PMI: Committed to the decline of cigarettes14 Sep 2022
We’re often asked if we’re serious about ending the sale of cigarettes.
The answer? Unequivocally yes, we are.
Accelerating the decline in cigarettes
Moira Gilchrist, VP Strategic and Scientific Communications for Philip Morris International, speaks to camera:
The facts are out there and they're clearly verified and verifiable.
We are purposefully phasing out cigarettes.
Many people have been somewhat surprised by our transformation and the pace of change,
and when they see data such as the decline in in combustible cigarettes
Cigarette shipment volumes have fallen from 915 billion units in 2011 to 622 billion units in 2022.
Full year results press releases, https://www.pmi.com/investor-relations/press-releases-and-events
It's perhaps difficult for them to fit that into their narrative of the tobacco company that they knew from let's say the 1980s or 1990s.
Our aim is to ultimately replace cigarettes with smoke-free alternatives.
Philip Morris International unilaterally stopping to sell cigarettes tomorrow simply won't change a thing because that doesn't eliminate the demand for cigarettes.
The demand will remain and somebody else will simply fill that demand, whether it be a competitor, or the illicit market and smokers will continue to light up cigarettes and inhale the smoke.
Our transformation makes much more sense because what we're working on is reducing the demand for cigarettes over the long-term and thereby making sure that this decline in cigarette smoking continues and even hopefully accelerates.
The shipment volume of our leading heated tobacco product has risen from 7 billion in 2016 to 109 billion in 2022.
Annual earnings press releases, https://www.pmi.com/investor-relations/press-releases-and-events
When I started with the company back in 2006 all of our revenue was coming from cigarettes.
Every single dollar.
Fast forward to 2015 which was really the first year where we had national launches of our products and you started to see a beginning of a decline in the number of cigarettes that we were selling and fast forward to now,
You see that we're actually shipping a quarter less combustible cigarettes than we were in 2015.
I think that's tremendous progress and it really has, you know, the advent of these smoke-free alternatives in my mind has really accelerated the decline in the the number of combustible cigarettes that we're selling as Philip Morris International.
Our ambition is that over 50 percent of our total net revenues will come from smoke-free products by 2025.
We're on track to deliver the against the objectives that we set the entire organization, uh, for for 2025.
Every quarter when I see the results being shared with the investor community, I feel really proud.
We make very clear how many cigarettes we have shipped and we also make clear how many smoke-free products we have shipped.
So all people need to do is look at the published data.
That data clearly shows that we're shipping far fewer combustible cigarettes now than we were at the beginning of this transformation Journey
The increasing number of adult smokers switching to our heated tobacco products has contributed to the fall in cigarette sales.
As of December 31, 2022, there were approximately 24.9million users of our leading heated tobacco product, of which 18.5million had switched to the product and stopped smoking.
Philip Morris International logo is seen on screen.
Find out more on PMI.com.
Philip Morris International (PMI) recognizes that a decline in the sales volume of our cigarettes—and more broadly, our combustible product portfolio—is an imperative component of our ambition to deliver a smoke-free future.
And we’re making rapid progress toward that goal.
Data from our publicly available disclosures reveal a consistent downward trajectory in the sales volume of our cigarettes over the past decade.
Cigarette shipment volume has fallen from 915 billion units in 2011 to 622 billion units in 2022, with an annual decline every year for the past 10 years.
Furthermore, we have set a goal for PMI’s total combustible product shipment volume to be less than 550 billion units in 2025.
PMI’s cigarette shipment volume has fallen from 915 billion units in 2011 to 622 billion units in 2022.
They clearly refute disinformation spread by some anti-tobacco organizations that our cigarette shipment volume is rising.
Investing in a world without cigarettes
Our aim is to ultimately replace cigarettes with smoke-free alternatives.
Since 2008, we have invested more than USD 10.5 billion behind these innovative products, in research, product development, production capacity, scientific substantiation, and studies on adult smoker understanding.
It’s an investment that’s paying off—with the increasing number of adult smokers switching to our heated tobacco products contributing to the decline we’re seeing in cigarette shipment volume.
As of December 31, 2023, approximately 18.5 million adult smokers had switched to our flagship smoke-free alternative and stopped smoking.1
The shipment volume of our heated tobacco units—the consumable element of our leading smoke-free product—has risen from 7 billion in 2016 to 109 billion in 2022.
These figures are the facts, transparently published every year by our company and available for everyone to access.
We’re always clear that while the best choice for any smoker is to quit tobacco and nicotine altogether, scientifically substantiated smoke-free products are a better choice for those adults who would otherwise continue smoking.
“Philip Morris International unilaterally stopping the sale of cigarettes tomorrow simply won’t change a thing,” says Moira Gilchrist, PMI’s Vice President of Strategic and Scientific Communications. “Because that doesn’t eliminate the demand for cigarettes. The demand will remain, and others will simply fill it, whether competitors or participants in the illicit market.
“Our transformation makes much more sense, because what we’re working on is reducing the demand for cigarettes over the long term, thereby making sure that the decline in cigarette smoking continues—and even hopefully accelerates further.”
“The numbers are impossible to ignore”
Through our commitment to delivering smoke-free innovations, we are making significant strides in bringing a world without cigarettes to fruition.
“The numbers are impossible to ignore,” says Stefano Volpetti, PMI’s President, Smoke-Free Inhaled Products & Chief Consumer Officer.2 “They paint a clear picture of the change we’re driving—firstly, in delivering a range of better alternatives to adult smokers and, secondly, in accelerating the end of cigarettes.
“Our science substantiates that PMI’s smoke-free products—while not risk-free—are a much better choice than cigarettes for adults who would otherwise continue to smoke.
“With support from the industry, stakeholders, and civil society, we believe that cigarette sales can end in many countries within 10 to 15 years. That would be a monumental achievement for the world’s one billion smokers, for global public health, and for our company.”
This article was updated on February 9, 2023 to reflect the 2022 year-end results.
1 As of December 31, 2022, PMI estimates that approximately 18.5 million adults across 73 markets had already switched to our leading heated tobacco product, and stopped smoking. User metrics reflect PMI estimates, which are based on consumer claims and sample-based statistical assessments with an average margin of error of +/-5% at a 95% Confidence Interval in key volume markets. The accuracy and reliability of user metrics may vary based on individual market maturity and availability of information.
2 Stefano Volpetti's role has been updated to reflect the fact that on Jan 1, 2023, he became President, Smoke-Free Inhaled Products & Chief Consumer Officer. At the time of publication, he was Chief Consumer Officer.