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Survey Details Advocacy for Safer Nicotine

Image: Andrii Yalanskyi | Adobe Stock

Knowledge-Action-Change (KAC) has released a global survey investigating the role and activities of consumer organizations advocating for access to safer nicotine products (SNPs) and tobacco harm reduction.
Carried out by KAC’s Global State of Tobacco Harm Reduction project, the research was published in Public Health Challenges.
It reveals that there are 54 active consumer advocacy groups working around the world to raise awareness about, and promote the availability of and access to, SNPs, which include nicotine vaping products (e-cigarettes), Swedish-style snus, nicotine pouches and heated-tobacco products.
The authors of the survey found that the vast majority of organizations (42) were operated entirely by volunteers, most of whom had successfully quit smoking with the help of SNPs.
Only seven of the groups had any contracted or paid staff (13 people globally), and for the last full year, the total funding for all organizations surveyed amounted to $309,810. This is in stark contrast to the millions of dollars spent on campaigns by actors, such as Bloomberg Philanthropies, seeking to limit access to SNPs, such as nicotine vaping products. The paper also notes that none of the consumer advocacy organizations reported receiving funding from tobacco or pharmaceutical companies.

This paper starkly demonstrates the major imbalance in resources available to consumer organizations advocating for access to safer nicotine products and those opposed to tobacco harm reduction, unfairly skewing the debate.

Gerry Stimson, director, KAC

Many of these organizations are members of four regional umbrella organizations covering Latin America (ARDT Iberoamerica), Africa (CASA), Europe (ETHRA) and Asia-Pacific (CAPHRA).
“This survey offered a unique opportunity to map these advocacy organizations for the first time and provide valuable insight into how they are operating all over the world,” said Tomasz Jerzynski, lead author and data scientist for the Global State of Tobacco Harm Reduction project. “The sustainability of these organizations is one of the main concerns that has come out of the data. All of these groups face challenges due to their small numbers of core workers and their dependence on volunteers.”
“This paper starkly demonstrates the major imbalance in resources available to consumer organizations advocating for access to safer nicotine products and those opposed to tobacco harm reduction, unfairly skewing the debate,” said Gerry Stimson, report author, director of KAC and emeritus professor at Imperial College London. “It also highlights why consumer groups must be recognized as legitimate stakeholders in the policy sphere.”

February 1, 2023
PMI, BAT Recognized for Gender Equality

Image: melita | Adobe Stock

Philip Morris International and BAT were included in the 2023 Bloomberg Gender-Equality Index (GEI).
PMI made the index for the third year running, achieving an overall score of 80.6 percent.
“Achieving gender balance at all levels of the company is one of our top priorities, and I am delighted that our efforts are recognized again in this year’s index,” said Silke Muenster, chief diversity officer at PMI. “While we are making significant progress, we know we need to keep our foot on the acceleration pedal. An inclusive workplace that leverages the full talents of both women and men is crucial to our smoke-free vision, making our organization more innovative, resourceful and engaged.”
In 2022, PMI achieved its target of ensuring at least 40 percent female representation in managerial roles and announced a new target to achieve 35 percent of women in senior roles by the end of 2025, among other targets.
BAT, which participated in the index for the first time, received a score of 75 percent. BAT was recognized for creating an inclusive culture for women via its recruiting initiatives, adoption of family-friendly policies, sponsoring programs dedicated to educating women, and support of community programs. Inclusion in the index follows BAT being named as a Global Top Employer for a sixth successive year.
“Recognition in this year’s Bloomberg Gender-Equality Index demonstrates our commitment to addressing gender diversity and highlights our concerted global efforts to provide transparent reporting,” said Hae In Kim, BAT’s director of talent, culture and inclusion. “With more than 50,000 employees worldwide, our diversity and inclusion strategy is truly global, and I continue to be incredibly proud of the collective efforts made by all our employees.”
The GEI measures gender equality performance globally across five pillars as set by Bloomberg: leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and external brand. The 2023 Bloomberg GEI comprises 485 companies from 45 countries and regions.

February 1, 2023
Trade Group: Cigar Flavor Ban Harmful

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Banning flavored cigars would do more harm than good, according to David Ozgo, president of the Cigar Association of America, reports The Center Square.
“The economic impact is one thing, but just as important is the fact that what you’re doing is taking away an adult’s right to choose,” Ozgo said. “When President [Barack] Obama passed legislation in 2009 regulating tobacco, he stressed the idea was not to take away an adult’s right to use tobacco if that’s what they choose.”
In 2021, flavored cigars made up 47 percent of the market, so banning them would have a huge economic impact, according to Ozgo. He projects losses of about $4 billion in retail sales, 16,000 jobs, $840 million in wages and an estimated $750 million in federal, state and local tax revenue.
“The proposed rules would help prevent children from becoming the next generation of smokers and help adult smokers quit,” Health and Human Services Secretary Xavier Becerra said in a statement on the U.S. Food and Drug Administration’s website. “Additionally, the proposed rules represent an important step to advance health equity by significantly reducing tobacco-related health disparities.”
Ozgo countered that it’s already illegal for a person under 21 to purchase tobacco. Government data shows less than 1 percent of youth use flavored cigars, he noted.
“This is a solution in search of a problem,” Ozgo said. “When you look at indicators of nicotine addiction, they’re not the same as, say, cigarettes. Really, people smoke cigars for different reasons. With cigars, it’s just something you do to relax and enjoy. We always say cigars are more of a hobby than a habit; you don’t even smoke one every day.”

February 1, 2023
KT&G Refuses Ginseng Spinoff

Photo: KT&G

KT&G has refused to spin off its ginseng business as requested by activist investor Flashlight Capital Partners, reports The Korea Herald.
“The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said.
Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.
Flashlight Capital Partners has been putting pressure on KT&G to increase dividends and spin off its ginseng unit into a separate listing, among other things.
KT&G plans on initiating a share buyback program and aims to increase its overseas sales to over half by 2027. To raise the needed capital, KT&G can sell property assets and borrow from banks, according to Bang.

February 1, 2023
U.S. Cigarette Sales Down in 2020-2021

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The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide decreased from 203.7 billion in 2020 to 190.2 billion in 2021, according to the Federal Trade Commission’s most recent Cigarette Report. The report also states that in 2021, menthol flavored cigarettes comprised 37 percent of the market among major manufacturers, more than double the 16 percent market share they held in 1963.
The amount spent on cigarette advertising and promotion increased from $7.84 billion in 2020 to $8.06 billion in 2021. Price discounts paid to cigarette retailers ($6.01 billion) and wholesalers ($917 million) were the two largest expenditure categories in 2021. Combined spending on price discounts accounted for 86 percent of industry spending.
According to the Smokeless Tobacco Report, smokeless tobacco sales decreased from 126.8 million pounds in 2020 to 122 million pounds in 2021. The revenue from those sales rose from $4.82 billion in 2020 to $4.96 billion in 2021. Menthol flavored smokeless tobacco products comprised more than half of all sales and fruit flavored smokeless tobacco products comprised 2.7 percent.
Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S. increased from $567.3 million in 2020 to $575.5 million in 2021. As with cigarettes, price discounts made up the two largest spending categories, with $308.2 million paid to retailers and $81.3 million paid to wholesalers in 2021. Combined spending on price discounts represented 67.7 percent of all industry spending.
Smokeless tobacco manufacturers also reported selling $804.8 million of nicotine lozenges or nicotine pouches in 2021, not containing tobacco, up from $422.7 million in 2020.
The Commission has issued the Cigarette Report periodically since 1967 and the Smokeless Tobacco Report periodically since 1987.

February 1, 2023
Altria Group Reports 2022 Results

Photo: Altria Group

Altria Group reported net revenues of $6.11 billion for the fourth quarter of 2022 and net revenues of $25.1 billion for the full year, down 2.3 percent and 3.5 percent, respectively, from the comparable periods of 2021. Revenues net of excise taxes were down 0.1 percent for the quarter and up 2 percent for the full year, to $5.08 billion and $20.69 billion, respectively.
“It was an exciting year for Altria as our businesses delivered strong financial performance, and we continued to strategically invest toward our Vision,” said Altria CEO Billy Gifford in a statement. “We generated strong adjusted diluted EPS growth of 5 percent and made meaningful progress in several areas of our smoke-free portfolio.”
“Our plans for 2023 include a continuation of our strategy to balance earnings growth and shareholder returns with strategic investments toward our Vision. We expect to deliver 2023 full-year adjusted diluted EPS in a range of $4.98 to $5.13, representing a growth rate of 3 percent to 6 percent from a base of $4.84 in 2022.”
Like other tobacco companies, Altria was impacted by high rates of inflation in 2022, which reduced adult tobacco consumers’ discretionary income and spending. “As a result, our businesses and the industry experienced elevated volume declines, and we observed accelerated share growth in discount cigarettes. Despite these factors, our leading tobacco brands remained resilient and we continued to observe significant brand loyalty in the tobacco space overall,” the company wrote on its website.
While Marlboro’s retail share of the total U.S. cigarette category dropped 0.4 points to 42.5 percent in 2022, the brand gained 0.5 points in the premium segment, claiming 58.2 percent of that category.
Altria Group also revised the valuation of its stake in Juul Labs, which has faced considerable regulatory and legal challenges. As of Dec. 31, 2022, the investment was worth $250 million, according to Altria.

February 1, 2023
A Teaching Moment

Photo: Darren415

Nicotine’s lessons for cannabis regulation
By Cheryl K. Olson and Willie McKinney
From the industry perspective, regulation of tobacco products by the U.S. Food and Drug Administration went from impatient foot-tapping to a lurching roller-coaster ride. The recently released “operational evaluation” of the FDA’s tobacco program, requested by Commissioner Robert Califf, lays out in sedate but clear terms some causes of industry’s frustrated exhaustion: years of delay in establishing requirements. Sudden major shifts in policy. Cycles of litigation and reprieve.
Based on feedback from FDA employees, and people from industry and public health, the independent Reagan-Udall Foundation for the FDA made recommendations to start repairing the regulatory mess. After “observ[ing] that CTP [Center for Tobacco Products] has been forced to operate primarily in a reactive mode, moving from one challenge to the next,” the first recommendation to the agency is to get proactive. The Reagan-Udall panel encouraged the CTP to make time now to “think strategically about where it is today and where it needs to go in the next several years.”
This advice might apply equally to whatever future the FDA faces with regulation of cannabis products. The FDA has authority over cannabis and its dozens of biologically active chemical compounds, including CBD and THC. Although marijuana falls under the federal Controlled Substances Act, the 2018 Farm Bill removed hemp (a low-THC cannabis plant and its derivatives) from that definition.
Principal Deputy Commissioner Janet Woodcock recently announced in a press release that existing regulatory frameworks for food and supplements are not appropriate for CBD. “The agency is prepared to work with Congress” on a new pathway, she stated.
What might we take from the U.S. tobacco experience to ease headaches for future cannabis regulation? Below are some points to ponder in three areas: regulatory structure, medical versus recreational use, and the effects of misinformation on regulation.

What Should a New Structure Look Like?
First, what regulatory structure makes sense: Should the FDA create an all new one for cannabis products, or should it employ some existing channels? Consider the tobacco parallel.
“Safe and effective” is the FDA’s traditional standard for evaluating drugs and medical products. In the 1990s, then Commissioner David Kessler tried to assert the FDA’s authority to regulate nicotine as a drug—intended by industry to affect the body’s structure or function—and cigarettes as delivery devices. A 2000 Supreme Court ruling found that the “s and e” standard left no room for regulation of tobacco.
In 2009, when Congress chose to place tobacco under FDA jurisdiction, a novel department was created. But this promising, fresh science-based regulatory approach for tobacco faced headwinds. This Center for Tobacco Products was largely staffed by people rotated from elsewhere in the FDA. The “appropriate for the protection of public health” (APPH) tobacco standard was a difficult departure from their accustomed ways and views. The combination of suspicion from past industry misbehavior and the political uproar over youth vaping fostered an “us versus them” mindset. The founding legislation’s focus on cigarettes, the most deadly of tobacco products, affected attitudes toward emerging alternative nicotine products with the potential to greatly reduce disease risks for people who smoke.
Perhaps there is light at the end of the tunnel. The FDA appears to recognize that shoehorning cannabis into existing structures has its own problems. Each type of intended use must find a fit in an existing department, such as human food, veterinary products, cosmetics or drugs. Under the Federal Food, Drug and Cosmetic Act, a drug is any product (including marijuana or hemp) intended to affect the structure or function of the body or intended to diagnose, cure, mitigate, treat or prevent disease.
What factors will influence staff mindset about cannabis in these various departments? How will that affect regulation?

Medical vs. Recreational Pathways
Another issue: How best to regulate cannabis for medical versus recreational use? Like tobacco, cannabis has been used historically for medical purposes, such as treating pain. Both nicotine and cannabis are reportedly used to self-medicate for mental health disorders. Use of marijuana to manage mood disorders is reportedly higher in states with medical marijuana laws. But there currently is no such thing as “medical” marijuana. (This is not unlike the confusion over what constitutes “natural” food.) The FDA drug pathway would create medical cannabis. A standardized product would be evaluated for quality, safety and efficacy for a particular medical indication.
We lack randomized, controlled clinical trial data on whether cannabis effectively treats disorders such as depression. However, such studies could be done by industry and submitted to the FDA’s Center for Drug Evaluation and Research. Several specialty products containing THC or CBD (e.g., for chemotherapy-related nausea or severe forms of epilepsy) have emerged from this path.
But what regulatory pathway might recreational cannabis take? And what complications arise from product format and route of administration: smoked, vaped, applied to skin or eaten? Where would combusted flower fit?
Nicotine is regulated by the FDA as a drug and as a recreational product. Two paths for cannabis also make sense. Although there is overlap (to get technical: Gum bases that contain nicotine are regulated as both pharmaceuticals and recreational tobacco products), combusted tobacco products that contain nicotine are only regulated by the Center for Tobacco Products.
We propose that Congress modify the 2009 Tobacco Control Act to give the CTP authority over combusted and vaped cannabis. Such products are very unlikely to pass the “safe and effective” drug standard, but the APPH standard may be applicable to recreational cannabis. And the CTP has built up expertise in combusted and vaped products.

Keep Moral Panic Out of Regulation
A third issue deserving of thought is how to prevent moral panic and misinformation from derailing the potential benefits of cannabis. One lesson from nicotine is how these can fog the ability of regulators, politicians and the public to see data clearly.
Research shows that youth use of nicotine and cannabis (as well as alcohol and other substances) overlap. A 2022 analysis of Population Assessment of Tobacco and Health study data found that more than half of e-cigarette users aged 15 to 24 had vaped cannabis. At the population level, teen cannabis youth has been fairly stable for the last quarter century. However, there will be concerns that the spread of state laws legalizing cannabis for adults could ease access for youth.
Once it takes hold, misinformation is hard to uproot. Witness stubborn rates of misbelief that the outbreak of vaping-related lung injuries (e-cigarette or vaping product use-associated lung injury, or EVALI) were caused by e-cigarettes instead of THC vapes adulterated with vitamin E acetate.
We see signs of a potential moral panic over cannabis. When the Centers for Disease Control and Prevention noted that marijuana vaping was most often linked to EVALI, the Wall Street Journal editorial board decried the “risky social experiment [of] legalizing and especially destigmatizing cannabis”—a drug that “could be damaging young brains for a lifetime.” News reports tout studies suggesting higher potency cannabis could mean higher risks of addiction and health harms.
Research to clarify the specific nature of cannabis risks to youth is needed. We also need research on the current state of cannabis misinformation, including overly rosy views of risk that could create a backlash when problems are publicized. Using the results of this research for outreach ASAP, before the pot panic gets rolling, could soften the impact.

Scrutinize and Enforce
To avoid repeating mistakes of the past, we also need rigorous oversight. The FDA has been criticized for reluctance to use its powers to remove illegal nicotine vapes from the market. Some companies continue to sell despite warning letters. We need to study what cannabis products drive youth use and proactively target those makers and distributors.
Products likely to attract underage users deserve particular scrutiny. Although no deaths were reported, a study in the journal Pediatrics² documented a worrisome increase in child poisonings from edible cannabis products. To protect both adult access and child well-being, it’s common sense to require that edibles come in clearly marked, child-resistant packaging with no resemblance to candy.
We have tools to unmask the bad actors. Youth will tell us in surveys what products they buy. The FDA’s own National Youth Tobacco Survey identified products not legally on the market, such as Puff Bar and Hyde, as favorite brands (Hyde was identified through write-in responses).
With nicotine, regulatory delays and gray areas (such as regulation of synthetic nicotine) were abused by companies willing to skirt the law for quick profit. We see analogous situations with cannabis. One example is hemp-derived delta-8 THC products, said to produce a milder high similar to that from marijuana-derived delta-9 THC. Sales are rising fast. So are concerns. There are safety risks from impurities created during delta-8 manufacturing. And public confusion over delta-8’s legal status could complicate marijuana legalization efforts.
The Reagan-Udall Foundation review of the CTP highlighted the need for “truthful and accurate information to help adult consumers make informed decisions about the role of nicotine” and product-specific risks. This applies equally to cannabis.

Cheryl K. Olson is a California-based public health researcher who specializes in behavioral health issues and consults on tobacco product behaviors via McKinney Regulatory Science Advisors. She spent 15 years on the faculty of Harvard Medical School.

Willie McKinney is the founder of McKinney Regulatory Science Advisors. He’s held senior regulatory roles at major tobacco product companies and served for three years as the industry representative on the FDA’s Tobacco Products Scientific Advisory Committee.

February 1, 2023
Enduring Legacy

Packing and pressing station for tobacco | Photo: Godioli & Bellanti

Celebrating 100 years in business, Godioli & Bellanti attributes its success to offering “quality machines at truly unbeatable prices.”
By George Gay
Lorenzo Curina | Photo: Godioli & Bellanti
After three years of subdued demand for tobacco industry primary processing equipment, interest is picking up, according to Lorenzo Curina, chief executive officer and sales director at the primary machinery designer and manufacturer Godioli & Bellanti.
There was now increasing demand for complete processing lines that were compact and uncomplicated, a demand that was being driven by a growing interest in the production of cut rag, he said in an emailed reply to questions.
At the same time, there was a trend by major cigarette manufacturers to require the relocation and/or the refurbishment of existing equipment, projects for which Godioli & Bellanti, with its 100 years of experience in the business, was well qualified to undertake. The company’s engineering skills and experience enabled it to repair, rebuild, recondition or upgrade all types of primary equipment while its organizational skills and flexibility meant it could navigate the necessary logistics involved.
In fact, an indication of the engineering and logistical skills the company can call on was demonstrated when, in 2018, it shipped and delivered what was believed to have been one of the tobacco industry’s biggest direct conditioning cylinders, which was 14 meters long, 3 meters in diameter and capable of processing flue-cured Virginia tobacco at a rate of 20 tons per hour.

A Pioneer

Godioli & Bellanti was established in 1923 by Gino Godioli and Angelo Bellanti, whose initial focus was on making agricultural implements, especially those aimed at helping the mechanization of tobacco production, since the Umbria region, where they were based, was one of the most important areas in Europe for the cultivation of flue-cured tobacco.
After the passing of the founders, Godioli & Bellanti was, in 1963, turned into a limited company, which was the beginning of a transformation. Under its new designation, Godioli & Bellanti SpA, the company moved into new and challenging areas. It developed new technologies for the tobacco industry, becoming Italy’s first supplier of tobacco machinery to the tobacco manufacturing sector, which later included the multinational companies that established operations in Italy and elsewhere in Europe.
The transformed company specialized in turnkey projects, which meant that it supplied, as well as machinery, services such as heating and lighting systems. And this breadth of operation allowed it to gain considerable expertise in machine and whole-factory design.
Initiatives such as these have been continued and are continuing. Although the company is known for its tobacco industry services, it operates in other industries, most of them natural outcrops. It offers machinery and processing lines for medicinal herbs and other plants, including mechanized equipment for the cultivation of these plants, along with machinery for drying and dehydrating; cutting, threshing and classification; and mixing and blending. It offers, too, continuous drying plants for food products.

Entering New Fields

Processing line for medical herbs | Photo: Godioli & Bellanti
Meanwhile, the company’s experience in the field of herbs was adapted to allow it to enter the field of industrial hemp processing, where its processing lines provide for the separation of the plant’s fiber, hemp, seeds, flowers, leaves and stems. This is an important and growing side of the business because the products that are generated are used in a wide range of industries, including those concerned with pharmaceuticals, textiles, foodstuffs, veterinary products and bio-building. Less well-known, perhaps, is the company’s work with tree seeds. It was the first company to develop a tree seed extraction system, and it now offers complete, custom-designed turnkey plants for the extraction and selection of tree seeds.
Aside from its interests in food and related products, the company offers biomass driers that function with recovered thermal energy, including driers for woodchips and sawdust. And it offers machines and complete processing lines for producing glass-reinforced pipes and sleeves, using continuous filament winding technology.

Custom Offerings

Drying lines for tobacco | Photo: Godioli & Bellanti
But a large part of its business is concerned with tobacco, for which it can supply equipment for auxiliary plants, threshing lines and, of course, primaries. For auxiliary plants, where the leaf tobacco process begins, Godioli & Bellanti is able to offer, among other items, conveyor belts, picking lines, feeding and blending tables, tipper feeders, tipping machines, weighing belts, vibrating conveyors, vibrating sieves, pneumatically operated pad looseners, sand reels, blending silos and ordering cylinders along with test shakers, stem testers, laboratory mills and laboratory cutters.
For many years now, it has been a goal of most leaf processors to implement changes aimed at increasing packed-tobacco quality, costs and yields, and, to this end, Godioli & Bellanti offers custom-designed threshing lines and plants, including, among a host of other equipment, high-efficiency threshers operating over a wide range of speeds and compact classifiers with low energy requirements. It provides, also, compact, high-efficiency re-driers with steam recycling systems that reduce steam consumption. Being custom designed, the re-driers provide for a wide range of adjustments in such areas as, but not limited to, drying temperatures, humidifying steam pressures and apron conveyor speeds. Finally, Godioli & Bellanti offers complete, automatic, programmable leaf tobacco packing lines for cartons, wooden boxes, zipper bags and bales.
Meanwhile, it is probably the case that the company is best known for its primary machinery and plants—particular plants at that. Curina told Tobacco Reporter that companies that contacted Godioli & Bellanti were those who preferred “traditional primary processing—I would say almost artisanal.” Such equipment includes automatic handling systems for cartons and bales, automatic de-cartoners, automatic vertical slicers, pneumatic conveying systems, weighing belts, dosing feeders, tipping feeders, blending and storage silos, toasters, sauce and flavor kitchens, casing and flavoring cylinders, drying cylinders for cut rag, and customized supervision software to render whole lines automatic.
Finally, Curina further defined his company’s approach to business. “We don’t presume to compete with the big primary machinery manufacturers for the very big projects,” he said, “but we modestly offer quality machines at truly unbeatable prices.”
This strategy seems to have paid off, not surprisingly, perhaps, given that the recent past has seen an increasing trend—at least outside China—toward shorter cigarette-manufacturing runs, a trend that has been reflected in primaries as a need to produce smaller batches of cut rag. There has been a rise, too, in the number of small, independent primary operators catering to multiple end users that need to run low-cost, highly flexible operations from small footprints. Certainly, Curina, and his brother Cesare, president of the board and technical director, who have steered the company’s direction in recent years, have made much progress—modestly expressed. A note on the company’s website describes how “Godioli & Bellanti works in several areas of the world,” before going on to list almost 60 countries and every continent.

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.

February 1, 2023
Cleaner Better Greener

Photo: SPI

Suppliers of adhesives and glue application systems prepare to accommodate new product requirements.
By Stefanie Rossel
In cigarette construction, adhesives are an invisible but indispensable ingredient. Even though adhesives often make up only a small percentage of the final product, they can have a major impact on the product life usage and consumer experience, explains Selda Akbasli, global business manager for rolled paper and tips at adhesives manufacturer H.B. Fuller. “Adhesives play a critical role as an enabler and a must-have technology that makes the products work. Due to its innovation, versatility and flexibility—not only in selecting technologies and raw materials—the industry now has many options that contribute positively to the way products are conceived and manufactured, reused or recycled.”
Efficiency, sustainability and cleaner application: These trends currently dominate the market for adhesives and glue application systems. Akbasli says that as markets are in constant evolution and manufacturers are under pressure to control costs and improve customer service, efficiency is a top priority for her customers. Tobacco companies seek to improve production processes and improve their machinery’s performance while using fewer resources and producing less waste.
Selda Akbasli
“In some cases, it is not a matter of preferring a lower priced grade but looking for good value for money and quality,” she says. “For instance, often a high performance, higher priced adhesive can enable the user to apply less [adhesive], and the cost in use of the more expensive product will actually be lower. Additionally, customers are aiming to optimize their business complexity and reduce SKUs, for instance.”
To meet these requirements, H.B. Fuller has developed Ipacoll 2606, which provides robust performance on both high-speed tipping and filter applications, according to the company. Excellent initial wet tack and clean application performance enables superior mileage optimization with no impact on bond strength, the manufacturer claims.
On the application equipment side, there is also interest in enhanced efficiency, according to Danielle Roxborough, business development manager at SPI Developments, which in 2018 joined the Tembo Group, a holding company that also includes tobacco machinery manufacturer ITM. “Customers want application systems to run as smoothly as possible and without interruptions—and without the engineers being involved with the machine,” she says.
SPI recently launched a new multi-line applicator, a small plate that is available with three holes to 15 holes, creating very thin lines of glue. “The innovation for this came from our paper straw-making machine,” says Roxborough. “We were developing a glue system that we were selling to our sister company to create multi-lines to make the paper straw. We then saw this could be transferred into the tobacco industry. We have now moved on from our previous triple line applicator to this cleaner, more accurate, more flexible application.”

Sustainable is the Way
Environmental considerations have gained prominence throughout the nicotine industry, including in adhesives. In Europe, the Single-Use Plastics Directive is forcing cigarette manufacturers to rethink their use of cellulose acetate filters. This has given rise to more sustainable solutions, such as filters made from crimped paper. Interestingly, adhesives are exempt from the directive.
“Everyone would love to be more sustainable, but sometimes this comes at the cost of something else,” says Roxborough. “If you’re using paper filters as being better for the environment, you shouldn’t be using a plastic glue. The question is, how do you move away from such things as PVA glue—which is not sustainable but plastic—or hotmelt, which is thermoplastic?
Danielle Roxborough
“We are seeing some requests about creating applicators that could do starch-based glues. This is almost going full cycle; in the 1970s, starch-based adhesive was used to create cigarettes on a filter. Today the science is better, though. We believe that glue manufacturers will drive this development rather than SPI, which will follow with the respective application system.”
According to Roxborough, gluing paper filters to a cigarette involves only minor tweaks to existing technologies, such as adjusting the angle of the applicator’s nozzle. “The interest from SPI’s point of view actually is in terms of flavoring because that’s a different challenge altogether,” says Roxborough. “From gluing, it’s the same principle, but how do you make a paper filter taste and feel like a normal filter?”
“Sustainability is getting higher and higher on the agenda,” notes Jean Pierre de Smet, global tobacco adhesives business manager at adhesives supplier Henkel. “Paper-based filter products may need different adhesives. We develop them case by case and customer dependent.” In the short term, he states, adhesives have a role as carbon footprint (LCA) reduction enablers. “In the longer run—and if supported by the cigarette manufacturers—we might think about LCA reduction of the adhesive itself.”

Wanted: Automated Cleaning
H.B. Fuller can draw on a strong track record in adhesives to bond paper substrates for packaging. “We are continuously investing resources and capabilities to develop customized products for very specific applications such as coated paper or crimped paper as the market evolves to answer the new consumer needs.” She is seeing a rise in interest in “greener” products as regulations around the handling of chemicals become tighter and governments are introducing stricter laws. “In Europe, companies need to continue complying with the latest legislation driven by the Green Deal, like the tendency to remove aluminum. And we at H.B. Fuller have solutions to eliminate aluminum paper from the package to make it simple and easy to recycle in established wastepaper and board recycling streams. Net sustainability is a mega-trend, and the most substantial contributions adhesive producers make in the realm of sustainability are through product innovation, reducing the environmental impact of production processes and improving the sustainable performance of tobacco through their formulations.”
The choice of an adhesive impacts tobacco production’s carbon footprint in a variety of ways, explains Akbasli. “We have ongoing projects for bio-based raw materials and products, and customers can already purchase our adhesives in bulk returnable and reusable containers to eliminate packaging waste, through to using our operator training packages to optimize the adhesive application ensuring maximum efficiencies. Whichever combination of options are selected, the adhesive is a small percentage of any tobacco product, and improvements in the overall carbon footprint of the production facility will be in the corresponding proportion.”
Applying glue to cigarettes can be a messy business, and demand is growing to make the process cleaner. Roxborough says that “autonomation”—that is, intelligent automation—is becoming a big thing among customers. “The glue is very messy, and it’s very difficult to keep applicators clean. Currently, it’s a very old-fashioned way of wiping the nozzles at the end of the shift. What we see now are requests for nozzles that clean themselves. For years, we have had what we called positive shut-off, so when the machine stops, the needle closes the hole, pushes all the excess glue out, and that prevents leakage while the machine is not running. But the excess glue needs to be removed.” SPI is working with certain customers to create self-cleaning solutions for glue applicators. This technology may ultimately find its way into the general tobacco industry market.

Novel Products, Novel Needs
For a decade now, suppliers of adhesives and glue application systems have had to contend with a shrinking global cigarette market. The new smoking alternatives make up for just part of that reduction as many don’t use adhesives. “Only heated-tobacco products require adhesives and compensate for the decline of combustible cigarettes,” says de Smet. “Adhesives for HTPs have higher quality requirements.”
As a leader in both traditional and HTP markets, H.B. Fuller does not expect any disruption to its business, with HTPs gaining traction and growing. “One of the biggest challenges we see for HTPs is the heat resistance of adhesives to ensure product integrity during use. At H.B. Fuller, we have recently developed Ipacoll 2364, a superior performance product that addresses the temperature resistance needs,” says Akbasli.
Jean Pierre de Smet
“Another [challenge] is related to the fact that the HTP industry is highly technical, regulated and always under high security. To closely monitor what is evolving in this segment and keep track on the latest developments, H.B. Fuller collaborates and develops strong relationships with its customers, paper vendors, machine manufacturers and other suppliers throughout the value chain. Working together and being part of the solution design from the beginning make it easier to develop adhesive solutions that meet the needed requirements valued by the market, even under short time pressures.”
Roxborough notes increasing interest in the company’s multi-line application system from HTP manufacturers as the production process involves connecting different materials, such as foil, metal, reconstituted tobacco, paper and acetate filters.

Understanding the Full Lifecycle
As is the case in other industry, the supply chain, impacted by Covid-19, Brexit and the war in Ukraine, among other factors, remains a major issue for adhesive suppliers. In the current environment, small components normally considered insignificant can stop machinery from being shipped, according to Roxborough. Electronic supplies are particularly difficult to obtain. “SPI was fortunate to have enough on the shelf, so delivery was only a bit delayed,” says Roxborough. “But we’re getting to the point now where we will have to think of redesign allowing for alternatives. This is pushing costs up. We have seen a massive increase in costs from suppliers, from services through energy supplies. We try not to pass the higher costs on to customers, but we had to do it due to the economic climate we’re in.”
De Smet says that like everyone in Europe, his company has been suffering from disruptions and an unstable supply chain. “Thanks to the leverage of Henkel in the adhesive industry, we have been able to supply all our customers in line with their needs,” he says. “More contingency and security of supplies was given by a strategic combination of our footprint and our product portfolio.”
Meanwhile, dynamics have shifted, with many countries moving toward recession, demand across raw material markets decreasing and transoceanic shipping prices dropping to pre-Covid levels. “Yet many key input costs, such as energy, are expected to remain high through 2023 versus historical level,” says Akbasli. “As economies move forward, companies need to maintain a keen eye on fundamental consumer demand and focus on increasing agility. For instance, the move to on[-shore] or near-shore high demand/highly volatile goods will continue as organizations seek to be more reactive to demand changes and control logistics costs. Supply is currently balanced while pressure on margins up and down the supply chains is expected to increase. With this, and for most companies, cost containment will be the top priority this year, and supply chains will be under intense scrutiny to keep costs under control.”
In 2023, cigarette consumption will be affected by economic crisis, inflation and excessive taxes, especially in developing countries, according to Akbasli.
“This tends to promote hard-to-control illicit trade that poses many challenges across all industries,” she says. “At H.B. Fuller, we have the advantage of a robust, global and secure supply chain, making us a trusted partner. […] When considering the development of next-generation adhesive solutions, the goal is that adhesive manufacturers understand the full product lifecycle, including recyclability, bonding and de-bonding on demand, alternative cure processes and use of renewable or bio-based raw materials to name a few.”
De Smet confirms that the supply chain is normalizing, and raw material cost is moving slowly but steadily to historical levels. “The challenge may be that we’re still in a potentially fast-changing environment. Opportunities may be found in a close cooperation between tobacco industry and its suppliers to manage costs keeping the holistic view in mind.”
Despite all the challenges, SPI can reflect on a strong 2022, and, with a full order book, look forward to a good 2023. While tobacco remains its main focus, the company is collaborating with ITM and other Tembo Group members on projects for nontobacco industries, such as the homecare and paper businesses. To accommodate its growing team, the company will move to new premises this year.

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.

February 1, 2023
Surfing while Juggling

photo: Anna Berdink

Five types of innovation
By Clive Bates
Where does innovation in the tobacco and nicotine field come from? Is it the far-sighted senior executive assessing the needs of the evolving market and committing R&D budgets to realize the corporate vision? Or is it the genius scientists and engineers toiling 24/7 in the labs to invent the wonder product that will become The Next Big Thing?
Both are caricatures, of course, but neither explains how innovation really works.
In his brilliant book, How Innovation Works, author Matt Ridley points out that “Innovation is not an individual phenomenon but a collective, incremental and messy network phenomenon.” For those involved, I would say it is more like surfing while juggling than a straightforward path from idea to implementation. To see why, let’s look at five types of innovation in the tobacco and nicotine market.
First, disruptive innovation. The most prominent recent case of disruptive innovation in the tobacco and nicotine field is the rise of electrical heating as an alternative to tobacco combustion to create an inhalable nicotine-bearing aerosol. Though the Chinese inventor Hon Lik is usually credited with inventing the e-cigarette, the truly disruptive innovation came before and from outside the tobacco and nicotine industry. It is what makes the e-cigarette and modern heated-tobacco products possible. The critical disruptive innovation was the lithium-ion battery. By the 2000s, battery technology had steadily progressed to achieve a sufficiently high power and energy density, allowing rapid heating and an adequately long life between recharges within a compact form factor. Developments in battery technology were driven by the demands of the giant and ultra-competitive markets for mobile devices like smartphones and tablets.
For decades, the intense heat, complex reactions and chemical cocktail generated by the combustion of tobacco leaf at 900 degrees Celsius in the burning coal of a cigarette were unmatched and unmatchable as a means of delivering nicotine to the lungs. The combination of electrically heated coil and e-liquid to generate an aerosol is now competitive. The disruption of the dominance of the cigarette, currently underway and likely to last two decades to three decades, is driven by a fundamental energy transition that degrades the advantage of combustion.

I refer to the second type as system innovation. This is the consequential economic, regulatory and public health reaction to the initial disruption and may involve hundreds of innovative responses. For example, the emergence of e-cigarettes triggered a creative response in the Stop Smoking Service in the city of Leicester, U.K. Under the leadership of its manager, Louise Ross, the service changed its practice to embrace vaping as a low-risk alternative to smoking that could appeal to many smokers who had previously been beyond the service’s reach. Through the power of example, that experience led to further innovation at the National Centre for Smoking Cessation and Training and with the government’s support to guidance on e-cigarettes issued by the National Health Service.
But this innovation did not happen linearly, driven only by personal inspiration. It is best seen as “emergent,” arising from a wide range of concurrent changes and influences triggered within the public health ecosystem. The disruptive innovation also led to system innovations in regulation, such as the 2014 European Union Tobacco Products Directive. In 2016, the U.S. Food and Drug Administration’s deeming rule brought vaping products into the definition of tobacco products and under the jurisdiction of the Tobacco Control Act. The initial disruptive innovation also led to innovation in the business models of tobacco companies, but also in the tactics of their traditional adversaries. Tobacco companies started moving their business toward a future in noncombustible nicotine products, and the anti-tobacco groups shifted their focus from preventing disease to fighting nicotine addiction.
For tobacco and nicotine companies, the disruptive innovation and the system responses it triggers are like a “big wave,” both prized and feared by top surfers. Like a wave, the companies didn’t create it and can’t control it, but their challenge is to catch it, ride it well and not wipe out. The case of Kodak and its destruction under the breaking wave of digital photography is probably the most cited case of an innovation wipeout. But it doesn’t have to be a technology shift. In the 1970s, deregulation in the aviation sector enabled the emergence of the innovative low-cost airline business model. It wasn’t long before major airline incumbents were going under as that big wave gathered pace.
The disruptive and systems innovations generate a changing paradigm: a big wave of opportunity or destruction that businesses must learn to surf. But why does innovation feel like juggling while surfing? The juggling reflects the frenetic activity of keeping a company moving, in financial balance and ahead of its rivals while it navigates a radically changing context. This brings us to three further types of innovation: the innovation occurring within the changing paradigm.

So, the third type of innovation is evolutionary. It resembles the Darwinist process of evolution in nature. Here, the consumer provides what evolutionary biologists call selection pressure, and innovation emerges from incremental improvement through trial and error, mirroring what biologists recognize as mutation and natural selection. It will usually be incremental, but its impact will not always be gradual. Evolutionary innovation can make radical inroads into a market by solving a particular problem or exploiting an opportunity.
A good example is pod-based vaping products using nicotine salts. Salts change how nicotine is absorbed in the airways and allow users to consume smaller volumes of higher strength liquids. The effect of the salts is to allow high-strength nicotine liquids to be used without undue harshness with a smaller battery and tank, enabling a compact and convenient device. This addressed the challenge of providing a convenient and discreet product with effective nicotine delivery. It was wildly successful—at least where regulators allowed it.
I have seen much handwringing about the recent rise of disposable vaping products. But this is another case of evolutionary innovation. The disposables solve the problem of finding a quick and convenient way into vaping for smokers in the early or tentative stages of switching away from smoking. They are simple to use, low cost and convenient. They don’t require an upfront investment in a device, so they lower the cost of consumer trial and experimentation. Like many innovations, these products have downsides, such as the waste generated. But this is manageable and must be set against the potential benefits and in context with other waste material flows.

The fourth type of innovation is adaptive. This is a variation of evolutionary innovation, but it arises in response to regulation. Ultimately, it is driven by meeting consumer preferences, but it is triggered by regulatory interventions that would otherwise compromise the consumer experience—ether by design or as an unintended consequence. One example is the mentholation cards that emerged after the European Union ban on menthol-flavored cigarettes. These are inserted into cigarette packs to infuse nonmenthol cigarettes with menthol flavor. Another case is the “shortfill” e-liquid containers that became popular as a workaround to overcome the European Union ban on e-liquid containers of more than 10 mL volume. Much larger containers of nicotine-free vaping liquid are sold only partially filled, allowing the nicotine to be added later—often from nicotine liquids stronger than permitted in the EU.
As the FDA imposed ever more burdensome regulation on nicotine vapes, small companies introduced synthetic nicotine products because the law confined FDA jurisdiction to nicotine derived from tobacco. This example also illustrates the arms race fought between adaptive innovators and responsive regulators. By March 2022, the FDA had prompted Congress to amend the Tobacco Control Act to apply to nicotine derived from any source, not just tobacco. Adaptive innovations can come with novel risks. For example, regulated bans on flavored e-liquids may lead to consumers adding food or aromatherapy flavoring agents not necessarily intended for vaping.

The fifth type of innovation is user-driven. The early vaping enthusiasts were hybrid producer-consumers, interacting on user forums with a strong problem-solving ethos and a hands-on approach to product design and construction. Users created innovations like “squonkers” or “squonk mods” to facilitate dripping, a niche style of vaping, by incorporating a flexible liquid bottle into the design of the vaping device. But the most impressive innovations from the user side have been social and community in nature. The vaping forums and vape meets created an elaborate technical and moral support infrastructure. This online community blossomed into vape shops as centers of expertise, personalization and encouragement. The vape shops are now de facto cutting-edge stop-smoking services but with a very different offer to the more clinical settings of traditional services. Even the biggest corporate beasts benefit and learn from user innovation. They should take care not to crush it.
Innovation is a fluid and dynamic business phenomenon with many simultaneously moving parts embedded in an unpredictably evolving, threatening or promising context. Surfing while juggling is hard and risky, but it is no longer a choice in the tobacco and nicotine business.

Clive Bates is the director of Counterfactual Consulting and the former director of Action on Smoking and Health (U.K.).

February 1, 2023