NEW YORK — Philip Morris International is making moves to meet its goal of becoming a majority smoke-free company in terms of net revenues by the end of 2025.
From completing its purchase of Swedish Match to changing the company’s structure and more, click through to see what the New York-based Marlboro maker has been up to.
PMI completed its offer for Swedish Match A.B. for about $15.8 billion, with an ownership of about 93% as of Nov. 25, according to a note from Goldman Sachs, New York.
“We view the acquisition as a key strategic positive for PM that will improve its position in reduced-risk products—arguably the biggest growth opportunity in tobacco/nicotine—and accelerate its transformation towards becoming a majority smoke-free company by 2025,” Goldman Sachs Managing Director Bonnie Herzog said.
In October, PMI increased its offer to buy the Richmond, Va.-based Swedish Match, which PMI said will help it transition into a smokeless portfolio. Shortly after, PMI agreed to buy Swedish Match with only 83% ownership, but extended its offer until Nov. 25.
Swedish Match owns Zyn, the No. 1 nicotine pouch brand in the United States, which shipped nearly 198 million cans worldwide in 2021, according to the company.
PMI announced a new regional structure and related senior management position changes to enable growth as a multicategory leader internationally and to advance its rapid transition toward a smoke-free future, the company said.
By the end of January 2023, PMI will consolidate its operations from six to four regions, under the leadership of these senior management members:
Other appointments include Marco Mariotti, who will become president of the Commonwealth of Independent States, Central Asia and Israel; Stacey Kennedy, who will be appointed to CEO of PMI’s U.S. business; and Scott Coutts, who will be appointed to senior vice president of operations.
The structure is designed to accelerate smoke-free product growth in markets where heat-not-burn tobacco product Iqos already holds double-digit market shares, while also driving the transition from cigarettes to smoke-free products in untapped markets, PMI said.
“We are changing the company’s regional structure to further support the growth of our smoke-free business, reinforce consumer centricity and increase the speed of innovation and deployment—all in alignment with our ambition of becoming a majority smoke-free business by net revenues by 2025,” said Jacek Olczak, CEO at PMI.
PMI has launched its latest version of heat-not-burn tobacco product Iqos in the Philippines. Bonds by Iqos is used with specially designed tobacco sticks called Blends, the company said. Bonds by Iqos heats tobacco instead of burning it and delivers authentic tobacco taste without ash and has less smell than cigarettes, PMI said.
It is intended for adults who would otherwise continue smoking or using other nicotine products, and who are looking for an alternative to cigarettes. Blends comes in five flavors, including classic, menthol and aromatic. When fully charged, Bonds by Iqos delivers up to 20 uses, including three consecutive experiences. The device comes in four colors.
“Bonds by Iqos provides an opportunity to address consumer acquisition barriers for this segment, most notably up-front device costs and authentic tobacco taste satisfaction—providing further options of innovative smoke-free options to help ensure they do not go back to cigarettes. Through continuous innovation, we want to ensure that all adult smokers who would otherwise continue smoking, switch and abandon cigarettes,” Olczak said.
Bonds by Iqos was launched in November for a pilot in the Philippines, and further commercialization is anticipated in 2022 and next year.
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