Philip Morris Boosts Cigarette Alternative Investments

The tobacco firm will expand sales of these products to more countries as well as increase its development of new products.

September 30, 2016

LAUSANNE, Switzerland – The head of Philip Morris International has his eyes on alternatives to cigarettes as a good investment strategy for his company. CEO Andre Calantzopoulos said that the company will shell out an additional $100 million in 2016 to develop next-generation tobacco products, Bloomberg reports.

“We are more confident than ever that these products have the potential to fundamentally transform our business,” he said. One product in particular has received more funding: the iQOS heat-not-burn tobacco device. Philip Morris forecasts the product will hit shelves in 20 markets by the end of 2016.

IQOS consists of a rechargeable electronic device that heats tubes of tobacco. These “HeatSticks” look like half a cigarette. According to the company, iQOS has already gained more than a million smokers in Italian and Japanese test markets. “We are still in very, very early days,” Calantzopoulos said.

Overall, Philip Morris predicts that worldwide, cigarette smoking declines between 2% and 2.5% annually. Analysts are closely watching the tobacco industry as competitors race to come up with the next big thing in tobacco products. “It’s not clear which product or which category will ultimately win,” said Rupert Wilson, an industry analyst. “Someone will eventually bring a product out that’s a quantum leap.”

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