of Evergreen Hill Enterprise enable SWM to pursue projects that it wasn’t able to pursue before? Please explain.

Clearly, we see a significant benefit now of aligned interest in being successful in the tobacco market, allowing us to pursue projects faster than before but also being strategically aligned with the agenda/requirements of our customer base. This includes our recent commitment to the SBTI [Science-Based Targets Initiative] decarbonization program,* which aims to significantly reduce the environmental impact of our operations.

Evergreen Hill Enterprise is also affiliated with BMJ in Indonesia. What do you consider to be the respective strengths of SWM and BMJ? In what respects do they complement one another? What will be the relationship between SWM and BMJ under the Evergreen Hill umbrella?

SWM International and BMJ continue to compete in the marketplace. SWM International is well positioned to support the industry’s shift to reduced-risk products, with a strong presence in the Americas and Europe. BMJ, on the other hand, has a significant foothold in Asia. As a result, looking from the outside, we complement each other with respect to our geographical presence and our product portfolio.

How have customers responded to the acquisition?

The transition to private ownership has been well received by our customers. They see the benefits of our increased focus on meeting their needs within the nicotine and tobacco industry.

What segments of the tobacco paper market will SWM prioritize going forward? Please explain.

SWM International prioritizes customer needs and aligns with their goals. In the traditional/legacy combustible segments, we emphasize performance, high quality and competitive pricing. Our innovation efforts focus on next-generation products as well as offering more sustainable solutions for our existing portfolio.

Are you considering diversification into adjacent categories, given the long-term outlook for tobacco consumption—or is the acquisition an opportunity to double down on your tobacco focus? Please elaborate.

Our company’s proficiency in developing light[weight] and ultra-lightweight papers with specific functionalities extends our reach beyond the tobacco industry. We offer intelligent, sustainable, flexible packaging solutions that are free from plastic and provide barrier effects, heat-seal capability and customizable features. Additionally, our expertise in filtration characteristics presents further opportunities for innovation.

What is next for SWM in terms of manufacturing, product innovation and sustainability?

Our commitment to science-based innovation, manufacturing excellence and the ingenuity of our people drives us to continually develop more sustainable filters that meet taste and sensory expectations. Our scientists and research and development teams collaborate closely with customers to design products with reduced health and environmental impacts. Simultaneously, our operations focus on decarbonizing manufacturing, improving asset efficiency and expanding capabilities to accelerate innovation.

The industry can rely on our dedication to delivering sustainable solutions while maintaining high product quality.

September 1, 2024

Testing the Waters

Philip Morris International is getting ready to reintroduce IQOS in the US.

By Stefanie Rossel

During its 2024 second-quarter financial results presentation on July 23, Philip Morris International at last confirmed the long-awaited reintroduction of its IQOS heated-tobacco product (HTP) in the U.S. In the fourth quarter of this year, the company will start test marketing its IQOS3 device in Austin, Texas, according to PMI Chief Financial Officer Emmanuel Babeau.

A large-scale launch of IQOS, he stressed, will take place only after the Food and Drug Administration has authorized PMI’s most recent model, IQOS Iluma, which the company expects to happen in the second half of 2025.

The company submitted premarket tobacco product applications (PMTAs) and modified-risk tobacco product (MRTP) applications for Iluma in October 2023. Until Iluma’s FDA marketing authorization, Babeau said, the company will sell its IQOS3 model in only a few U.S. cities, primarily to fine-tune its approach in anticipation of the nationwide introduction of IQOS Iluma.

Once it has secured FDA approval for Iluma, the company will apply the IQOS marketing strategy that has been successful internationally, with some tweaks for the U.S. market. Among other things, this will involve engaging with consumers to explain the product, creating a dedicated sales force and setting up its own points of sale.

The 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 in the fourth quarter of 2019. One-and-a-half years later, IQOS was available in Georgia, Virginia, North Carolina and South Carolina. But plans for further commercialization were interrupted when the International Trade Commission (ITC) upheld a claim by BAT that IQOS products infringed two patents owned by British Tobacco America Group.

In September 2021, the ITC ordered Philip Morris and Altria to stop importing and selling IQOS models 2.4, 3 and 3 Duo and their respective heat sticks. PMI then agreed to pay Altria $2.7 billion to take back the U.S. commercialization rights of IQOS as of April 30, 2024. In February 2024, PMI and BAT resolved all ongoing intellectual property disputes related to the former company’s HTP and vapor products.

In 2020 and 2022, the FDA issued modified-risk granted orders for IQOS model 2.4 and model 3, respectively, as well as for three heat stick variants. These orders are valid for a fixed period. To continue marketing the MRTPs after the authorized term, the company in May 2024 applied to renew its IQOS3 exposure modification order.

IQOS is the only HTP in the U.S. that has been granted not only a PMTA but also MRTP authorization.

Pieter Vorster, managing director, Idwala Research

Market With Potential

PMI’s selection of Austin for its 2024 pilot may be a smart move, according to Pieter Vorster, managing director of Idwala Research. “Austin is known for having a vibrant tech industry, attracting young, tech-savvy people open to new technologies and innovation,” he says. “I suspect that the regulatory environment might also be somewhat less restrictive. Furthermore, PMI likely wanted to have a clean slate concerning product awareness.”

Furthermore, Texas has a low cigarette tax rate, and IQOS will be taxed there as cigarettes, which will give PMI a clue how the product would perform when taxed similarly to cigarettes, according to TobaccoIntelligence. A progressive university town in an otherwise conservative state, the city also provides a unique variety of demographics. “This likely means that PMI will be able to assess IQOS’ attractiveness to an array of adult testers in a small area,” says Vorster.

Expectations are high for IQOS’ nationwide rollout. Euromonitor expects the market for smokeless tobacco and smokeless alternatives to increase from $23.49 billion in 2022 to $32.05 billion in 2027, eating into the share of traditional cigarettes. The company predicts that the value of cigarettes, which currently account for most tobacco product sales, will drop by 30 percent from $97.80 billion to $68.37 billion during that period. Investors are waiting to see whether PMI can create a heated-tobacco market in a country where vapes dominate the sales of electronic nicotine-delivery systems.

Vorster is optimistic, noting that the U.S. with its nearly 30 million smokers is significant for PMI’s transition strategy toward a smoke-free future. “The U.S. is one of the largest and most profitable markets for nicotine products globally,” he says. “Since PMI has no presence in cigarettes, it won’t be cannibalizing its own cigarette business. IQOS is the only HTP in the U.S. that has been granted not only a PMTA but also MRTP authorization by the FDA. Furthermore, very few vaping products have been given PMTAs, although this benefit is clouded by the rampant sales of illicit disposable vapes.”

PMI aims to capture 10 percent of U.S. tobacco and HTP unit volume by 2030. While he does not consider the 10 percent target overly ambitious, Vorster lists a few caveats. “Vapers are unlikely to switch to an HTP as they would view it as a regressive step, closer to going back to smoking,” he says. “However, this could be influenced by the regulatory environment. If the current pace of PMTAs for vaping products is maintained and the sale of illicit, disposable vapes can be reduced significantly—which is unlikely in my view—then some vapers might be motivated to switch to IQOS. In the absence of what I described, new IQOS consumers will likely come from the smoking population, where the relatively high average nicotine content of cigarettes sold in the U.S. represents a significant hurdle for HTPs and, in particular, for the IQOS products that are currently authorized in the U.S.”

If the U.S. bans menthol cigarettes, notes Vorster, the smokers of those products could represent a significant potential source of new IQOS consumers, provided IQOS’ menthol variants are allowed to stay on the market.

Stepping Up Production

In its second-quarter results, PMI estimated that more than 36 million people globally use the company’s smoke-free products. In the first half of 2024, PMI’s volume growth was driven by smoke-free products. The company shipped 68.7 billion HTP consumables units, an increase of 16.8 percent versus the previous year. This compares to 300.8 billion cigarettes, which grew by a mere 0.1 percent year-on-year. Shipments of oral smoke-free products increased 27.4 percent compared to 2023, up to 8.4 billion units. Zyn, PMI’s modern oral nicotine product, which became part of its portfolio through the company’s 2022 acquisition of Swedish Match, has grown exponentially and now dominates the U.S. nicotine pouch category. The product is so popular that PMI has been struggling to keep up with demand.

However, Zyn has also attracted regulatory scrutiny. In response to a subpoena from the District of Columbia attorney, PMI in June suspended online sales of flavored Zyn variants on its U.S. website. In March, a law group in California filed a lawsuit against the company, claiming that PMI is targeting children and young adults with its flavored nicotine pouches.

“Given the current trajectory and historical parallels with Juul, Zyn’s future will involve navigating through heightened regulatory scrutiny and social challenges,” says Vorster. “PMI’s ability to adapt its strategies, ensure regulatory compliance and address public concerns will be pivotal. If PMI can successfully manage these issues, Zyn could stabilize and continue to grow, albeit at a potentially slower pace. However, if the regulatory and legal pressures intensify, PMI might face significant hurdles that could hinder Zyn’s market expansion and profitability.”

Swedish Match filed for a PMTA for Zyn in March 2020, but as of August 2024, the FDA had not decided on this application. “The delay in the FDA’s response to Zyn’s PMTA is likely due to a combination of high application volumes, resource constraints and the complexity of the review process,” says Vorster. “Current issues such as social backlash, regulatory scrutiny and legal challenges will significantly impact the FDA’s decision, potentially leading to more stringent regulations and conditions for approval. The FDA’s continued reliance on a scientific study that concluded that nicotine is harmful to developing brains means that products that are perceived to have youth appeal will find it hard to get approved as ‘for the protection of public health.’”

While the regulatory approval process is outside its control, PMI has started tackling the product shortages by investing in production. On July 16, the company announced that it would invest $600 million to open a manufacturing facility in Aurora, Colorado, to produce Zyn pouches. The plant is expected to start preliminary operations in late 2025 and regular production in 2026. It will create 500 jobs. PMI is also increasing production of Zyn at its Owensboro, Kentucky site. Apart from meeting U.S. demand, the investments will help create capacity for export, the company said.

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.

September 1, 2024

Ensuring Excellence

The critical role of site visits and quality controls in behavioral science research

By Elizabeth DeMartini

In the ever-evolving field of behavioral science research, ensuring the integrity and reliability of data is a critical aspect of quality research. This article details the importance of study site visits and quality controls in maintaining high research standards and ethical conduct for direct interactions between study site staff and participants when conducting behavioral studies, such as in-person consumer perception and intentions, label comprehension and human factors, actual use and switching, product use patterns, and abuse liability.

Study site staff are directly engaging with participants during recruitment and screening for eligibility, explaining and gathering signatures for the informed consent forms, study product administration, data collection and general communication with participants. There are times prior to or during study conduct where important study execution information, which may seem clear to researchers intimate to a project, may be missed or unclear to study site staff. This could lead to issues with data quality and compliance.

This potential knowledge gap can be alleviated by having a regular on-site and virtual presence and directly collaborating with the study site staff throughout the study with increased oversight during key study milestones. With this, stakeholders can ensure successful project implementation while maintaining the integrity of each individual research project.

The Role of Site Visits in Research Integrity

Study site visits are a fundamental aspect of research oversight, serving multiple functions that collectively uphold the integrity of research studies. These visits facilitate direct interaction and collaboration between the research team and study site staff, allowing for real-time monitoring and support. Here are key reasons why site visits are indispensable:

Training and Support—Study site staff play a vital role in the successful execution of studies. The study site’s proper understanding of the study outcomes and methods enhances the quality of the data collection processes, communication between all parties, compliance requirements and overall health of the study. The study site staff will be intimately involved in the project from start to finish, and it is of utmost importance that they are well versed in study protocol, data collection methods and ethical considerations. Being on-site allows researchers to educate the study site staff through each step of the study. Many projects involve study products that participants are trained to use. For study site leaders to train these participants, researchers must feel confident that they have trained each research site well. Being on-site at these trainings allows for a hands-on approach, enhancing the competency of the study site staff and fostering a collaborative environment where questions and concerns can be addressed promptly.

Ensuring Protocol Compliance—Adherence to institutional review board-approved study protocols is crucial for the validity and reliability of research findings. Site visits oversee and verify that study procedures are being followed as outlined. This helps identify deviations or noncompliance issues early, allowing for timely corrective actions. Researchers’ presence on-site throughout project milestones ensures that the study site staff feels confident in implementing these critical study procedures. Remote monitoring of adverse events and clinical assessments of side effect severity related to research study product use is a critical responsibility. It is good practice to have a medical monitoring team on call for this service. Consistent with the informed consent form, participants should be educated on what adverse events may be and when to call, and encouraged to always err on the side of caution. By providing this surveillance, researchers can detect any potential safety concerns and address the next steps promptly.

Building Relationships—Face-to-face interactions during site visits strengthen the relationship between the central research team and site personnel. This is essential for effective communication and coordination throughout the study. A strong relationship facilitates smoother operations and encourages site staff to proactively report issues and seek guidance when needed.
Many contract research organizations view study sites mainly as a transactional engagement, often with limited oversight. However, this approach is fundamentally short-sighted. The strength and integrity of a study’s data hinge on the meticulous execution of the research protocol, which can only be achieved through genuine, trusted partnerships with study sites. By fostering collaborative relationships and investing in mutual trust, organizations should ensure that the research is conducted with the highest level of precision and dedication. This partnership-based approach not only enhances the quality of data but also drives successful outcomes that meet both regulatory standards and the nuanced needs of clients.

Assessing Facility Capabilities—Evaluating the layout of the research sites infrastructure and assessing their capabilities is a necessary component of site visits. Research protocols include standards for product storage, document storage, product disposal, and in some cases survey administration. By being on-site, research organizations can assess the facility’s capabilities and preparedness to ensure they are complying with all regulations. Site visits can also help the research team work with the study site staff to create a comfortable flow and environment for participants engaging in the research. A proper study environment is necessary to produce high-quality data.

Quality Controls in Research: A Multidimensional Approach

Quality controls are the backbone of any research endeavor, ensuring that the data collection is accurate, reliable, robust and valid. In the case of social and behavioral science research, quality controls encompass a range of activities designed to maintain high standards and ethical conduct. Key aspects of quality control include:

Data Integrity—Maintaining the integrity of data collected during a research study is essential for producing credible results. Professional research organizations employ an in-house survey methodologist who is responsible for a multitude of quality control measures surrounding data integrity, including validation checks built into the survey and real-time data audits with daily reports on any data that would reflect any discrepancies. The survey methodologist works closely with the team and sites throughout each step of the entirety of the research process and especially during the first days of study implementation, confirming correct participant eligibility, assignment and data quality.

Ethical Conduct—Upholding ethical standards in research is a fundamental principle. Quality assurance processes are designed to ensure that all study activities are conducted with a focus on human subject protections. This includes obtaining informed consent, ensuring confidentiality and conducting research in a way that respects participants’ rights and dignity, which the study site staff are trained prior to and on the same day as first-participant-in.

Challenges and Solutions in Implementing Site Visits and Quality Controls

Despite the clear benefits, implementing site visits and quality controls can present challenges. Addressing these challenges requires a proactive and adaptive approach.

Resource Constraints—Conducting site visits and maintaining rigorous quality controls are essential components of any successful study, but they can be resource-intensive endeavors. Adequate funding, staffing and logistical support are crucial to carrying out these activities effectively. Medical monitoring teams play a pivotal role in this process, ensuring that every site adheres to the highest standards of patient care and protocol compliance.
To address these challenges, research organizations should focus on optimizing resource allocation, ensuring that their teams are well supported and strategically deployed geographically. Leveraging technology for remote monitoring allows organizations to maintain oversight without the need for constant physical presence, which not only conserves resources but also increases agility in responding to emerging issues.

Geographical Barriers—Research studies often involve multiple sites across diverse geographic regions, making the logistics of conducting frequent site visits a significant challenge. To address this, it is advisable to employ a risk-based approach to site selection, prioritizing visits based on project timeline milestones and the specific needs of each study. This strategic approach ensures that resources are directed toward the most critical sites where oversight can have the greatest impact.
Professional contract research organizations place a strong emphasis on rigorous project management across multiple geographic regions. This involves close collaboration with the institutional review board, whose oversight and guidance should be integral to the organization’s approach. Oversight plans should involve initial site evaluations, frequent and transparent communication between sites and the research team, and ongoing supervision to uphold protocol integrity and data quality. By integrating these elements into the project management plan, organizations can maintain consistency, compliance and excellence across all study sites, no matter where they are located.

Standardization Across Sites—Ensuring consistency in study conduct across multiple sites is crucial for data comparability. Developing comprehensive procedures and conducting training sessions can help standardize procedures. Regular communication and site support also play a vital role in maintaining consistency. For example, with the research team’s presence on-site during first-participant-in, the research team can provide oversight and intervene to correct any errors in study administration, and the study site staff are able to discuss any questions they may have in real time. This allows for high-quality compliance to be achieved. It also allows the research team to address reoccurring issues and modify their site training materials to be more comprehensive for all study sites.

Evolving Regulatory Requirements—Regulatory landscapes are dynamic, with frequent updates and changes. Staying abreast of regulatory requirements and ensuring compliance can be challenging. Engaging with regulatory bodies, participating in industry forums, and continuous education for study site staff are effective strategies to navigate regulatory complexities.

Conclusion

The importance of site visits and quality controls in behavioral research cannot be overstated. These practices are essential for ensuring the integrity, reliability and ethical conduct of research studies. By fostering close collaboration between the central research team and study sites, providing thorough training, support, availability, strong relationships, as well as implementing robust monitoring and quality assurance processes, contract research organizations can ensure that their research endeavors produce credible, high-quality data that advance innovation and regulatory compliance in the nicotine industry. Ultimately, these efforts contribute to the overarching goal of protecting human subjects, quality data collection and enhancing public health outcomes.

Elizabeth DeMartini is a medical monitor and researcher at Applied Research and Analysis Co. (ARAC). She brings a wealth of experience from diverse roles in the healthcare and wellness sectors spanning the last two decades.

An alumna of James Madison University, DeMartini holds a Bachelor of Science degree in nursing. Demartini is a licensed registered nurse through the Virginia Board of Nursing and is authorized to practice in 38 additional U.S. states. Together with Brianne Becht, DeMartini initiated ARAC’s medical monitoring team, enhancing standardization with on-site facility trainings, clinical assessments and compliance oversight.

ARAC is a social and behavioral sciences research firm known for designing, executing and presenting creative, customizable Module 5 and 6 studies to support manufacturers, regulatory agencies and industry consultants. The fully staffed contract research organization employs in-house psychologists, behavioral scientists, statisticians and survey methodologists.

ARAC’s data-driven approach ensures rigorous, evidence-based insights to support innovation and regulatory compliance in the nicotine industry.

The ARAC team services clients worldwide in product development and consumer research supporting innovation and “next-generation” products, with focused expertise on the regulatory sciences for U.S. applications, including ITPs, premarket tobacco product applications, modified-risk tobacco product applications and substantial equivalence applications.

September 1, 2024

Rebuilding the Value Chain

Tabaterra wants to lift Azerbaijani tobacco to global quality standards.

In addition to investing in cigarette production, Tabaterra has been working to revive Azerbaijani tobacco cultivation. During Soviet times, the republic was a prominent leaf producer, but that activity fell by the wayside as the USSR disintegrated and its value chains perished. To diversify its economy beyond oil and gas, Azerbaijan has been reviving tobacco production, boosting rural employment and developing new sources of export revenue.

Instead of growing the local semi-oriental varieties previously cultivated for the Soviet market, the new efforts focus on flue-cured Virginia (FCV), which enjoys demand worldwide. In 2021, Tabaterra Leaf started operations with four receiving and curing stations, 10 greenhouses and a green-leaf threshing (GLT) factory along with a laboratory for physical tests.

Since then, it has been working to increase yields and quality along with farmer incomes. “Our goal is to bring Azerbaijani leaf up to international standards,” says Ibrahim Mammadov, Tabaterra Leaf’s head of finance. “We want to build a brand for the country.”

While acknowledging that Azerbaijan is not in the same league as flavor tobacco powerhouses like Zimbabwe and Brazil, Mammadov is confident of the nation’s long-term potential in the global filler market. By providing inputs tailored to the local soils and by promoting proper agricultural practices, Tabaterra has been gradually increasing nicotine and sugar levels.

It has also improved farmer viability. When the company entered the market, tobacco growers were making azn500 ($294.13) per hectare on average, according to Tabaterra Director Elman Javanshir. This year, the per-hectare profits of its contracted farmers, including government subsidies, are expected to reach azn2,000. “So we have quadrupled their profitability in three years,” says Javanshir. The company is also providing its contracted growers with pesticides and personal protective equipment free of charge.

Such improvements will help Tabaterra not only to retain its farmer base, but they also put farmers in a better position to attract and retain labor. Azerbaijan’s northwestern region is famous for its hazelnuts, which are harvested at the same time as tobacco, thus creating fierce competition for farmhands in August and September.

Because the GLT was in good condition at the time of its acquisition, Tabaterra only needed to perform a few upgrades. It also constructed a chemical laboratory to help it keep track of its progress in improving Azerbaijani tobacco to the desired quality standards.

This year, Tabaterra is cultivating tobacco on 700 hectares, mainly in northwest Azerbaijan. But the company also plans to revive tobacco production in the Karabakh region. According to Javanshir, there are natural restraints on the growth of tobacco in the northwest of Azerbaijan, including temperatures and dropping water levels—an important consideration given that tobacco is a thirsty crop.

In the new areas, by contrast, there is plenty of water. “The rivers there don’t dry up during the summertime like they do in the northwest,” says Javanshir. “Considering the abundance of water resources there, we think we can grow better quality tobacco there—not only Virginia but also burley and some of the other varieties.” The company aims to grow up to 800 hectares in the new areas.

Along with Ethiopia and Uzbekistan, Azerbaijan is one of a handful of countries where tobacco growers sell their leaf “wet,” i.e., uncured. With average property sizes of between 7 hectares and 8 hectares, Azerbaijani tobacco farms are relatively large, but few growers own curing barns. To boost quality and minimize losses, Tabaterra is encouraging farmers to apply good agricultural practices (GAP). “If they follow GAP, the product will come out of the barn properly, without the brown tobacco that nobody wants,” says Mammadov. Getting long-time growers to change their work habits can be challenging, however. Because farmers’ responsibility ends with the harvest, they tend to be more interested in volume than quality. For example, they may plant the tobacco too densely or skip steps such as topping or sucker control, which they view as costs rather than investments.

“By reducing the in-row spaces, farmers think they can plant more tobacco and boost their yields, but if you increase the row space, it will make your leaves bigger, and you will get the same weight—plus higher nicotine levels,” says Mammadov. And while skipping topping and sucker control may seem like a labor-saving strategy, it causes the plant to direct its energy toward producing organic material rather than flavor. “You get more leaf but lower quality,” says Mammadov.

Aware that showing is often more effective than telling, Tabaterra has established demonstration plots throughout its sourcing areas where the tobacco growers can see for themselves what happens with best practices. In addition, the company is providing financial incentives. If the grower plants with proper spacing, applies the appropriate amounts and formulations of fertilizer, and carries out the required topping and sucker control, he will receive a bonus on top of the agreed price.

Azerbaijan’s leaf tobacco business has come a long way in a short time. Already, it has managed to sell some of its leaf on the international market through a leading tobacco merchant. At the same time, Tabaterra knows there’s still a ways to go. With each growing season, however, the company’s contracted farmers gain skills and experience, and Mammadov is confident that in time, more global customers will find their way to Azerbaijan. “We are now in the third year of our project,” he says. “We hope this will be our best year yet.”

Taco Tuinstra is Tobacco Reporter’s editorial director. Based in Raleigh, North Carolina, USA, he coordinates the work of staff writers and contributors. On his watch, Tobacco Reporter has won several awards for editorial excellence. Since joining the magazine in 1997, Taco has visited more than 75 countries to meet industry representatives in their markets and to report tobacco news firsthand.

September 1, 2024