The maker of Marlboro and other cigarette brands sold outside of the U.S. has a new mission: getting the world’s 1 billion smokers to quit smoking.
You read that right. Philip Morris International Inc., which was spun off from Henrico County-based Altria Group as a separate public company in 2008, is trying to persuade customers to switch to its heated tobacco products, which it claims are safer because they are smoke-free.
Eventually, the company hopes, governments will regulate cigarettes out of existence altogether.
Given Big Tobacco’s long history of distortions and misleading the public, some skepticism is in order.
The FDA has authorized the commercialization of Philip Morris International’s IQOS electronic device and is allowing it to be marketed in the U.S. by Altria as “a modified risk tobacco product” with “reduced exposure.” But the agency said further scientific research was needed.
It also added this warning: “It is important to note that these products are not safe.”
Still, after nearly two centuries selling cigarettes, Philip Morris International is staking its future on its heat-not-burn products — even as executives admit they take some getting used to and that most smokers won’t immediately enjoy them.
The world’s largest tobacco company, with corporate offices in New York and Switzerland, has so far sunk more than $8.1 billion into developing its smoke-free business. IQOS is sold in 64 countries, with an estimated 17.6 million users.
IQOS is a battery-powered device that heats tobacco instead of burning it. Altria, the parent company of top U.S. cigarette maker Philip Morris USA, a has been selling the device in the U.S. since 2019 under an exclusive agreement with Philip Morris International.
“Converting the world’s smokers is an extremely positive and lucrative business for us,” said Martin King, CEO of Philip Morris International’s America division. “In 10 to 15 years, we think cigarettes can be out of the market entirely. People will quit or, if they’re still using nicotine, it’ll be in a noncombustible way.”
Here’s an interview with King about the company’s change in direction and the challenges of trying to wean customers off an addictive product (and onto another). This interview has been edited for length and clarity.
How long has Philip Morris International been working on smoke-free products? We’ve been researching and trying to come up with noncombustible products and reduced-exposure products for decades. We did have several attempts with heated tobacco products that were not successful. The taste was not there; the electronics were too big.
What was the breakthrough? We came up with a way of heating the tobacco with a blade from the inside that gave a much better taste and experience. The technology had evolved so the electronics were more sophisticated and could control the temperature profile of the puffing. In 2014, we finally had a product that we were confident would work.
How does IQOS work? The IQOS heated tobacco system gets away from combustion by heating the tobacco in a very controlled manner to release an aerosol, which contains nicotine as well as some flavors. The idea is to create a product which smokers can switch to because of the taste and the ritual and the satisfaction, and trying to keep that as close as possible to a cigarette.
How close are we talking? The taste is different from a cigarette because, unfortunately, some of the taste that people appreciate in cigarettes actually comes from the burning. It’s more of a matter of teaching yourself what you like. Once you’ve gotten that and you appreciate the new taste, going back to the old taste is very unpleasant. The level of nicotine delivered is very similar to a cigarette. It starts and stops like a cigarette.
Is there scientific proof that heat-not-burn products are a safer alternative to cigarettes? If so, how much safer? There are some constituents — like carbon monoxide, which comes from burning — which are eliminated completely.
But the overall tends to be around 90 to 95% reduction (in harmful chemicals) from a combustible cigarette comparison. Those are indicators that there should be a significant health benefit. Any properly made noncombustible, whether it’s an e-cigarette or heat-not-burn or an oral product, has the potential to be greatly reduced in exposure because there’s no combustion.
It’s hard to say what that will result in as far as tobacco-related disease reduction. And that’s the part that we continue to develop the science on. The only way to be really certain is to watch what happens to real people, with real usage over time. That’s something we may not have an answer for in the near future.
(Note: Last year, the FDA said IQOS was “not safe nor ‘FDA approved’” but determined that Philip Morris International had demonstrated that the device “significantly reduces the production of harmful and potentially harmful chemicals compared to cigarette smoke. Furthermore, studies showed switching completely from combusted cigarettes to the IQOS Tobacco Heating System significantly reduces the body’s exposure to 15 specific harmful and potentially harmful chemicals.”)
What are some of the other benefits you’re trying to sell consumers on? No smoke, less odor — people who use this device very quickly notice that versus smoking cigarettes, their clothes don’t smell, their hair doesn’t smell, they don’t bother people around them as much.
Philip Morris International says its focus is on converting existing adult smokers. How do you do that without attracting nonsmokers, especially underage ones?
If you walk into one of our shops anywhere in the world (in the U.S., the electronic devices are currently sold at IQOS stores operated by Altria in Richmond’s Carytown shopping district as well as in Atlanta and Charlotte, N.C., with additional markets to be added soon), the first question you’re going to get is: Are you of age, and are you a smoker? If someone says, “No, I’m not a smoker. I’m just interested in taking this up,” we say, “This isn’t really intended for you.”
Obviously somebody can go in and tell you they’re a smoker. But it is an effort to make sure people understand that this is directed toward smokers. We were always very mindful of this issue and careful about how we put these products out there and making sure that we don’t, in any way, seek to get people into nicotine — especially, of course, youth. Because we knew from our long experience with the tobacco wars that this would be a very, very negative outcome.
How has it been going so far? We sold 76 billion of the consumable equivalent cigarettes in the heated tobacco system last year and we’re headed toward a goal by 2023 of 140 to 160 billion units. Already, 25% of our revenue is coming from these new products.
What are the biggest challenges in getting people to convert? For most people it’s feeling like they can be satisfied and make the switch. In other words, that the taste, the satisfaction, is close enough. Which is not easy. You have to stick with it for at least a week or two weeks and not smoke cigarettes in order to convert yourself on what you expect from taste. So that takes a commitment — people have to feel like they really want to do it. In many places, we have coaches to help people with that and explain the need to stop using cigarettes entirely because if they mix the two, it makes it harder.
How successful are people at converting to IQOS? Usually around 70% make it to full conversion. Which is really high compared to people quitting smoking. We’re not advocating stopping efforts to get people to quit — I think that’s an important piece of it — but if you really want to make a difference, you have a far higher likelihood of getting that group of people to switch than you do of getting them to quit.
Sure, but as a corporation, Philip Morris International clearly wants people to convert, not give up tobacco entirely.
The reality is the quitting entirely approach has not been successful enough — we still have so many people smoking. So from our perspective there’s so much to be gained by offering people these better choices and convincing them to switch, both from a public health point of view but also from the sustainability of the business. Our results are very much tied to our success in converting consumers. It’s not just an altruistic, it’s-the-right-thing-to-do for consumers — which is true, of course — and for public health — which is true, of course — but it’s also good for our shareholders. We’re doing this for a whole raft of reasons that all tie together very nicely.
What’s your hope for the next few years? That we find at least a number of countries to lead the way and show that they can make this transformation to a smoke-free future completely. Then I think it’ll just be the dominoes falling as other countries see that this has a big benefit for consumers and public health. Once you’ve seen a significant number of countries be successful with this, I think it would be hard to stay stuck in the past. When is the last cigarette smoked on Earth? I can’t tell you that.
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