Markus Essing, a dating app, recently published its own data, according to which users who indicate “smokers” in their profile receive significantly fewer matches, swipes and so on. Is the fag, whether lit or just heated, a relationship killer?
MARKUS ESSING: I only feel able to speak to a limited extent about the details of newly initiated relationships and the preferences of potential partners. But what I do know is that the smoking rate continues to be fairly stable beyond the age of 30. With Iqos, we also offer an alternative to the classic cigarette that might also be helpful for dating. Unlike tobacco smoke, the vapor contains no sticky solids and does not get caught on fingers, clothing or hair. Of course, you still have to bring charm and humor with you…
How relevant are the tobacco heaters for Philipp Morris’ overall result?
Globally, the share of sales in the first quarter of 2023 was around 34.9 percent, and our market share is also growing significantly every year. In Germany, with currently around one million customers, it is around 5.3 percent of the entire cigarette segment. In the field of tobacco heaters, I think that should tend towards 90 percent. We have set ourselves the goal for 2025 of achieving 50 percent of net sales with low-emission products such as Iqos.
There has always been and continues to be criticism of terms such as “minimized risk” and “healthier alternative”, especially with regard to their scientific validity. What can you say seriously and verifiably about your tobacco heater?
First of all, we want to make it clear that these are not healthier alternatives, but less harmful alternatives. One of the facts is that a product like Iqos releases around 95 percent fewer pollutants than a comparable cigarette. This is not only the result of our own studies, but also of independent studies carried out by authorities such as the Federal Institute for Risk Assessment. It is also undisputed that the combustion of tobacco releases harmful substances and smoke. This is not the case with Iqos products, as with an e-car compared to a combustion engine. There is no question that it would be best to stop completely, because heaters are not risk-free. Which we don’t claim either.
Tobacco heaters are still quite new in the history of cigarettes. Is it already clear what happens in the long-term in the body of the user?
Our own clinical studies, lasting up to twelve months, show significant improvements in physiological parameters after switching to low-emission products compared to continuing to smoke. However, long-term studies are needed, which are not yet available. The totality of all collected data shows significant differences to the classic cigarette.
You started with Iqos as a kind of bridging technology that might help smokers to quit or at least continue vaping in a “healthier” way. Does this strategy correspond to the reality of the buyer or do some people even start consuming nicotine with the colorful heaters in the first place?
Our position was and is crystal clear: We want to convince adult smokers who don’t want to or can’t quit completely to switch to our system. And that also coincides with the target group we have reached in Germany: over 30 years old, conscious lifestyle, higher average income, above-average level of education, living somewhat more in a metropolitan area than the national average. As far as 12 to 17 year olds are concerned, the Federal Center for Health Education determined in July 2021 that when it comes to smoking, the shisha pipe is seven percent, followed by the classic cigarette and only at between 0.1 and 0.3 percent are tobacco heaters like ours. Very low numbers, which fortunately coincide with our marketing strategy and price positioning.
You describe the new system called “Iqos Iluma” as a new era. Sounds full-bodied …
“Simplicity is the ultimate sophistication”, with these words the Apple II was advertised in 1977. A milestone and a whole new experience. Not that Iqos has performed poorly so far. After all, we invested more than 10 billion euros in the development, for which almost 1,000 scientists used all their skills. But we’ve only listened very carefully to customers over the years since the product was launched, and they often complained that the cleaning annoyed them. So far, the tobacco tubes were put on a small heating rod.
Now it’s induction heating, isn’t it?
Exactly, the new Terea tobacco sticks are heated by induction. No more annoying fumbling out of small crumbs from the shaft. In addition, the battery has more power, is charged faster, an automatic start-stop system has been added and the built-in electronics are even more durable.
Wouldn’t it be more coherent for the new brand message if the thumbs were lowered when it came to nicotine? A heated stick contains just as much of it as the classic fluppe, doesn’t it?
Interestingly, only about 6 percent of all smokers make a commitment to quit each year. A comparatively small number. Accordingly, you can motivate the larger part to quit smoking with an alternative like Iqos. We deliberately chose a nicotine level that is comparable to a cigarette so that this switch can work. And as I said, since nicotine is not the main cause of smoking-related diseases, we have stuck to it so far. But that’s not risk-free, it has to be said.
There are critics who accuse corporations like Philipp Morris of offering “healthier” products primarily in saturated western markets, while smokers in emerging and developing countries, pardon me, should continue to smoke themselves to death. Your Answer?
Our vision is a smoke-free future in which – if at all – products like Iqos that are reduced in harmful substances are consumed. And everywhere. Of the 78 markets where we currently sell heaters, around 40 are non-OECD nations. We don’t stop there, but sometimes regulatory authorities simply lack an orderly process for the introduction of alternatives with fewer harmful substances, and laws do not provide for this type of product at all. Or the power grid is not reliable enough to allow customers to charge easily. We are also still working on the quantities and the associated pricing to make Iqos more affordable.
How critically does your own family environment view what you and your colleagues do? Do you ever question the good intentions of the tobacco multinational at the breakfast table?
Since 2017, when our then CEO surprisingly announced the exit from the traditional cigarette business, there have been a few skeptics who have asked many questions over the years. What convinced them is that we didn’t have and don’t have a plan B. In addition, with our rather radical approach, we could probably persuade more people to quit in the long term than government education campaigns can. At least that is my hope and what drives us all.
The Iqos world is designed quite colorfully, some competitors turn up even more and seem to be squinting at young consumers. Such a disco feeling brought the US brand Juul into considerable legal and financial distress a few years ago.
What you describe concerned and still concerns primarily e-cigarettes, around which a huge colorful hype is generated, which unfortunately also leads to countless discarded mouthpieces with batteries. I think that’s wrong and not good for our industry.
High time for a self-regulating solidarity?
There is no “one industry”. Some suppliers simply import any smoking products from China with relatively few legal requirements and quickly throw them on the market. Without looking too closely. Then there are the e-cigarettes, the liquid vaporizers with different flavors and then products like Iqos. We prefer to stick with targeting adult smokers and emphasize that focus wherever possible.
Communication is quite limited by advertising bans, including for alternative products. How much need for explanation is there in Germany?
Around 60 percent of people in Germany continue to believe that products such as e-cigarettes or tobacco heaters are just as or even more harmful than conventional cigarettes. We still have a lot to do there. Countries like England are already much further along.
They praised Iqos Iluma to the skies. Where is the room for improvement for future products? At Apple there is always a next presentation in Cupertino.
With Iluma we have already reached a new level, it is a certain “state of the art” at the moment. As part of the transformation, Philipp Morris has finally become a high-tech company since 2017. And of course we want to maintain our innovative leadership and continue to turn all the screws: technology, quality, design, taste and price. We also want to be present in more than 100 markets worldwide by 2025.
Can you still remember your last “real” cigarette?
This was a no-additive Marlboro that I was dying to try. In doing so, however, I noticed that I had been an Iqos user for too long and was therefore hardly accessible to a certain extent for classic cigarettes. I didn’t particularly like it.
2023-07-24 16:22:42
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