Tag: Featured

Stories featured at the top of tobaccoreporter.com

Sales and Profits up at Turning Point Brands

Photo: Steve Buissinne from Pixabay
Net sales of Turning Point Brands (TPB) increased 31.2 percent to $105.3 million for the fourth quarter of 2020. Gross profit increased 321.8 percent to $51.8 million, partly due to certain restructuring expenses incurred in the prior year period. Net income increased $25 million to $12.7 million compared to the previous year’s fourth quarter. Adjusted EBITDA increased 80.9 percent to $25.8 million.
Net sales increased 11.9 percent to $405.1 million for the full year ending Dec. 31, 2020. Gross profit increased 38.7 percent to $189.6 million, partly due to certain restructuring expenses in the prior year period. Net income increased $19.3 million to $33 million, which includes premarket tobacco product application (PMTA)-related expenses from the fourth quarter of 2019 through the third quarter of 2020. Adjusted EBITDA increased 34 percent to $90.2 million.
Turning Point Brands has renamed its core business segments from Smoking Products to Zig-Zag Products and Smokeless Products to Stoker’s Products. Historical financial results are not impacted by the segment name change.
“Despite challenges related to Covid-19, our company remained focused on executing our plan throughout 2020 and finished the year strong with tremendous top-line growth in the fourth quarter,” said Larry Wexler, president and CEO, in a statement.
“The year was especially transformational for our Zig-Zag brand as targeted initiatives led to 22 percent growth for the full year as we repositioned it to be our fastest growing segment. Our Stoker’s segment delivered a second consecutive year of double-digit growth driven by incremental share gains in both product lines. Going forward, we expect Zig-Zag and Stoker’s to continue to be the backbone of our organic sales growth.
“NewGen managed to deliver a solid performance despite market disruption around the PMTA application process while creating long-term upside potential through its filed applications. We also had an active year of capital deployment with the acquisition of assets from Durfort as well as investments in the cannabinoid sector in Dosist and Wild Hempettes.
“Most recently, we successfully priced $250 million of senior secured notes, the latest step in the evolution of our capital structure, which gives us increased flexibility to scale the business through additional acquisitions and investments. Capitalizing on our strong momentum and increased liquidity, we expect another strong year in 2021.”
February 11, 2021
Taat Scales up Production

Photo: Taat Lifestyle & Wellness
Taat is now being manufactured at a rate of more than 57,000 ten-pack cartons per month, which reflects a 233 percent increase from a production rate of 12 pallets per month to 40 pallets per month as of this week. This increase was prompted by sustained demand for Taat in Ohio as well as anticipated demand from smokers aged 21-plus in other U.S. states who will be able to purchase Taat online directly from the company when its e-commerce portal launches this quarter.
Recent improvements to the company’s processing facility in Las Vegas have enabled Taat to produce a greater volume of Beyond Tobacco, the product’s base material, which is refined in-house using a 14-step process including a patent-pending refinement technique. Additionally, the company has coordinated with its contract manufacturer, who also produces cigarettes for regional and global tobacco brands, to allocate additional production bandwidth to making Taat.
Setti Coscarella
“Now that we are in the ‘execution’ phase on our roadmap to gaining penetration in the $814 billion global tobacco industry, manufacturing our product has become even more crucial to our success so that we can satisfy our proven demand with a consistent supply,” said Setti Coscarella, CEO of Taat Lifestyle & Wellness, in a statement.
“As we continue to place Taat with tobacco retailers in Ohio, and as we prepare to launch the TAAT e-commerce portal this quarter, we have taken proactive steps to ensure a strong supply of TAAT is always on hand to fill orders, with more in the pipeline. More importantly, this has provided us the opportunity to begin forming standard operating procedures for scaling our manufacturing resources even further, which I believe could prove valuable in the near future.”
Marissa Dean profiled Taat Lifestyle & Wellness in Tobacco Reporter‘s January issue.
February 11, 2021
Global Tobacco Market to Reach $1.07 Billion

Photo: JTI
The global tobacco market size is expected to reach $1.07 billion by 2028, according to a new report by Grand View Research. It is expected to expand at a compound annual growth rate (CAGR) of 1.8 percent from 2021 to 2028.
According to the authors, the shifting preference among youth and the working-class population toward tobacco products, including cigars and next-generation products, is crucial for the market growth. Moreover, growing student spending on tobacco products across the globe is expected to offer new avenues for the growth of the market over the forecast period.
By product, the cigarettes segment held the largest share of more than 75 percent in 2020, according to the report. Easy access to cigarettes at economical prices among the consumers through retail shops is expected to drive this product segment in the near future.
The next-generation products segment is anticipated to be the fastest-growing segment with a CAGR of 2.8 percent from 2021 to 2028. The growing acceptance of next-generation products, including e-cigarettes, in developed economies of North America and Europe is expected to remain a favorable factor for the segment growth.
The Middle East and Africa is anticipated to be the fastest-growing regional market with a CAGR of 3 percent from 2021 to 2028, owing to the increasing demand for premium and next-generation tobacco products with enhanced flavors.
February 10, 2021
22nd Century Launches Cannabis Platform

Photo: cytis from Pixabay
22nd Century Group has developed and launched a technology platform that will enable the company and its strategic partners to quickly identify and incorporate commercially valuable traits of hemp/cannabis plants to create new, stable hemp/cannabis lines. The platform incorporates a suite of proprietary molecular tools and a large library of genomic markers and gene-trait correlations. The platform was developed in collaboration with researchers at KeyGene, a global leader in plant research involving high-value genetic traits and increased crop yields.
“This is a major breakthrough. Quickly and easily identifying the genes responsible for specific traits in a plant is a powerful tool for 22nd Century Group and the hemp/cannabis industry as a whole,” said James A. Mish, chief executive officer of 22nd Century Group, in a statement.
“That is why we are even now beginning discussions to license this platform to strategic partners to help them improve their plant breeding techniques and to optimize their hemp/cannabis cultivars. We continue to make great advancements through our partnership with KeyGene, and this newly developed molecular breeding platform has the potential to result in exponential growth for the company’s revenues and create new value opportunities for our stakeholders, including shareholders.”
“Using traditional breeding techniques, it typically takes at least eight to 10 years to develop new varieties of hemp/cannabis plants that consistently express important traits,” said Juan Sanchez Tamburrino, vice president of research and development at 22nd Century Group.
“Our new molecular breeding platform can dramatically reduce our development time for new high-value varieties of hemp/cannabis and allows 22nd Century scientists to identify plant lines that carry high levels of major therapeutic cannabinoids, such as cannabidiol, cannabichromene and other minor therapeutic cannabinoids like cannabidivarin and tetrahydrocannabivarin.”
Demonstrating how this technology can be used, 22nd Century and KeyGene scientists can now accelerate the selection of specific traits yielding novel cannabinoid profiles. For example, the team was able to select specific markers that predict the gender of hemp/cannabis plants with 99.6 percent accuracy.
February 10, 2021
Swedish Match Reflects on Strong Year

Photo: Swedish Match
Swedish Match posted record sales and operating profit in 2020, finishing the year with top-line growth across all product segments.
Performance was driven by strong traction for ZYN nicotine pouches in the U.S. along with double-digit operating profit growth in local currencies for the smokefree and cigar product segments in both the full year and the fourth quarter, the company said in a press release.
Covid-19-related effects are estimated to have elevated sales and operating profit for the full year as well as in the fourth quarter.
In local currencies, sales increased by 15 percent for the fourth quarter and by 17 percent for the full year. Reported sales increased by 5 percent to SEK4.14 billion ($497.12 million) for the fourth quarter and by 13 percent to SEK16.7 billion for the full year despite significant strengthening of the Swedish krona during the year versus the U.S. dollar, the Norwegian krona and the Brazilian real.
In local currencies, operating profit from product segments increased by 23 percent for the fourth quarter and by 28 percent for the full year. Reported operating profit from product segments increased by 12 percent to SEK1.7 billion for the fourth quarter and by 23 percent to SEK7.16 billion for the full year.
Operating profit amounted to SEK1.65 billion for the fourth quarter and to SEK6.99 billion for the full year. The fourth quarter of 2019 included a non-cash impairment charge of SEK367 million related to the European chewing tobacco business.
Profit after tax amounted to SEK1.24 billion for the fourth quarter and to SEK4.89 billion for the full year. The full year 2020 includes a charge of SEK286 million following an adverse ruling in a tax case.
Lars Dahlgren
Referring to the challenges presented by Covid-19, Swedish Match CEO Lars Dahlgren described 2020 as “a year of adaptability.”
“The success that we experienced in 2020 would not have been possible without the tireless dedication and ingenuity of our employees, the long-forged relationships that we have with our vendors and the continued passion and trust that our customers and consumers place in Swedish Match and its brands,” he said.
Swedish Match’s full financial report is available here.
February 10, 2021
Pyxus Releases Improved Results

Pieter Sikkel (Photo: Pyxus International)
Pyxus International announced results for its fiscal quarter ended Dec. 31, 2020.
Sales and other operating revenues were $379.6 million for the three months ended Dec. 31, 2020, up from $363.3 million for the three months ended Dec. 31, 2019.
Gross profit as a percent of sales increased to 16.5 percent for the three months ended Dec. 31, 2020, from 15.2 percent for three months ended Dec. 31, 2019.
Net loss improved 62.7 percent to $8.2 million for the three months ended Dec. 31, 2020.
Adjusted EBITDA improved 64.9 percent to $39.9 million for the three months ended Dec. 31, 2020, from $24.2 million for the three months ended Dec. 31, 2019.
Inventory decreased 11.5 percent to $771.8 million as of Dec. 31, 2020.
“Fiscal year 2021 continues to be a year of evolution for our business,” said Pieter Sikkel, Pyxus’ president and CEO, in a statement. “Since the completion of our financial restructuring, we have undergone a strategic review of all business units and categories in which we operate in order to develop a stronger, more streamlined strategy to improve financial performance.”
“We see the potential for increased leaf tobacco volume in fiscal year 2022 from countries including the United States and Brazil. In addition, the developments in the e-liquids category following the September 2020 PMTA submission deadline, paired with increased enforcement of PMTA regulation, provide an encouraging opportunity for potential future growth.”
In January, Pyxus International announced plans to divest its cannabis business in order to focus on its more profitable tobacco and e-liquid businesses.
According to Sikkel, Pyxus International continues to experience Covid-19-related disruption in its supply chain and distribution channels. “While the volume of customer orders is in line with expectations and we have adequate supply of product to meet demand, we have been impacted by procedural delays with regards to fulfillment of customer orders,” he said. “This has resulted in the timing of fulfillment of certain customer orders shifting to the fourth quarter of fiscal year 2021 and others to the first quarter of fiscal year 2022.”
Despite these challenges, the company continues to manage its working capital closely, according to Sikkel. “At Dec. 31, 2020, inventory decreased $100.1 million, or 11.5 percent, to $771.8 million when compared to Dec. 31, 2019,” he said. “Additionally, we expect our uncommitted inventory to be near the midpoint of our stated range of $50 [million] to $150 million by fiscal year end.”
February 10, 2021
All-Parliamentary Group Hears Vapor Advocates

Mark Pawsey MP and Chairman of the APPG for Vaping
Prominent tobacco harm reduction advocates Gerry Stimson (Knowledge-Action-Change), Clive Bates (The Counterfactual), John Dunne (U.K. Vaping Industry Association) and Daniel Pryor (Adam Smith Institute) attended a virtual meeting organized by the U.K. All-Party Parliamentary Group (APPG) for Vaping, a collection of MPs and peers focused on e-cigarettes.
The tobacco harm reduction advocates’ input will be used to advise the U.K. delegation to the Conference of the Parties (COP9) to the World Health Organization’s Framework Convention on Tobacco Control, which is scheduled to take place in the Netherlands this November.
Chaired by Mark Pawsey, the APPG is keen for the U.K. to defend its vaping position internationally and to promote the successes of British vaping. The expert witnesses highlighted the considerable public health benefits of harm reduction tools and the potential benefit they could provide around the world.
Tuesday’s evidence session came as the U.K. government continues its own review of tobacco regulations, meaning a busy time for advocates hoping to protect the public potential of vaping.
“I was happy to accept the invitation from the APPG because the UKVIA believe[s] we have an incredible opportunity to spread the word—that innovative, appropriately regulated vaping industries save lives,” said Dunne in a statement. “Post-Brexit Britain is newly independent in forums like COP9, and it means we can drive this positive message home like never before.”
February 10, 2021
Bonin Bough Joins PMI Board of Directors

Photo: Jakub Jirsák | Dreamstime
Philip Morris International (PMI) has appointed Bonin Bough as a member of its board of directors.
Bough is the founder and chief growth officer of growth accelerator Bonin Ventures. He has been chief growth and marketing officer of Sundial Brands (Unilever); television host of CNBC’s “Cleveland Hustles”; chief media and e-commerce officer of Mondelez International; vice president, global media and consumer engagement of Kraft Foods Group; and chief digital officer of PepsiCo.
“It is with great pleasure that we welcome a member of the new generation of digital-first executives to the Philip Morris International board of directors,” said Lucio Noto, PMI’s interim chairman, in a statement. “As we move forward to ‘unsmoke the world,’ an understanding of how to navigate unprecedented societal and commercial change is vital to our success. Bonin Bough brings us a rich background of driving innovation into and through complex organizations.”
February 9, 2021
JT to Consolidates Operations

International and Japanese operations will be run from the JT Group’s existing headquarters of the international business in Geneva (Photo: JT Group)
The Japan Tobacco Group has announced a new operating model to further strengthen the competitiveness and profitability of its tobacco business. The changes include the consolidation of the company’s current international and Japanese-domestic tobacco businesses into one tobacco business, as well as the optimization of its operations in the Japanese market.
The headquarters of the tobacco business, including the Japan market, which is currently managed from Tokyo, will be consolidated into the existing headquarters of the international business in Geneva.
“Over the years, the JT Group has consistently anticipated new challenges and managed to successfully transform itself during rapidly changing business environments,” said JT Group President and CEO, Masamichi Terabatake in a statement. “We achieved this through large-scale transformative acquisitions, such as RJRI and Gallaher, and geographical expansions into emerging markets. In parallel, we continuously enhanced our portfolio’s brand equity with a focus on global flagship brands and invested in reduced-risk products [RRP] to expand sales.
“Since I assumed office as the CEO of the group, we have made progress in several areas to strengthen our global competitiveness and business foundation, including the formation of global teams for our R&D and RRP functions as well as transforming the operating and organizational structures in the international tobacco business.
“Today’s announcement is an acceleration of our transformation and will elevate the JT Group to the next level. We are consolidating the organizations of the international and Japanese-domestic tobacco businesses to enable us to fully leverage our company-wide resources and clearly prioritize business investments globally. I am confident that this organizational structure will efficiently and effectively deliver products and services, exceeding consumer expectations. We believe this new model is essential to strengthen our worldwide competitiveness, especially in the RRP category, enabling us to deliver sustainable profit growth in the mid- to long-term.
“The RRP category in Japan is the most mature and competitive in the world, so maximizing the value offered to our consumers by strengthening our competitiveness is a clear priority. In reflection to this and the decline of the sales volume in recent years as well as a highly uncertain operating environment, we had to take some difficult yet necessary decisions,” said Terabatake.

Masamichi Terabatake,
According to the JT Group, rapid changes in the tobacco industry include perception of smoking and health, heightened tobacco regulations and tax reforms in various countries, increasingly diverse consumer preferences and expansion as well as intense competition in product development in the RRP category.
Having closely reviewed the business environment from a long-term perspective, the JT Group concluded that a revision of its strategic focus in its tobacco business is necessary. The group’s objective going forward is to operate with a stronger consumer-centric mindset and prioritize investments in heated tobacco sticks in the RRP category while maintaining necessary investments towards combustible products. The combination of the two tobacco businesses will enable efficient and effective deployment of resources within the group.
More details of the group’s planned restructuring are available here.
The JT Group reported an operating profit of ¥469.1 billion ($4.48 billion) on revenue of ¥2.09 trillion in fiscal year 2020, down 6.6. percent and 3.8 percent, respectively, from 2019. Adjusted operating profit declined 5.6 percent to ¥487 billion. At constant currency exchange rates, adjusted operating profit was up 5.5 percent to ¥544.5 billion.
The company’s international tobacco business sold 435.7 billion units in 2020, 2.3 percent less than in 2019. Volume sales in Japan declined 8.2 percent to 114.9 billion units. The company reduced-risk product sales volume increased by 0.7 billion units year on year to 3.9 billion. Its market share in the RRP category is estimated at approximately 10 percent on an offtake basis.
“Despite the challenges impacting our operations, including Covid-19, the JT Group delivered a solid business performance in 2020, driven by the relentless efforts and passion of our employees worldwide,” said Terabatake. “During this period, we grew share in most of our key markets and captured pricing opportunities. I am also pleased to report that the JT Group continued its investments to strengthen our RRP business with the introduction of Ploom S internationally and Ploom S 2.0 in Japan.
“We will further build on our solid momentum, by adopting a more focused prioritization of our investments towards heated tobacco sticks and combustibles. While we expect the operating environment in 2021 to remain highly uncertain, we expect to continue gaining market share globally both in combustibles and in RRP. Notably, our next generation device for heated tobacco sticks will be launched in Japan early in the second half of this year, followed by launches in Russia and other international markets.”
February 9, 2021
Imperial Praised for Engagement on Climate

Photo: Gerd Altmann from Pixabay
Imperial Brands has been recognized as a global leader for engaging with its suppliers on reducing carbon emissions and tackling climate change.
The business is among a group of fewer than 400 companies to be included on the 2020 Supplier Engagement Leaderboard compiled by environmental nonprofit organization CDP. This is the second successive year that Imperial has been included.
In December, Imperial maintained its position on the CDP’s Climate A List for its actions to cut emissions and mitigate climate risks. Imperial also achieved a score of A- from CDP for minimizing water use.
All companies responding to the annual CDP climate change questionnaire receive a Supplier Engagement Rating (SER) in addition to their climate change score. The SER measures how effectively companies engage their suppliers on climate change through an assessment of governance, targets, scope 3 emissions and value chain engagement.
Stefan Bomhard
“We are pleased to once again be recognized by CDP for our focus on climate and energy, this time for the work we are doing with our suppliers to help minimize their carbon footprint,” said Stefan Bomhard, CEO of Imperial, in a statement. “This reflects further great efforts from employees across the business and their commitment to deliver our ESG agenda.”
“Meaningful corporate climate action means engaging with suppliers to reduce emissions across the value chain,” said Sonya Bhonsle, global head of value chains at CDP. “Despite the challenges from Covid-19, in 2020, nearly 400 companies achieved a place on CDP’s Supplier Engagement Leaderboard. Congratulations to these companies—as Supplier Engagement Leaders, they are driving the transition toward the net-zero sustainable economy.”
February 9, 2021