Philip Morris International Delivering a smoke-free future

Leading international tobacco company Philip Morris is committed to building a smoke-free future. After 10 years of R&D and significant investment, the company launched IQOS – one of the most sophisticated products in the reduced risk market – in the UK in 2016.

IQOS isn’t a cigarette, nor is it a vape. The device uses heated tobacco technology to offer the closest alternative to smoking and is used by millions of people worldwide.

With the menthol cigarette ban fast approaching, there’s a further opportunity for Philip Morris to switch smokers to a less harmful alternative, and wholesalers and independent retailers have a big part to play. Wholesale Manager spoke to Kate O’Dowd, Head of Field Force, UK&Ireland, Philip Morris Limited to find out more…

What does your role as Head of Field Force UK and Ireland involve?

I have the exciting role of managing our business to business and business to consumer Field Force across the UK and Ireland. The role fundamentally involves me turning our vision and strategy for a smoke-free future into actions for our Field Force Team, who engage with our retailers and consumers on a day to day basis.

Do you personally spend time working with wholesalers? What about with independent retailers and convenience stores?

Our key accounts team are dedicated to working with wholesalers across the UK. I am very involved with a number of convenience store associations and every single week ensuring that I spend time in stores visiting retailers or hosting engagement sessions with independent retailers across the country.

How does the IQOS business fit into your (Philip Morris) overall structure?

For Philip Morris Limited (PML), IQOS heated tobacco sits at the heart of our transformation into becoming a smoke-free business. IQOS follows a £4billion research and development investment by Philip Morris International (PMI) in smoke-free alternatives over the past decade. 10 million adult smokers around the world have already stopped smoking and switched to IQOS.

Not a vape, nor a cigarette – IQOS heats tobacco rather than burning it. It produces 95% less harmful chemicals compared to cigarettesii, and by using real tobacco instead of liquid, IQOS delivers a more familiar and satisfying tobacco experience. 80% of smokers who try IQOS for 7 days switch completely from cigarettes.i

The vaping category is widely referred to in the industry as Next Generation Products, as it is moving consumers on from tobacco to next generation products. How do you define the Next Generation Products category? Can you give us a quick recap on the story of Philip Morris’ involvement in NGP products worldwide and in the UK?

To us, Next Generation Products are those which are disrupting the traditional tobacco industry and helping smokers switch away from cigarettes to a better alternative. At Philip Morris, we are undergoing the biggest transformation in our 172-year history by switching away from cigarettes to smoke-free alternatives.

This is the right choice for our company and beneficial for society. That is why we’ve invested billions of pounds into developing IQOS, which is the only ‘heat not burn’ product in the UK. We believe we can have a major impact on public health by offering smokers better, scientifically-substantiated alternatives.

How big is the IQOS brand in the UK and how big is the NGP category overall here? How fast is the IQOS brand and the NGP category growing in the UK?

To date, we have sold more than 100,000 IQOS devices in the UK and the sale of heated tobacco sticks (‘HEETS’) is growing 2-3% each week. Our research shows that 80% of smokers who try IQOS for 7 days switch completely from cigarettes.i

Who are the biggest purchasers of your NGP products here? How effective are NGP products in helping people switch from traditional cigarettes and give up altogether? What are the stats for people giving up smoking by vaping?

From a cash and carry and wholesale perspective, the biggest buyers of HEETS, are the large national wholesalers due to their scale in the UK marketplace. It’s clear that there is a huge role for smoke-free products, like e-cigarettes and heated tobacco, to help people switch from traditional cigarettes if they can’t quit completely. With heated tobacco, 80% of smokers who try IQOS for 7 days switch completely from cigarettes.i How are you helping wholesalers and independent retailers capitalise on the Menthol cigarette ban?

In the run up to the menthol cigarette ban, we are offering retailers the opportunity to register to stock our Menthol Heated Tobacco Kit which will contain the IQOS device and two packs of mentholated HEETS. The kit makes it easy for retailers to sell to consumers – with one product that gives everything smokers need to switch to a less harmful alternative. We have also set up an online hub for retailers to register at [menthol-ban-retail.co.uk].

Once registered, retailers will receive the latest information on selling IQOS and HEETS, their margins and potential to generate sales. We have also increased our field force and will be launching a dedicated call centre to answer any queries retailers may have. With IQOS set to be more widely available in the independent retail channel in the coming months, we would encourage wholesalers to stock up on HEETS to meet increased demand from their customers.

What sets your products apart from other vaping products eg vaping device quality, vape liquid quality, flavour options?

It’s important to be clear that IQOS is not a vape, nor a cigarette. It uses heat-not-burn technology rather than liquid. While not risk free, IQOS generates on average 95% less of the harmful toxins found in cigarette smoke.ii And by using real tobacco instead of liquid, the device delivers a more familiar and satisfying tobacco experience with no smoke, ash and less smell.

Please explain how IQOS HEETS work?

A heated tobacco stick is inserted into the IQOS device which uses state of the art technology and pioneering science to then heat the tobacco to 350°C. This results in real tobacco taste and satisfaction with no smoke, no ash and less smell.

Where is IQOS manufactured?

We manufacture IQOS and HEETS in three main facilities fully dedicated to smoke-free products – Aspropyrgos in Greece, Bologna in Italy and Neuchatel in Switzerland.

Do you see a point where Philip Morris switch over to only supplying NGP products?

Yes. Our CEO announced 5 years ago that our end goal is to stop selling cigarettes. We know that this is a huge challenge and not going to happen overnight but we are committed to providing smokers who don’t quit with less harmful alternatives.

Where do you see the NGP category going from here?

Our ambition as a company is to stop selling cigarettes. In the UK for example, we are doing all we can to ensure that the 1.3 million smokers who currently use menthol cigarettes are informed about the upcoming menthol cigarette ban, can prepare for it, and are aware of the menthol e-cigarettes and heated tobacco options available to them if they aren’t able to quit nicotine for good. This ban is an opportunity to get 1.3 million people off cigarettes for good.