Tobacco giant Philip Morris sees a future without cigarettes-Los Angeles Times

2021-12-01 08:31:57 By : Mr. Terry Ho

The manufacturers of Marlboro and other cigarette brands have a new mission: to let 1 billion smokers around the world quit smoking.

You read that right. Philip Morris International is trying to persuade customers to switch to its heated tobacco products, which it says is a better alternative because they are smoke-free. Ultimately, the company hopes that the government will completely regulate cigarettes.

Given Big Tobacco's long history of misleading and misleading the public, some suspicions are justified. Although the US Food and Drug Administration has authorized the commercialization of Philip Morris' IQOS electronic device and allowed it to be sold as a "risk-reduced modified tobacco product," the agency said that further scientific research is needed. It also added this warning: "It is important to note that these products are not safe."

Nonetheless, nearly two centuries after selling cigarettes, Philip Morris is still betting on its heat-not-burn products-although executives admit that they need some time to adapt and most smokers will not like them immediately . To date, the world's largest tobacco company has invested more than US$8.1 billion in the development of smoke-free business. IQOS is currently sold in 64 countries/regions and has an estimated 17.6 million users.

"Changing smokers around the world is a very positive and profitable business for us," said Martin King, CEO of Philip Morris International America. "In 10 to 15 years, we think that cigarettes may be completely withdrawn from the market-people will quit smoking, or, if they are still using nicotine, it will exist in a non-flammable way."

We discussed with King about the company's change of direction and the challenge of trying to get customers out of addictive products (and another). For the sake of space and clarity, this interview has been edited.

How long has Philip Morris been researching smoke-free products?

For decades, we have been researching and trying to launch non-combustible products and products that reduce exposure. We did make several attempts to heat tobacco products, but none of them succeeded: the taste does not exist; the electronics are too big.

We came up with a way to heat the tobacco with a blade from the inside, which can provide a better taste and experience. Technology has evolved, so electronic devices are more complex and can control the temperature profile of suction. In 2014, we finally have a product that we are confident that we can use.

The IQOS heated tobacco system heats the tobacco in a very controlled manner to release aerosols containing nicotine and some flavors, thereby avoiding burning. The idea is to create a product that smokers can switch to for taste, ritual and satisfaction, and try to make it as close as possible to cigarettes.

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How close did we talk?

The taste is different from cigarettes because, unfortunately, some of the tastes that people appreciate in cigarettes actually come from burning. More is to teach yourself what you like. Once you get it and you appreciate the new taste, going back to the old taste is very unpleasant. The level of nicotine delivered is very similar to cigarettes. It starts and stops like a cigarette.

Is there scientific evidence that heat-not-burn products are safer alternatives to cigarettes? If so, how safe?

Some components-such as carbon monoxide produced by combustion-will be completely eliminated. But overall, compared with combustible cigarettes, [hazardous chemicals] are reduced by about 90% to 95%. These indicators indicate that there should be significant health benefits. Any properly made non-combustible material, whether it is e-cigarettes, heat-not-burn or oral products, can greatly reduce exposure because there is no combustion.

It is difficult to say what effect this will have on reducing tobacco-related diseases. This is where we continue to develop science. The only way to be truly sure is to observe what happens to real people and use it over time. This is a question that we may not be able to answer in the near future.

[Note: Last year, the FDA stated that IQOS was “unsafe and not'FDA approved'”, but determined that Philip Morris has demonstrated that the device “significantly reduces the production of harmful and potentially harmful chemicals compared to cigarette smoke. In addition, studies have shown that switching completely from burning cigarettes to the IQOS tobacco heating system can significantly reduce human exposure to 15 specific harmful and potentially harmful chemicals."]

What are some of the other benefits you are trying to sell to consumers?

Smokeless and odorless-People who use this device will quickly notice that compared to smoking, their clothes have no odor, and their hair has no odor, and they will not bother people around as before.

Philip Morris said that its focus is to change existing adult smokers. How do you do this without attracting non-smokers, especially minors?

If you walk into one of our stores anywhere in the world [In the United States, electronic equipment and heating rods are currently available at IQOS stores in Atlanta, Charlotte, North Carolina, and Richmond, Virginia. Others will be added soon Market], the first question you will get is whether you are an adult and whether you smoke. If someone says, "No, I don't smoke, I'm just interested in accepting this," we say, "This is not really for you."

Obviously someone can go in and tell you they are smokers. But this is to ensure that people understand that this is for smokers. We have been very concerned about this issue and are careful about how we put these products on the market and make sure that we don’t try to get people to inhale nicotine in any way — of course, especially young people. Because we know from the long-term experience of the tobacco war that this will be a very, very negative result.

How is IQOS different from Juul and other e-cigarette products?

They are two completely different products. The heat-not-burn product contains tobacco and uses batteries and heat transfer to heat it to a very controllable temperature to ensure that it does not burn and reaches a combustion level. Juul products use liquids.

We also produce e-cigarettes, and we think [they] can play a role in providing consumers with different choices because they decide what to switch to after they quit smoking.

This is not only a kind of altruism, but also the right thing to do for consumers...It is also good for our shareholders​​.

Martin King, CEO of Philip Morris International America Inc.

To become an IQOS user, you must first purchase electronic equipment, which consists of a battery-powered stand, a charger box and a tobacco heating rod. how much does it cost?

The price of the device itself is usually between 50 and 100 US dollars. For people, the important first step is to see it as an important enough benefit to be able to decide which kind of money to spend.

How is the progress so far?

Last year, we sold 76 billion consumable equivalent cigarettes in the heated tobacco system, and we are moving towards the goal of selling 140 to 160 billion cigarettes by 2023. We already have 25% of our revenue from these new products.

What is the biggest challenge for people to switch?

For most people, it feels like they can meet and make changes. In other words, the taste and satisfaction are close enough. This is not easy. You must insist on not smoking for at least one week or two weeks to change your expectations of your taste. So this requires a commitment-people must feel that they really want to do it. In many places, we have coaches to help people solve this problem and explain the need to stop using cigarettes altogether, because if you mix the two, it becomes more difficult.

How successful are people in converting to IQOS?

Usually about 70% makes it fully converted. This is really high compared to people who quit smoking. We don’t advocate stopping people’s efforts to quit smoking — I think this is an important part of it — but if you really want to make a difference, you are much more likely to change this group of people than you do. They quit smoking.

Of course, but as a company, Philip Morris clearly wants people to change their minds, rather than give up tobacco altogether.

The reality is that the method of completely quitting smoking is not successful enough-we still have a lot of people smoking. Therefore, from our point of view, by providing people with these better choices and persuading them to switch, there are many benefits that can be obtained from a public health perspective or from a business sustainability perspective. Our results are closely related to our successful conversion of consumers. This is not only a kind of altruism, but also the right thing to do for consumers-which is of course correct-for public health-which is of course correct-but it is also good for our shareholders​​. We do this for many reasons, and these reasons are well combined.

The prevalence of smoking varies from country to country. Does this make it difficult to develop a cohesive strategy?

You will be surprised to find that the health warnings on all cigarettes in the world are very clear. The old notion that there are many countries in Asia and other places that have not really solved the harm of tobacco, or that people don’t know the harm in these places is outdated. The world has accepted the idea and fact that smoking is harmful. So these products are closely related to us in every country.

What about smokers who cannot be persuaded?

The idea is that at some point, you have enough people to switch, and you have proven that there are viable alternatives. Then the right thing to do is to get the government to step in and help push other smokers to lower-risk areas... under some kind of regulatory plan, where you can really phase out cigarettes without causing huge negatives Impact on the market, such as a large amount of illegal trade or people resisting it because you restrict their freedom of decision. This is not something we can authorize. Obviously, if smokers decide that they will not change, then they have this right.

Can the conversion save costs?

In some countries, yes. There are some countries in Europe-for example, in Italy, taxation differences are very large. For example, switching from a Marlboro smoker to IQOS heated tobacco can actually save you money. In the United States, its price is very similar.

If the idea is to change existing adult smokers, how do you ensure that your business is viable in the long-term? It doesn't sound sick, but eventually existing smokers will die, then what?

On the one hand, this is a very distant future. The second part is that this is why we are also developing this approach beyond nicotine strategy.

Of course we have studied cannabis, and we will continue to monitor the situation there and learn from the market. Our focus is on heating tobacco; however, we have announced that we will seek to develop products other than nicotine, including botanicals and potential respiratory drug delivery technologies, which are used in all our work.

What are your expectations for the next few years?

We have found that at least some countries are in a leading position and have shown that they can fully transform into a smoke-free future. Then I think it’s just a domino fall, because other countries think it’s great for consumers and public health. Once you see the success of a large number of countries in this regard, I think it is difficult to stay in the past. When was the last cigarette on the earth smoked? I can't tell you.

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Andrea Chang is a wealth reporter for the Los Angeles Times. She has previously served as the first column editor, associate food editor and business assistant editor, covering areas including technology and retail. Zhang joined the newspaper in 2007 after graduating from Northwestern University's Medier School of Journalism. She grew up in Cupertino, California.

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