Maximize the benefits of smoke-free products

The best choice a person can make 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 adults who would otherwise continue to smoke should have access to nicotine-containing products that represent a better alternative than continued smoking.

Scientific and technological innovation have made such alternatives 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 heat-not-burn products, while addictive and not risk-free, are likely to present a much better alternative than continued smoking.

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

Seizing this opportunity to achieve a public health benefit depends not only on the scientifically substantiated risk-reduction profile of these smoke-free products but also on adult smokers successfully switching to them and stopping cigarette use completely. It is therefore critical that all adult smokers are made aware of and have access to smoke-free products, understand their benefits versus continued smoking, find them acceptable, and can afford to buy them.

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 that can help accelerate the decline of cigarette smoking. By allocating the majority of our resources to the research, development, and commercialization of these better alternatives to continued cigarette smoking, we are accelerating our progress toward becoming a smoke-free company and, in doing so, are building legitimacy and stakeholder trust. Moreover, pioneering smoke-free alternatives to cigarettes allows us to grow our overall market share in the nicotine space, increasing our current and future revenue base as we seek to encourage all adult smokers (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) who would otherwise continue to smoke to switch to better alternatives. Further, our smoke-free product consumables drive higher net revenues per unit than cigarettes, with the accretive product contribution per unit already helping to generate returns on our significant investments in developing the smoke-free category.

It is critical for us that the marketing and sale of our products does not interfere with cessation efforts but does encourage switching to better alternatives among those adults who do not quit. Importantly, we also aim to ensure that we do not encourage initiation of nicotine use and that we avoid appealing to youth and other unintended audiences. Disregarding these principles could significantly undermine our credibility, harm our reputation, and even trigger regulation that could hinder our ability to engage freely with adult consumers or enter certain markets, thereby impeding us from achieving our purpose.