Tag: Imperial Brands

  • Rebirth of an Icon

    Rebirth of an Icon

    Photo: Rizla

    The legendary Rizla brand gets a makeover.

    By George Gay

    Having been told that the Rizla brand of rolling papers was being given “a very significant refresh to ensure it remains relevant, particularly for younger adult smokers,” I couldn’t help wondering how it was possible to know when a brand needed such a refresh. The answer, it turns out, is fairly simple, at least in theory. Andrew (Drew) Marfleet, the head of marketing for Rizla, told me during a Teams meeting toward the end of June that, in large part, it was a matter of asking the brand’s consumers.

    Rizla, he said, had been talking to consumers for more than a year, and the feedback had included the message that, while during the past few years, changes had overtaken societies, the way consumers viewed brands and the way many brand owners presented their products, Rizla’s image had remained largely unchanged.

    The message was clear and the solution seemingly simple, but this was not quite the case. In refreshing the brand, a number of other factors had to be taken into consideration, not least of which concerned the fact that while consumers wanted change, they were at the same time greatly attached to Rizla’s “iconic and legendary” status. Now words such as iconic and legendary are often bandied about where they really have no place, but this is not the case with Rizla. The Rizla brand, which was acquired by Imperial Tobacco, now Imperial Brands, in 1997, dates to 1796 and the granting of a license by Napoleon Bonaparte to the Lacroix family for the supply of its premium rolling papers to his troops, while the Lacroix family’s involvement with paper can be traced back to at least 1532 and Pierre Lacroix.

    So there was something of a conundrum to confront because here was a rock-solid brand but one that had been around for the sort of timespan over which even rocks wear down. In other words, there was a tightrope for the marketing people to walk in trying to stay true to a venerable brand dating back more than 200 years, while bringing its image up to date. As Marfleet told the people around him, “no pressure then.”

    In fact, negotiating the tightrope required an even trickier balancing act than is implied here. In recent times, Rizla has seen an uptick in demand from those in the 21–30 age group, and it was focus groups largely made up of such people who expressed a desire for a refresh. But the brand’s core consumers are men aged 35 and above, so any refresh needed to be mindful not to alienate them. Unsurprisingly then, Marfleet made the point that this group of older consumers also had been kept close to the research, though, ultimately, he added, it had been about listening to all of the brand’s consumers and keeping them at the center of everything that had been done.

    I guess this approach goes to the heart of marketing, which is defined briefly as being about identifying consumer needs and determining how best to meet them. But care has to be exercised here; otherwise, like me, you can make an altogether wrong assumption. This refresh is about marketing, so these “needs” have to do with the brand messaging, not the product itself.

    Visual Positioning

    So, if the product remains the same, what is involved in a brand refresh? Well, according to Marfleet, it is ultimately about the brand’s strapline. “It is the visual positioning of the brand and the way that the brand communicates itself,” he said. “So, for as long as we can remember, Rizla has had the strapline of Never Settle [as, for instance, in: Keep Discovering—Never Settle; and Keep Creating—Never Settle]. What we have moved to, again after listening to our consumers, is celebrating our heritage and our legacy in a modern way. And that has led to our new brand positioning, which is, Roll with the Legend—Since 1796.”

    Beyond the strapline, Marfleet said, the refresh was more generally about brand communication, which, of course, raises another question. Isn’t the communication of tobacco and tobacco-related products and brands banned in many jurisdictions, which certainly include most of the markets where rolling-tobacco products and accessories are popular?

    Rizla was definitely limited in how it could communicate its message, Marfleet admitted, but it would be making changes in those channels open to it. So, instore materials would be changing, as would the brand’s online digital presence. A more specific example of the changes being made concerns a shift away from the sponsorship of motor sports and toward music and culture in general. Rizla has supported culture in the past, but now it is shifting all of its brand partnership efforts toward music and culture, which resonates more with the brand’s current consumers. Such a shift can be seen also in Rizla’s launch of a digital partnership with the global media platform Dazed, which positions it in the area of supporting emerging artists.

    Return on Investment

    This is a global refresh that, at the time I spoke with Marfleet, had been rolled out in two key Rizla markets, Italy and Spain, and that was due to be introduced elsewhere in the coming months. It was designed by the Rizla marketing team in close cooperation with a creative agency during a year and a half of weekly workshops that decided, following the sifting of something like 10 iterations, on the new brand positioning.

    The Covid-19 pandemic raised some challenges in respect of these workshops, but the overriding challenge, Marfleet said, had been ensuring that those working on the project got it right. In other words, the crux of the matter is: has it worked as a marketing project, and will it be successful as an investment? Well, apparently there has been excellent feedback after rigorous testing, and consumers in both the 21-plus and 35-plus age groups are said to love the refresh.

    But rolling papers comprise a niche product, and tobacco smoking is under attack, so will the market hold up to such an extent that the investment will turn out to have been worth it? Marfleet clearly believes so. The RYO market, which was the subject of healthy competition, was quite stable at the moment as a result of downtrading, Marfleet said, and Rizla had definitely seen an uptick in those aged 21-plus picking up on RYO. “Given the stable market and our predictions, we definitely feel that the investment into the brand refresh is completely justified and will pay off,” he said.

    Custom Manufacturing

    Of course, while Rizla says its products are aimed at the world’s adult tobacco smokers, it is likely that it will benefit from changes in some jurisdictions where marijuana smoking is being legalized. But on the other side of the coin, market challenges could be thrown up by revisions to the EU’s Tobacco Products Directives (TPD) and regulatory changes made by the U.S. Food and Drink Administration. However, Marfleet said these issues were on Rizla’s horizon. “What I can say is that we are proactively planning for multiple scenarios, especially with the TPD, so that we will be ready to take action whatever the outcome of that may be,” he added.

    Meanwhile, there was another, unofficial focus group that was regularly kept appraised of what was happening with the refresh: the approximately 200 people who work at the Rizla rolling papers factory in Belgium, which supplies the world with such papers. And, according to Factory Manager Kris Smedts, all of the people working at the factory, who make up a wide range of ages, loved the refresh.

    The factory, which was built in 1958 and which, over the years, has been expanded and automated to provide for an annual manufacturing capacity of up to 100 billion paper leaves, spread over a staggering number of SKUs (stock-keeping units), is located on the south side of Antwerp, at Wilrijk. It uses lean manufacturing techniques and is managed by an MRP (manufacturing resources planning) system because, though paper booklets might appear to comprise a simple product, their interleaved presentation is difficult to achieve, especially at high speeds, and the addition of innovations such as cut corners (to ease rolling) and pack-closing mechanisms have, over the years, added to the complexity of manufacture and logistical handling.

    Another layer of difficulty is added because, since rolling papers are a niche product, it is not possible to buy off the shelf the machinery for manufacturing and packing it, so it has to be developed by the factory’s own engineers working with specialized partners. And because rolling papers comprise an evolving product, the factory has a special product development team that works on the design of the new or modified machinery required to manufacture the innovative products needed to stay ahead of consumer demands.

    Finally, despite the refresh, some things will not change, or not much. During my chat with Marfleet, I mentioned a fairly raunchy Rizla marketing campaign used a good while ago, and he agreed that the brand’s marketing archives included campaigns that had been “on the edge of cheeky,” though, over the years, the cheek had been toned down in line with new advertising regulations. Nevertheless, he said, we’ll never forget that Rizla should always be a fun and quirky brand.

  • Imperial Cleared of Anti-competition Charges

    Imperial Cleared of Anti-competition Charges

    Photo: Taco Tuinstra

    The Supreme Court of Ukraine has thrown out a UAH460 million ($16.83 million) fine imposed by the Antimonopoly Committee of Ukraine (AMCU) on Imperial Tobacco Ukraine and Imperial Tobacco Production Ukraine for alleged anticompetitive behavior, reports the Kyiv Post.

    In October 2019, the Antimonopoly Committee fined the local affiliates of Philip Morris International, British American Tobacco, Japan Tobacco and Imperial Brands along with Tedis Ukraine. Concerted actions by the tobacco companies had unlawfully left Ukraine with only one cigarette distributor, Tedis, the AMCU maintained.

    Imperial appealed to the Commercial Court of Kyiv, which ruled in favor of the AMCU. On July 21, 2020, the company paid the full fine to prevent the imposition of additional penalties and to avoid further pressure on the company’s operations by the AMCU.

    After an appeal to the Northern Commercial Court of Appeal was also rebuffed, Imperial turned to the Supreme Court, which has now found in its favor.

    In a Ukrainian-language press release, Imperial Tobacco Ukraine CEO Rastislav Cernak said the ruling was an encouraging sign for all foreign investors in Ukraine.

    “Our company has always acted completely transparently and decently, advocating fair and honest competition, observing all antimonopoly laws not only in Ukrainian legislation but also the principles of protecting economic competition laid down in EU legislation,” he was quoted as saying.

    Earlier, Ukrainian courts threw out the AMCU fines against British American Tobacco and Tedis.

    Imperial Tobacco Ukraine manufactures cigarettes in Kyiv. About 50 percent of its products are exported to 20 markets, including Armenia, the United Arab Emirates and the United States.

  • Imperial Brands Named Climate Leader

    Imperial Brands Named Climate Leader

    Photo: Casimirokt | Dreamstime.com

    Imperial Brands has been recognized as a 2021 Climate Leader by the Financial Times in its first-ever ranking of actions taken by European businesses.

    The Financial Times’ listing identifies the 300 companies across the continent that achieved the highest reduction in core greenhouse gas emissions between 2014 and 2019.

    Imperial is committed to further reducing its carbon footprint. By 2030, from a base year of 2017, the business will cut its own greenhouse emissions by 25 percent and emissions in its supply chain by 20 percent.

    “We are pleased to be highlighted by the Financial Times for our efforts to reduce our impact on the climate,” said Stefan Bomhard, CEO of Imperial, in a statement. “There’s more we need to achieve to address this critical issue, but the recognition we’ve received demonstrates that we’re heading in the right direction.”

    In late 2020, Imperial maintained its position on the CDP’s “A List” for climate change. CDP’s annual environmental disclosure and scoring process recognizes corporate leaders in climate transparency and action.

  • Request to Drop Malawi Exploitation Case

    Request to Drop Malawi Exploitation Case

    Photo: AA+W

    British American Tobacco (BAT) and Imperial Brands will ask the high court in London on Wednesday to throw out a case against them alleging the exploitation of Malawian farmers and their children, reports The Guardian.

    Denying the allegations, the companies are asking that the case be dismissed on the grounds that lawyers for the farming families cannot prove the tobacco they grew ended up in their cigarettes and other products.

    “BAT believes that there is no legal or factual basis to bring these claims, therefore BAT has made an application for the claims to be struck out or stayed,” a BAT spokesperson told The Guardian.

    The case was brought after investigations by The Guardian suggested the companies employed child labor and subjected farmers to poor working conditions.

    Leigh Day lawyers argue that the farmers’ conditions of work breach the definition of forced labor, unlawful compulsory labor and exploitation under Malawian law.

    They also say that they breach the U.K. Modern Slavery Act, article 14 of the European convention on human rights and the International Labor Organization definition of forced labor.

    The heart of the claim is that two of the largest tobacco companies cynically exploited impoverished tobacco farmers from Malawi and their children.

    “The heart of the claim is that two of the largest tobacco companies in the world cynically exploited impoverished tobacco farmers from Malawi and their children,” said Martyn Day, senior partner at Leigh Day.

    “Fortunately, the two defendant companies are based here in Britain, giving our courts jurisdiction to adjudicate these claims.” He said he was optimistic the judge would allow the claims to progress toward a full trial.

    Several thousand of Malawi’s poorest tobacco tenant farmers have joined the claim. They sell their crop to a leaf-buying company in Malawi, which they say supplies BAT and Imperial.

  • Imperial Brands Delivers ‘Solid’ First-Half Results

    Imperial Brands Delivers ‘Solid’ First-Half Results

    Photo: Imperial Brands

    Imperial Brands reported net revenue of £15.57 billion ($22.1 billion) in the six months ended March 31, 2021, up 6.1 percent over the net revenue it reported in the first half of 2020. Operating profit increased 77 percent to £1.64 billion. On an organic adjusted basis, Imperial Brands reported net revenue of £3.57 billion, up 2.4 percent from 2020. Adjusted operating profit was £1.59 billion compared with £1.46 billion in the first six months of 2020.

    “We have made a good start in implementing our new strategy to transform Imperial and remain on track to meet full-year expectations,” said Imperial Brands CEO Stefan Bomhard in a statement.

    “In tobacco, we have put in place a clear market prioritization to increase focus on our best opportunities for sustainable profit delivery. We have begun to stabilize the aggregate market share performance across our top five priority markets, reflecting the changes we have made to tighten performance management and the good underlying momentum established over the past year. This is an encouraging start and one that I look forward to building on over time as we begin to step up investment in new strategic initiatives.

    We have made a good start in implementing our new strategy to transform Imperial and remain on track to meet full year expectations.

    “Our NGP [next-generation products] performance has improved, albeit against a weak comparator period. We have focused investment more tightly behind our NGP market strongholds and are on track to activate market trials in vapor and heated-tobacco later this year. Our aim is to create a successful NGP business that meets consumer needs and, over time, can make a meaningful contribution to harm reduction.

    “We have started to change our culture and ways of working, including developing a new market cluster structure to simplify the organization and allocating resources more effectively. I have now assembled my new Executive Team with key external hires who have the necessary skills and expertise to complement Imperial’s existing tobacco experience. This has significantly strengthened the capabilities we need to support the successful delivery of the new strategy.

    “All of this has been achieved against the background of the ongoing global pandemic, and I would like to thank employees throughout the business for their hard work and willingness to embrace change.”

  • Kim Reed to Lead ITG Brands

    Kim Reed to Lead ITG Brands

    Photo: ITG Brands

    ITG Brands has named Kim Reed president and CEO effective June 1. As president and CEO, Reed will oversee all U.S. employees and operations, reporting to Dominic Brisby, division director for the Americas, Africa, Asia and Australasia for Imperial Brands. Reed will succeed Oliver Kutz, who will assume the role of cluster general manager for Central Europe and Ukraine for Imperial Brands as part of a planned transition.

    “I would like to thank Oliver for his leadership in recent years and am thrilled to announce that Kim Reed will serve as the next president and CEO of ITG Brands. Kim has a wealth of experience in the consumer goods sector and a demonstrated record of success in both sales and executive leadership,” said Brisby in a statement. “Kim has expertly led the largest sales transformation in ITG Brands’ history and is the perfect steward for the continued success of Imperial’s largest market.”

    Reed has served as a member of the ITG Brands leadership team for two years in her capacity as executive vice president of sales. According to ITG Brands, Reed has consistently delivered exceptional results during her tenure, including establishing ITG Brands as a market leader in sales of factory manufactured cigarettes and mass market cigars while leading a sales organization of more than 1,000 employees responsible for $3 billion in net revenue.

    Reed designed and oversaw a comprehensive sales transformation strategy that encompassed ITG Brands’ largest-ever external recruitment for field sales while prioritizing a diverse and inclusive culture.

    “I am honored to accept the role of chief executive officer of ITG Brands,” said Reed.

    “I want to thank Oliver for his leadership and his partnership in creating such a fantastic and talented team. I am excited to engage across all aspects of the business and build upon our existing momentum to further accelerate growth.”

    Oliver Kutz

    Prior to joining ITG Brands, Reed led several large sales organizations for major consumer brands. She held various positions at the Kellogg Co., culminating in a role as general manager of U.S. sales, and served in numerous roles at the Pepsi Bottling Group over the course of over 17 years. Reed also serves as the chair of the Manufacturer’s Convenience Distributor Association and a member of the executive leadership council and previously served as a member of the board of CALIBR. She has been recognized as a 2021 top woman in convenience by Convenience Store News and twice as a top woman executive by Progressive Grocer.

  • New CFO of Imperial Brands to Start Earlier

    New CFO of Imperial Brands to Start Earlier

    Photo: Casimirokt | Dreamstime.com

    Lukas Paravicini will join Imperial Brands’ board of directors on May 1 and become chief financial officer on May 19, the day after the company publishes its half-year results.  

    Oliver Tant will step down from the board on May 19 and will be available to work with Paravicini through the end of June to ensure a smooth and orderly handover.

    The dates have been brought forward from those announced on Feb. 17, when Imperial Brands first revealed Paravicini’s appointment.

    Before joining ED&F Man Holdings, Paravicini held senior positions at Fonterra, the world’s largest dairy exporter. He was chief financial officer from 2013–2017 and chief operating officer of global consumer and foodservice business from 2017–2018. Prior to that, he spent 22 years with Nestle in various senior finance and general management roles, working in South America and latterly in Switzerland for Nestle Professional, the food service arm of Nestle, first as chief financial officer and then as vice president and general manager of Europe.

    As chief financial officer of Imperial Brands, Paravicini will receive an annual salary of £730,000 ($1 million) and a pension allowance.

  • Imperial Expects Results in Line With Guidance

    Imperial Expects Results in Line With Guidance

    Photo: Casimirokt | Dreamstime.com

    Imperial Brands is on track to deliver full-year results in line with the guidance it gave in November, with low-to-mid single-digit organic adjusted operating profit growth at constant currency, the company announced in a trading update.

    First half group net revenue is expected to grow by at least 1 percent on an organic constant currency basis, driven by continued strong pricing in tobacco as well as some benefit from growth in next-generation product (NGP) revenues against a weak comparator period.

    “In tobacco, we have begun to achieve aggregate market share growth in our five priority markets with gains in [the] U.S., U.K. and Spain more than offsetting declines in Germany and Australia,” the company wrote in a statement. “We are investing behind the operational levers outlined at our January 2021 Capital Markets Day in each of these priority markets to drive performance improvements over time. Overall tobacco volumes are in line with expectations, although Covid-19 continues to affect consumer buying patterns across different channels and markets.

    “In NGP, our clear focus is to improve performance, returns and capabilities. Our preparations for market trials in vapor and heated-tobacco later this year are on track.”

    Imperial Brands expects first half group adjusted organic operating profit growth to be at least mid-single digit at constant currency, benefiting primarily from significantly reduced losses in NGP and increased logistics profit. Tobacco operating profit has been impacted by a lower duty windfall in Australia and the impact of U.S. trade inventories following the higher wholesaler purchases in March 2020 to meet Covid-19 pantry loading demand.

    “Full-year adjusted group operating profit will reflect increased investment consistent with our strategic plans and is expected to be in line with our guidance for low-mid single digit organic growth at constant currency,” the company wrote.

    The interim results for the six months ended March 31, 2021, will be announced on May 18, 2021.

  • Imperial Celebrates Women’s Day

    Imperial Celebrates Women’s Day

    Alison Clarke
    (Photo: Imperial Brands)

    Employees of Imperial Brands are taking part in a series of online activities today to celebrate International Women’s Day (IWD).

    The event aims to highlight the significant benefits of gender balance to society and to the business and the acts people can take as individuals to call out gender bias.

    The program of events has been arranged by a group of employees from various parts of the Imperial business and builds on a range of country-specific activities held in recent years. 

    Attendees will hear presentations and stories from senior female leaders in the business, including Chief People and Culture Officer Alison Clarke, and several external speakers. Among the attendees will be Imperial Brands’ chair, Therese Esperdy, and Imperial Brands’ CEO, Stefan Bomhard, who will make an opening address.

    The theme of this year’s International Women’s Day is Choose To Challenge. “This is the culture we want to build at Imperial: a culture of individuals that think for themselves and bring their best game every day because they feel they belong and are included,” said Bomhard in a statement.

    “We are building a company with a challenger mindset and that means having a diverse population of employees who are open to change and new ideas.”

    Imperial is committed to increasing female representation with senior management roles to 30 percent by 2023. Last year, Imperial conducted a global diversity and inclusion study, and the results will help shape the company’s new culture and ways of working in support of its new strategy.

  • Imperial Brands Names Chief Consumer Officer

    Imperial Brands Names Chief Consumer Officer

    Photo: Casimirokt – Dreamstime.com

    Imperial Brands has appointed former PepsiCo and Fonterra executive Anindya Dasgupta as chief consumer officer effective May 1, 2021.

    This is a role reporting to CEO Stefan Bomhard and created to reinforce the importance of consumer centricity to the company’s new strategy and five-year plan.

    “Anindya has outstanding consumer, brand and innovation experience, having held senior roles in significant international companies such as PepsiCo, GlaxoSmithKline and Fonterra,” Bomhard said in a statement. “The consumer is at the core of our new strategy, and Anindya will ensure that we have the right marketing, brand and portfolio management capabilities to successfully deliver our five-year plan to transform Imperial.”

    “Imperial is a company with great potential, and I am delighted to be joining at a time when Stefan and the team are implementing an exciting strategy that will rejuvenate the business and unlock value for our stakeholders,” said Dasgupta.

    Dasgupta has held executive international marketing, brand and general management positions in multiple markets, including the U.S., India, Singapore, Thailand and the U.K. After working in various positions within the consumer goods division at GlaxoSmithKline, he joined PepsiCo where he held various roles, including senior director of the global beverages group. He then joined the world’s largest dairy exporter, Fonterra, where his roles included chief marketing officer and global head of consumer business.