With just five years remaining until Philip Morris International’s (PMI) 2030 target for a smoke-free future, the company is optimistic about achieving its ambitious goal. PMI aims to generate over two-thirds of its revenue from smoke-free products by 2030, marking a significant shift from its traditional tobacco business. Over the last three decades, PMI has invested a staggering $12.5 billion in scientific research and product development to accelerate its smoke-free vision, positioning itself at the forefront of the tobacco industry’s transformation. PMI’s flagship heat-not-burn product, IQOS, which launched a decade ago, has played a central role in this strategy, and today, the company’s smoke-free products are available in 92 markets globally.
At the 2024 Technovation Summit in Abu Dhabi, UAE, PMI’s Chief Executive Officer Jacek Olczak reflected on the company’s remarkable progress. He emphasized that PMI’s transformation is already ahead of schedule and the company is planning beyond 2030. “The last 10 years have been great. We have made significant progress, and in terms of where we are today, we are almost approaching 30% of our total revenue coming from smoke-free products. I am sure 10 years ago, when we said we would achieve it, most people would say, ‘Maybe, let’s see,’ but we did it,” Olczak stated confidently.
Currently, approximately 36.5 million adults worldwide use PMI’s smoke-free products, which include IQOS and other innovations in the tobacco alternatives sector. Olczak attributed much of this success to PMI’s focus on heat-not-burn technology, which has played a key role in reducing smoking rates globally. Data from the Japanese Ministry of Health, Labour, and Welfare highlights the effectiveness of these products, showing a 40% decline in smoking prevalence in Japan from 2014 to 2022, dropping from 19.6% to 10.6% among adults.
In the third quarter of 2024 (Q3’24), PMI’s smoke-free products accounted for 38% of its net revenue, up from nearly 0% in 2014. This sharp increase underscores the growing demand for alternatives to traditional smoking products and reflects PMI’s commitment to transforming the global tobacco market. However, PMI is not content to rest on its laurels. Stephano Volpetti, PMI’s President of Smoke-Free Inhalable Products and Chief Consumer Officer, stressed the need for further expansion to reach more adult smokers. “Our mission is to replace cigarettes and ensure all adult smokers can switch. If we want to achieve our goal and our mission to provide these alternatives to all adult smokers, we need to make faster progress in this region. This is something that we as PMI are committed to doing with our investment of $12.5 billion,” said Volpetti.
PMI’s pivot towards science and technology began in 2009 when it established a new research and development facility in Switzerland. This move laid the groundwork for the company’s heated tobacco product launch in 2014. By 2016, PMI made its bold commitment to a smoke-free future, and by 2022, it expanded its reach into the wellness and healthcare sectors, marking one of its most transformative steps. In the same year, PMI acquired Swedish Match, a major player in the oral smokeless market, further solidifying its position as a global smoke-free champion.
Despite these strides, PMI still faces significant challenges. Dr. Moira Gilchrist, PMI’s Chief Communications Officer, pointed out that misconceptions about nicotine remain a major obstacle in the company’s efforts to promote smoke-free alternatives. “What we have found is that people don’t really understand the issue of nicotine. I talk to individuals in the scientific community, public health, journalists—everyone—and their greatest concern is that these products still contain nicotine,” Dr. Gilchrist explained. Many people mistakenly believe that nicotine is the primary cause of smoking-related diseases, which can deter them from considering smoke-free alternatives.
Dr. Gilchrist clarified that while nicotine is addictive and not risk-free, it is not the primary cause of smoking-related diseases. The harmful and potentially harmful chemicals found in the smoke of burning tobacco are the main culprits behind the diseases associated with smoking, she explained. Nicotine is one of the reasons people smoke, along with factors like taste and ritual, but it is the combustion process that releases toxic substances into the body, causing the long-term health risks associated with smoking.
While acknowledging that nicotine is addictive and not without risks, Dr. Gilchrist emphasized that for many adult smokers, switching to smoke-free products can dramatically reduce health risks compared to continuing to smoke traditional cigarettes. However, certain populations should avoid nicotine altogether, including pregnant or breastfeeding women, people with heart disease or severe high blood pressure, and minors. These groups should not use or have access to nicotine-containing products.
As PMI approaches its 2030 target, the company is making substantial strides towards its smoke-free future. By continuing to innovate and educate the public, PMI aims to replace traditional cigarettes with safer alternatives, ultimately reducing the global health burden of smoking. With a growing number of adults adopting smoke-free products and the company’s commitment to research and expansion, PMI remains confident that it will achieve its ambitious goal of becoming a smoke-free business by 2030, transforming the tobacco industry in the process.