Eloïse Trenda
Research Expert covering global food topics with a focus on the French and Spanish markets.
The tobacco industry is evolving. This historically traditional market has thrived on cigarette, cigar, and loose-leaf tobacco sales for centuries, but cigarette consumption is dropping and anti-smoking regulations are becoming stricter everywhere. As a result, the industry is looking for ways to innovate and keep up with current taste trends. This innovation drive has led to the introduction and success of electronic cigarettes, but now there is an even newer smoking alternative: heated tobacco products (HTP). Also known as heat-not-burn, heated tobacco products heat specially-designed tobacco sticks in order to provide a smokeless ‘smoking’ experience.
Several major tobacco companies offer HTP products through sub-brands. For instance, Philip Morris International (PMI), known for its cigarette brand Marlboro, sells HTPs under the name IQOS. IQOS works with PMI’s branded sticks called TEEPS. PMI has seen sales of IQOS and TEEPS grow strongly in recent years, with revenues amounting to over 10 billion U.S. dollars in 2022. The company shipped over 100 billion units of HTPs in 2022. One of PMI’s main competitors, British American Tobacco (BAT), known for its cigarette brand Lucky Strike, has also been enjoying revenue increases for its reduced-risk products segment, which includes HTP brand glo. Japan Tobacco International also has an HTP brand by the name of Ploom.
Brands like IQOS, glo, and Ploom compete in many global markets. In Japan, a 2022 survey revealed that glo hyper+ was the leading heated tobacco product. Two of IQOS’s products completed the top three, indicating that the market is highly competitive. Heated tobacco products also show signs of being able to compete with e-cigarettes. For instance, in the United Kingdom, IQOS had an estimated 163,000 users in 2021, putting the brand ahead of several e-cigarette brands. Nonetheless, the HTP market is still far behind the regular cigarette market. A 2021 panel survey conducted in South Korea revealed that smokers were still 16 times more likely to smoke normal cigarettes than heated tobacco products.
New brands by leading players
Several major tobacco companies offer HTP products through sub-brands. For instance, Philip Morris International (PMI), known for its cigarette brand Marlboro, sells HTPs under the name IQOS. IQOS works with PMI’s branded sticks called TEEPS. PMI has seen sales of IQOS and TEEPS grow strongly in recent years, with revenues amounting to over 10 billion U.S. dollars in 2022. The company shipped over 100 billion units of HTPs in 2022. One of PMI’s main competitors, British American Tobacco (BAT), known for its cigarette brand Lucky Strike, has also been enjoying revenue increases for its reduced-risk products segment, which includes HTP brand glo. Japan Tobacco International also has an HTP brand by the name of Ploom.
Consumer behavior
Brands like IQOS, glo, and Ploom compete in many global markets. In Japan, a 2022 survey revealed that glo hyper+ was the leading heated tobacco product. Two of IQOS’s products completed the top three, indicating that the market is highly competitive. Heated tobacco products also show signs of being able to compete with e-cigarettes. For instance, in the United Kingdom, IQOS had an estimated 163,000 users in 2021, putting the brand ahead of several e-cigarette brands. Nonetheless, the HTP market is still far behind the regular cigarette market. A 2021 panel survey conducted in South Korea revealed that smokers were still 16 times more likely to smoke normal cigarettes than heated tobacco products.
