Big Tobacco is hunting market shares
As raising tobacco prices threaten cigarette sales, tobacco giants are investing in electronic cigarettes to make up the losses. With a price hike amounting to 10€ per packet in France, manufacturers are expecting a dip in sales of approximately 20% in 2018.
With the growing popularity of vaping and the market potential for these devices, cigarette companies are branching out. Now active on the e-cig market, they have also developed new nicotine delivery methods such as Heat-Not-Burn (HNB) tobacco products. Each company is investing in proprietary technology to take the lead in the cigarette 2.0 market. Imperial tobacco, for example, is marketing the Blu pen-shaped cigarette. Philip Morris International, on the other hand, created the Iqos.
They promise consumers a new kind of cigarette containing heated tobacco without the combustion, “supposedly less harmful to health”.
A major commercial potential
Big Tobacco is investing colossal amounts into these next-generation cigarettes. Philip Morris International in particular pooled 4.5 Billion dollars to conquer new customers.
The IQOS, their flagship device, is already highly successful. The device generates heated tobacco smoke, that represents a sort of middle-ground between smoking and vaping. Initial results are highly encouraging for the company, who wish to replace tobacco with these new alternatives. Reported by Les Échos, this fact indicates that the big players in tobacco will not be going bankrupt any time soon due to these market changes. Tobacco vendors will most likely be fine as well, given have been granted 40% of purchasing contracts on these alternative tobacco products.
If HNB devices appear promising, they are not as popular as electronic cigarettes. This could be great news in terms of public health. Indeed, users are still waiting for scientific evidence to conclusively state these new products are safe. As it is, consumers seem to prefer vaping which has been proven to be 95% less harmful to health than cigarettes.
