New Tobacco Products Become A New Growth Point for Multinational Tobacco Companies

With the decline in sales of traditional combustible tobacco products, new tobacco products(heated tobacco) have gradually become a new growth point for some multinational tobacco companies to achieve business performance growth.


Since the beginning of this year, Philip Morris International’s operating performance has performed well, exceeding their expectations. Jacek Olzak, CEO of Philip Morris International, said that this was due to the good momentum of their heated cigarette IQOS. In the first half of 2022, the net income of new tobacco products (HNB heatsticks) accounted for 30.5% of Philip Morris International’s net income, and the number of IQOS users and sales of heated cigarettes have gradually increased. According to Philip Morris International estimates, there are currently about 19 million IQOS users worldwide, an increase of 20.5% from the end of 2021.


Olzak said in Philip Morris International’s half-year financial report: “We have raised our full-year operating performance expectations. After adjustment, the company’s net income is expected to achieve 6% to 8% growth this year. Heated cigarettes will become important support for growth.”


British American Tobacco’s long-term investments in building a portfolio of novel tobacco products have resulted in revenue growth for them. In the first half of 2022, British American Tobacco’s operating income increased by 3.7% year-on-year, mainly due to the increase in revenue from new tobacco products(nicotine heated tabak supplier). In the first half of 2022, British American Tobacco’s e-cigarette Vuse sales revenue increased by 48% year-on-year, heated cigarette glo sales revenue increased by 44% year-on-year, and nicotine pouch product Velo sales revenue increased by 37% year-on-year. Novel tobacco product revenue now accounts for approximately 14.6% of BAT’s operating revenue.


British American Tobacco chief executive Jack Powers said: “The growth of new tobacco products is driving a faster transformation of British American Tobacco.” From December 2021 to June 2022, the number of consumers of British American Tobacco heated cigarettes increased by 2.1 million people, the total number reached 20.4 million.


Altria’s net income for the first half of 2022 was $12.4 billion, down 4.1% year over year. Altria said its tobacco business performed well in the first half of the year despite a tough economic environment. Altria CEO Billy Gifford said in a news release: “Tobacco products have generated solid revenue for the company. Through our investments at the beginning of the year, we have continued to make progress in new tobacco products, including Supporting the growth of the on! brand of nicotine pouches. We are encouraged by the strong sales momentum of the on! brand since the lifting of capacity restrictions last summer and a significant increase in market share.”