Maximize the benefits of smoke-free products

At PMI, we are accelerating the end of smoking by making cigarettes obsolete. To that end, we are transforming our operations and value chain to develop, assess, and commercialize smoke-free alternatives that are scientifically substantiated to represent better alternatives than continued smoking.

 

 

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Our 2025 Roadmap goals

See our full 2025 roadmap

MAXIMIZE THE BENEFITS OF SMOKE-FREE PRODUCTS

Develop and commercialize science-based, smoke-free alternatives, making them available in 100 markets (of which at least half in low- and middle-income markets) and continuing to increase the total number of users.

Deploy robust youth access prevention programs in indirect retail channels and ensure the sales of our products abide by our Marketing Codes.

Key performance indicators to track our progress

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See full performance metrics

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Learn more about PMI’s Sustainability Index in our Integrated Report 2022. See the full performance metrics and related footnotes here.

The right thing to do

The best thing is to never start smoking. For those who do smoke, their best course of action is to quit tobacco and nicotine use altogether.

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The right thing to do

The best thing is to never start smoking. For those who do smoke, their best course of action is to quit tobacco and nicotine use altogether. However, many do not. Those adult smokers who would otherwise continue to smoke should have access to nicotine-containing alternatives that are scientifically substantiated to be less harmful than continuing to smoke.

Scientific and technological innovation have made such solutions available today. The vast majority of harmful compounds found in cigarette smoke and associated with smoking-related diseases are generated by combustion. Nicotine-containing products that do not involve combustion (smoke-free products), such as e-vapor, oral nicotine, and heated tobacco products, while not risk-free, could present a much better alternative than continued smoking.

For adults who would otherwise continue to smoke, scientifically substantiated smoke-free products indeed represent a significant opportunity, as switching to these products has the potential to reduce the risk of developing smoking-related diseases versus continued cigarette smoking.

Seizing this opportunity to achieve a public health benefit depends not only on the scientifically substantiated risk-reduction profile of these products, but also on adult smokers successfully switching to smoke-free products and stopping smoking cigarettes. It is therefore critical that smoke-free products are made available to all adult smokers, that adult smokers be informed of their existence and understand their benefits, that they find them acceptable, and that they can afford to buy them.

The business case

Through our early and sustained investment in R&D and consequent leadership in technology and innovation, we have built a powerful position and competitive advantage in scientifically substantiated smoke-free products, which can help accelerate the decline in cigarette smoking.

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The business case

Through our early and sustained investment in R&D and consequent leadership in technology and innovation, we have built a powerful position and competitive advantage in scientifically substantiated smoke-free products, which can help accelerate the decline in cigarette smoking.

By allocating the majority of our resources to the development and commercialization of smoke-free products we are accelerating our progress toward becoming a smoke-free company, and in doing so are building legitimacy and stakeholder trust. Moreover, it allows us to expand our market share in the nicotine space, increasing our current and future revenue base as we seek to encourage all adults who would otherwise continue to smoke to switch to smoke-free products—this includes the estimated 130 million adult smokers of our cigarette brands, as well as the hundreds of millions of adult smokers who buy competitor brands. Further, our smoke-free product consumables drive higher net revenues per unit than cigarettes, with accretive product contribution per unit already helping to generate attractive returns on our significant upfront and ongoing investments in developing the smoke-free category.

It is critical to us to avoid that the marketing and sales of our products discourage complete nicotine use and smoking cessation, encourage the initiation of nicotine use, or be of particular appeal to unintended audiences (including youth). Disregarding this would undermine our credibility, harm our reputation, and potentially trigger adverse regulation, hampering our ability to achieve a smoke-free future as fast as possible.

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Our progress in 2022

Read more in our Integrated Report
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Responsible R&D

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Related reports, policies and documents

ESG KPI protocol 2022

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Looking ahead

We are preparing for important regulatory submissions in the U.S.—including Pre-Market Tobacco Applications (PMTAs) for IQOS ILUMA in 2023.


We will continue to gather and evaluate real-world data on IQOS, and execute comprehensive clinical studies investigating whether switching to a smoke-free product reduces the harm and risk of smoking-related diseases upon switching to IQOS.

 

Badrul Chowdhury, Chief Life Sciences Officer, Smoke-Free Products

We have ambitious plans leveraging the progress made to date, including continuing to broaden access and improve our product portfolio.


In particular, we reached an agreement with Altria in October 2022, to take full control of IQOS in the U.S. as of April 30, 2024. During this transition period, we plan to invest in IQOS to bring it to market at scale across the U.S., leveraging the proven capabilities of our commercial engine. We are preparing for domestic manufacturing and developing U.S. sales, distribution, retail, consumer engagement, and support capabilities.


We will continue to broaden access to our heat-not-burn products through a multi-tier portfolio approach for both devices and consumables that covers a range of price points. This can already be seen in Japan, where our two-tier heated tobacco unit portfolio for ILUMA is driving overall share growth, with premium-priced TEREA and mainstream-priced SENTIA each gaining share in 2022.

 

While pursuing our efforts to act on all drivers of access, we will continue to design and deploy a suite of effective tools to ensure that our smoke-free products reach the intended audience: current adult smokers or users of other nicotine products who otherwise would not quit.


We will continue to monitor through premarket and post-market studies that our smoke-free products encourage adult smokers to switch away from cigarettes, while minimizing the risk of unintended consequences, such as youth uptake, initiation, or relapse back to tobacco or nicotine products. In particular, we will evolve our study approach to better account for our expanded portfolio of smoke-free products, including our e-vapor products.


Stefano Volpetti, President, Smoke-Free Inhaled Products and Chief Consumer Officer

Swedish Match joining PMI in late-2022 means significantly enhanced prospects to progress toward accelerating our common goal to make cigarettes obsolete. Following PMI’s acquisition of Swedish Match, we will contribute towards the expansion of, and increase in access to, smoke-free products as together we are now present in the large, attractive, and growing U.S. smoke-free market. We will also drive accelerated global expansion opportunities for Swedish Match’s oral nicotine products through PMI’s international commercial infrastructure.

 

Lars Dahlgren, President, Smoke-Free Oral Products and CEO Swedish Match

This online content about our Integrated Report should be read in conjunction with PMI’s Integrated Report 2022. Unless otherwise indicated, the data contained herein cover our operations worldwide for the full calendar year 2022 or reflect the status as of December 31, 2022. Where not specified, data comes from PMI financials, non-financials, or estimates. Unless explicitly stated, the data, information, and aspirations referenced do not incorporate PMI’s Vectura Fertin Pharma business (consolidating the 2021 acquisitions of wellness and healthcare companies Fertin Pharma A/S, Vectura Group plc., and OtiTopic, Inc.), nor the late 2022 acquisition of Swedish Match AB. Please also refer to 'This report at a glance' on page 2 of the Integrated Report 2022 for more information. Aspirational targets and goals do not constitute financial projections, and achievement of future results is subject to risks, uncertainties and inaccurate assumptions, as outlined in our forward-looking and cautionary statements on page 214. In the Integrated Report 2022 and in related communications, the terms “materiality,” “material,” and similar terms, when used in the context of economic, environmental, and social topics, are defined in the referenced sustainability standards and are not meant to correspond to the concept of materiality under the U.S. securities laws and/or disclosures required by the U.S. Securities and Exchange Commission.


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