Seven years from now, one of the world’s leading innovative Tobacco Companies, Phillip Morris International (PMI), could realize its target of eliminating combustible cigarettes and becoming a smoke-free company by 2030.
PMI Chief Executive Officer (CEO), Jack Olczak told a Technovation Summit in Switzerland that the target was within reach. PMI envisages having more than two-thirds of the company’s net revenues from smoke-free products. Latest PMI data shows smoke-free net revenues reached one-third (36.2%) of total revenue in the third quarter of 2023, putting the company on track to reach its ambition of 2/3 by 2030.
The company first made the smoke-free future commitment in 2016. According to Olczak, they have already made significant progress toward replacing cigarettes with better alternatives for those adults who would otherwise continue to smoke.
“10 years is more than enough to put smoking cigarettes in the museum and I am serious about this conversation,” said Olczak.
“If there is a concentrated effort, smoking can be eliminated in less than a decade. I think there will be markets and there will be countries where the smoking rates can be reduced.”
He added that IQOS, their flagship product is already in 70 markets across the world, and other products on their portfolio have already penetrated different markets across the world.
“Japan is the largest market that we have and is the market with the longest history with IQOS. The other product that we have is the E-cigarette which has also been helping adult smokers switch to safer nicotine products. We also have to remember that at the same time, these products are and have already helped millions of smokers.”
PMI Vice President of International Communications and Engagement, Tommasso Giovanni said the vision to eliminate combustibles is backed by their huge scientific investment.
“We are doing everything to get there. We are investing heavily in Research and Development. We employ today over a thousand people in Research and Development. We have experts, engineers, people with chemistry backgrounds, and various expertise who are not in many circumstances required in the traditional tobacco industry,” said Giovanni.
“We also have other products, from Snus to Pouches to E-Cigarettes. 27 plus million people have adopted the product with over 70 percent abandoning cigarettes. This is not bad progress I would say, even though more can be done. We continue to invest, we continue to do everything in our power. Change can be accelerated if everyone embraces it and if governments, the Public Health Community, Non-Governmental Organisations (NGOs), and consumers go in the same direction.”
In many countries, however, adult smokers are still being denied access to smoke-free products—and accurate information about them. PMI appealed to regulators in these markets to understand the science behind smoke-free products and the critical role they could play in helping adult smokers who can’t leave cigarettes behind for good.
According to PMI data, as of September 30, 2023, their smoke-free products were available in 82 markets and they expect IQOS to be in 100 markets by 2025. Their ambition is for smoke-free products to account for two-thirds of total net revenues by 2030 and with the right regulatory frameworks, dialogue, and support from civil society, cigarette sales can end within 10 to 15 years in many countries.
Meanwhile, as of September 30, 2023, PMI estimates that there were approximately 27.4 million IQOS users, 72% of them, or 19.6 million adult smokers, have switched to IQOS and stopped smoking, with the balance in various stages of conversion.
On July 7, 2020, the U.S. Food and Drug Administration (FDA) issued decisions on modified risk tobacco product (MRTP) applications for IQOS and three HeatSticks variants (the IQOS tobacco heating system) submitted by PMI in December 2016. In doing so, the agency found that the issuance of exposure modification orders with reduced exposure claims would be “appropriate to promote public health and is expected to benefit the health of the population as a whole.”
In November 2022, PMI acquired Swedish Match – a leader in oral nicotine delivery – creating a global smoke-free champion led by the companies’ IQOS and ZYN brands. The FDA has authorized Swedish Match’s General Snus with modified risk information as Modified Risk Tobacco Products (MRTPs).
Since 2008, PMI has invested more than USD 10.5 billion in the development, scientific substantiation, manufacturing, commercialisation, and continuous innovation of smoke-free products, with USD 120 million invested in the construction of PMI’s Research and Development facility, the Cube, in Neuchâtel, Switzerland.
