Tobacco Firms Cite Strong Demand for Next Generation Products

Since launching glo in Japan, BAT says demand for the tobacco heating product has overwhelmed supply in its Japan-based test market.

March 20, 2017

UNITED KINGDOM – British American Tobacco (BAT) is investing heavily—more than $1 billion over the last five years—in next generation products, a term the company uses to describe new types of alternatives to smoking, including vapor products (e-cigarettes) and tobacco heating products.

“I see our role in tobacco harm reduction very clearly. It’s to help reduce the public health burden of smoking and, to do so, ensure that we have the resources, skills and ambition to develop and market a compelling range of products which will deliver to consumers’ needs,” says Kingsley Wheaton, managing director of next generation products for BAT, in the company’s 2016 Sustainability Report.

Part of that investment is BAT’s tobacco heating product, glo, launched in Japan in December 2016.

Glo provides a similar experience to that of a cigarette, but by heating, rather than burning, tobacco. BAT says glo delivers a cleaner experience for the consumer with around 90% less toxicants than a standard cigarette. Glo works by heating “Neostiks,” under the Kent brand, that contain tobacco and are available in different flavors like bright tobacco and fresh mint.

“Japan is a great market for testing this type of new product as consumers are so open to new technologies, and the country is seen as a unique market and well-suited for this type of product,” explained Brett Mather, head of next generation products at BAT Japan, in the company’s Sustainability Report 2016. “The Kent brand is also one that Japanese consumers already know and trust.”

Brett calls glo “a real game changer for consumers—a genuine advancement in tobacco heating products for the Japanese market,” adding that BAT spent over a year preparing to launch glo by engaging with the government and public officials, gaining consumer insights through research and focus groups, and “educating retailers so they understand and can explain the product to their customers.”

BAT’s first flagship store in Sendai, Japan, offers consumers the opportunity to experience the new glo brand. Now in its fourth month of being on the market, BAT told Reuters that demand for glo overwhelmed supply. The news source also notes that these types of “heat but not burn” tobacco products are rapidly gaining popularity in Japan; Philip Morris says it has more than doubled the supply of its IQOS tobacco device, which was still not enough to meet the demand. 

Reuters writes that Japan Tobacco Inc. suggested its domestic cigarettes sales volume could decline by 9.6% this year, partly because of the growing popularity of e-cigarettes. The company will begin selling its Ploom Tech e-cigarettes in some parts of Tokyo. BAT indicated that it plans to sell glo throughout Japan later this year.