Imperial Tobacco – focusing on Next Generation Products

Imperial Tobacco’s core business has historically revolved around tobacco, with an extensive portfolio including iconic brands like L&B and Golden Virginia. While they still retain a deep investment in tobacco, Imperial is also focusing on Next Generation Products (NGP), which are building the e-vapour category, and in particular their vaping brand, blu.

Melvin Ruigrok, Imperial Tobacco UK & Ireland

Melvin Ruigrok is General Manager for Imperial Tobacco UK & Ireland. Supported by a wide team, Melvin oversees the UK and Ireland Cluster’s tobacco and e-vapour operations. From his perspective, it’s all about commitment to the consumers:

“We are determined to ensure we are providing the best experiences for our consumers, whether they’re existing adult smokers, existing vapers or those smokers looking to make the switch from traditional tobacco to e-vapour.”

Having held senior roles with Imperial Tobacco in other countries around the world, including Holland, Spain, Australia and Czech Republic, for Melvin the UK stands out as a leading market for vaping and tobacco products:

“The key differences between country markets include elements like legislation, consumer preferences and the breadth of product offerings. From a legislative point of view, we know that regulation like standardised packaging affects product perception, with many wholesalers and retailers experiencing the impact these changes have on their operations. Australia, for instance, currently restricts the sale of any evapour products containing nicotine, meaning only ‘no-nic’ vaping is an option there. Conversely, the UK is a leading e-vapour market with relatively high penetration, and in terms of product offerings it has evolved significantly over the past few years from electronic cig-a-likes to open systems and – most recently – ‘pod mod’ devices like our new myblu.”

Fontem Ventures, Imperial’s NGP business, was founded in 2013 to be Imperial Brands’ e-vapour arm, and under their guidance, says Melvin, the blu brand has made a strong start:

“As a market we work very closely with Fontem in order to create the best experiences for our consumers and ensure our products are available wherever demand – and legislation – allows. Both Imperial and Fontem are extremely ambitious when it comes to evapour, and firmly believe that our current blu portfolio represents a comprehensive alternative for consumers seeking to make the switch from traditional tobacco products.”

Fontem Ventures’ philosophy is all about transitioning smokers from cigarettes to something better. As Melvin explains, E-vapour is Fontem Ventures and Imperial’s risk-reduced product of choice, and they are actively encouraging adult smokers to transition from tobacco to an established alternative which, Melvin says, bodies like Public Health England, for instance, believe is 95% less harmful*:

“We are well aware that to achieve this transition, we need to continue to innovate. That’s why we’re extremely enthused about our new myblu intense liquidpods with nicotine salts, which deliver a more satisfying experience. We believe that nicsalts will further help to establish vaping as the preferred alternative to cigarettes for adult smokers.”

Imperial’s blu was launched in the UK in 2014 and quickly established itself as one of the UK’s best-known vaping brands. 2018 has been an exciting year for blu and NPD, says Melvin:

“Our ‘podmod’ device myblu launched in March, with our powerful open tank sub-ohm system blu ACE arriving just a month later. Bolstered by a wide range of e-liquids – including myblu intense – we’re confident that our enhanced blu portfolio will appeal to a wide audience of retailers and consumers alike.”

The current UK vaping scene is varied and dynamic, from large sub-ohm tanks that enhance the production of vapour to the current trends around nicsalts and innovative new e-liquid flavours. Pod mod systems like myblu are also a relatively new phenomenon, offering powerful, fast-charging vaping experiences in a compact form. Their hassle-free liquidpods allow consumers to switch between flavours in seconds.

Imperial and Fontem Ventures continue to develop the market further. Last year they acquired Nerudia, an independent company dedicated to innovation and R&D in the vaping category, and through their expertise have made what Melvin calls “significant strides” with their e-liquid offerings. And it doesn’t stop there:

“We have since made a number of further exciting acquisitions, and are committed to driving new innovation in the category both in 2019 and beyond to ensure blu remains at the cuttingedge of e-vapour.”

The current regulatory environment for vaping products in the UK compares favourably to many other markets. However, in Melvin’s view there remains room for improvement to maximise evapour’s important role in helping transition smokers to ‘something better’:

“For instance, significant restrictions remain around certain aspects of evapour advertising and there are still bans on the use of vaping devices in some public spaces. Imperial and Fontem are therefore continuing to advocate – via high-profile industry associations like UKVIA – to ensure the category has the strongest possible chance of establishing itself as a socially acceptable pastime with the power to assist adult smokers in switching to a potentially less harmful alternative.”

Imperial and Fontem are committed to category growth. On top of the momentum from their investment, given the nature of the retail distribution channels vape products are sold through, Melvin believes there are major opportunities for both retailers and the wholesalers who supply them to build vaping category sales:

“Vape retail in the UK is spread across a number of channels, including independent stores, multiple retailers, as in supermarkets, vape shops and online. The latter two currently account for around seventy five percent of total UK sales. This means there’s a real opportunity for more traditional channels to improve their e-vapour offering and compete for a larger share of the market. Imperial remains committed to providing categoryleading support to all our valued retail partners. Our Imperial sales reps continue to support our customers at every stage in the supply chain and are able to tailor specific plans to meet local needs.”

* https://www.gov.uk/government/news/ecigarettes- around-95-less-harmful-thantobacco- estimates-landmark-review