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All Big Tobacco companies reported growth in their smoke-free segments in the first half and second quarter of 2024, reflecting a broader industry trend towards diversification from traditional cigarettes.
For example, Philip Morris International (PMI) recorded smoke-free expansion in the first half of the year with its Veev vaping products, which became the closed-pod leader in five European markets within 12 months of launch. During the presentation of its financial results, the company said its smoke-free products are now present in 90 markets, following recent launches of Iqos, Zyn and Veev.
Likewise, Altria saw encouraging results from its e-cigarette brand Njoy, expanding to over 100,000 stores and securing premium positioning. During the presentation of its financial results, Altria also reported an increased illicit activity across multiple tobacco categories, including pouches and cigarettes, blaming the US Food and Drug Administration (FDA) for its inaction, lack of enforcement and slow pace of authorisations for smoke-free products.
British American Tobacco (BAT) experienced a revenue decline but continued to see growth in new categories, anticipating stronger performance in the second half of the year thanks to new launches.
No comment on regulations affecting future earnings
While the companies share common goals in transitioning towards reduced-risk products, they differ in market focus and performance across product segments.
PMI and BAT boast substantial international operations, excelling in markets like the EU and Japan, while Altria remains primarily focused on the US market. Altria faced declining cigarette volumes, whereas PMI reported growth in both heated tobacco sticks and traditional cigarettes. BAT faced challenges in conventional tobacco sales but made progress in vaping.
Interestingly, none of the companies have addressed the regulatory environment and its potential impact on future earnings, suggesting uncertainty or strategic ambiguity in managing future challenges.
PMI, Altria and BAT have all emphasised their commitment to reduced-risk products, despite facing varying degrees of success across different regions and product segments. However, the lack of discussion on regulatory challenges raises concerns about the industry’s preparedness for potential changes in legislation. As these companies navigate shifting consumer preferences and regulatory landscapes, their adaptability will be crucial for sustained growth.
– Antonia Di Lorenzo ECigIntelligence staff
