Next Generation Products: Philip Morris International

This page was last edited on at

Like its competitors, Philip Morris International (PMI) has been investing in tobacco and nicotine products that, unlike cigarettes, have potential for growth in developed markets. 1 These products are known as Next Generation Products (NGPs), and can include snus, e-cigarettes, and heated tobacco products (HTPs).

NGPs are often publicly linked to tobacco companies’ harm reduction strategies. PMI, for example, has marketed its flagship NGP IQOS (see below) since 2016 under its catchphrase “this changes everything” (trademarked in 2017). 2 3 In conjunction, PMI began making claims of corporate transformation and commitment to social change focussed on a smoke-free future: 4

“Society expects us to act responsibly. And we are doing just that by designing a smoke-free future.” 5

By October 2019, PMI had replaced the word “designing” with “delivering” (a smoke-free future), signposting the central role of the company in the realisation of this future. 6 7 Despite the promising language, PMI’s 2018 annual report revealed that the majority of the company’s earnings still came from conventional cigarettes. 8 At its 2019 Annual General Meeting, PMI CEO André Calantzopoulos further confirmed to shareholders that “Our combustible tobacco portfolio remains the foundation of our business”. 9 Marlboro cigarettes remain key to PMI’s business model. 10

In May 2017, Vaping Post quoted Calantzopoulos (from an interview with Nikkei Asian Review), saying that in five years’ time (i.e. by 2022) “PMI could start talking to governments about phasing out combustible cigarettes entirely”. 11 However, in 2020 PMI’s business is still predominantly focused on the sale of conventional tobacco products. There is evidence of new cigarette brands being launched in low and middle income countries, and traditional tobacco products continue to be vigorously promoted. 12 13 14


From 2002, a time of increased tobacco regulation and declining cigarettes sales in Europe, the international tobacco companies started investing in a Swedish smokeless tobacco called snus. 15 The product is sold as a paste or in a tiny pouch, and placed between the gum and lip for a period of time.

PMI was the last of the big international tobacco companies to invest in snus, albeit with little apparent enthusiasm. In October 2006, PMI acquired snus manufacturer Rocker Productions, and briefly sold 1847 by Phillip Morris on the Swedish market. 16 Three years later, it sold Rocker Productions to Swedish Match as part of a deal that saw PMI and Swedish Match set up joint venture SMPM International to “globalise snus”. 17 The joint venture never achieved commercial success, and in 2015 the two companies “mutually agreed” to dissolve the company. 18

PMI has not had snus in its portfolio since, despite a revival of interest in snus-type products in 2018. However, at the Q&A session of the December 2019 Morgan Stanley Global Consumer & Retail Conference Webcast, Calantzopoulos conceded that this is “an emerging category….which we are looking at as well”. 19

Image 1: PMI’s IQOS Duo which was launched in September 2019 (screenshot taken from, February 2020)

Heated Tobacco Products

The year before the snus joint venture came to an end, PMI entered the HTP and e-cigarette (see below) markets. At the time, CEO Calantzopoulos told the Wall Street Journal that he believed the future was in HTPs “because they give uses [sic] a stronger and faster kick of nicotine, more akin to a regular cigarette”. 20

PMI’s flagship HTP product, called IQOS, was first trialled in Milan (Italy), and then Nagoya (Japan) in 2014. 21

IQOS uses a battery-operated device that heats tobacco sticks called HEETS, which are available in several flavours and sold under cigarette brand Marlboro. IQOS heats the tobacco up to 350°C, compared to 600 °C for heating cigarettes, and therefore, according to PMI there is no “combustion, fire, ash, or smoke” and “the levels of harmful chemicals are significantly reduced compared to cigarette smoke”. 22 A subsequent peer reviewed study, using PMI’s clinical data, concluded that IQOS was “not detectably different” from cigarettes, in terms of potentially harmful effects. 23

PMI releases frequently updated estimates of the number of smokers who it says have stopped smoking and switched to IQOS.824 However, it is not clear how it arrives at these estimates, as PMI does not release all of its data, and so they can not be independently verified. PMI conducted some user studies (which it submitted to the FDA), 25 but these were run over periods of only 4-6 weeks which limits the ability to generalise the findings as a reflection of sustained behavioural change.

PMI also estimates the number of users in the process of “conversion” to using IQOS.824. However, PMI defines an IQOS user as an adult who has only used IQOS for a minimum of 5% of their daily tobacco consumption in the previous seven days. It is likely that the actual number of people who use IQOS exclusively, or for most of the time, is lower than PMI’s estimates. In addition, its statements on smoking cessation are based on the assumption that current dual users of tobacco and IQOS (of which there are significant numbers, even according to PMI’s own research)25 will all give up smoking cigarettes, and not restart later, and that very few non-tobacco users will take up IQOS.26 In 2020, PMI claimed that over 10 million smokers had switched to IQOS, with another 4 million “in conversion”.2427 It states that its “aspiration” is for the number of smokers switching to IQOS to exceed 40 million by 2025.28

For more details on PMI’s user estimates, the evidence on dual use, and PMI’s attempts to promote IQOS as a cessation tool, see PMI’s IQOS: Use, “Quitting” and “Switching”

Image 2: IQOS launches by year (Source: STOP report February 2020)26

By 2016, IQOS accounted for 99% of the global HTP market, according to Euromonitor data. 29 Although competition increased over the next two years, in 2018 IQOS still had by far the largest share (nearly 80%). 262930 By the end of 2019 IQOS was available in at least 47 markets, including lower and middle-income countries (see Image 2), including the United States (US). 26 This followed approval from the US Food and Drug Administration (FDA) to launch the product on the US market (albeit without the desired “Modified Risk” status). 31 32 33 In December 2019, the most recently launched brand extension was the IQOS Duo (see image 1).

PMI has mainly sold IQOS in high income countries. However, it is also marketing its products in middle income countries (see Figure 1). Although not officially launched, there is evidence that IQOS was available in 2018 in Vietnam, Indonesia and the Philippines, described by PMI as “key markets”. 263435 PMI indicated that it intended to formally launch IQOS in the Philippines in the second quarter of 2020, subject to meeting “some regulatory and legal requirements”.35 On 6 February 2020, PMI reported that IQOS was available in 52 markets.24 On 17 February, PMI launched the product in Lebanon. 36 IQOS had been sold previously in airport duty free stores in both Lebanon and Saudi Arabia.37 However, IQOS is not yet on sale in Indonesia, PMI’s largest market for cigarettes.37

PMI has a second HTP product under development, called TEEPS, which uses a carbon heat source to heat the tobacco sticks. 38 The company has alleged that this product is closer to the look and feel of a conventional cigarette than IQOS. 39

Promoting IQOS and “Smoke-Free”

Although it does not disclose its marketing spend, PMI has allocated a large amount to advertising and promoting IQOS.826 As well as retail websites and distribution deals, it has established dedicated ‘concept’ stores around the world to promote its products direct to its customers, with multiple stores in some cities (see below). It has developed sophisticated, multi-platform advertising campaigns, using traditional and social media.(For examples see images from Stanford University’s research into the impact of tobacco advertising and work by the Campaign for Tobacco Free Kids). It has also promoted its products at music festivals and cultural events in glamourous locations around the world.263740 PMI has been accused of marketing IQOS and other NGPs to youth, including through the use of paid social media influencers. 2637404142

PMI’s promotion of IQOS is inextricably linked to its “Smoke-Free” public relations strategy, and campaigns such as “Hold My Light” and “UnSmoke Your World”. Research published in February 2020 by Stanford University shows how PMI’s promotional activities not only replicate advertising strategies used in the past to promote cigarettes, but also help to “normalize” the company and its heated tobacco products in the eyes of the consumer. 264043 This normalization increases pressure on policy makers to regulate these products in ways that benefit the industry, particularly in lower income countries.


Image 3: The IQOS Mesh (screenshot taken from, December 2019)

As with snus, PMI was the last of the international tobacco companies to move into the e-cigarette market. In November 2013, PMI announced that it was going to produce its own e-cigarette. 44 By 2019 the company had three e-cigarette brands in its product portfolio, two of which were sold only in the United Kingdom (UK) and Ireland, and the other only in Spain and Israel.

The most recent addition was developed in-house: IQOS Mesh (see image 3), the only PMI e-cigarette labelled under the IQOS brand. CEO Calantzopoulos informed investors in December 2019 that Mesh was ready for further commercialisation, but that a global roll-out had been postponed due to the backlash against e-cigarettes following the sudden deaths of a number of vapers in the US.19 However, in January 2020, the global roll-out of Mesh appeared to be going ahead, with Calantzopoulo announcing “a launch in the coming months”.45

Read more detailed information on PMI’s e-cigarettes business here: 

Market Expansion and Consolidation

At the beginning of 2020 PMI stated that its “Reduced Risk Products” (RRPs) account for nearly 20% of its net revenue, although it does not disclose publicly the profits from IQOS or other NGPs.24 It continues to expand the sales of its products through independent retailers and IQOS stores. In January 2020, the company reported that it had opened 26 new IQOS stores in South Africa since launching there in 2017. 46

In January 2020, PMI announced a new “collaboration” with South Korean tobacco company KT&G, to commercialize KT&G’s range of “smoke-free” products globally, alongside IQOS.45 The deal covered KT&G’s e-cigarettes, heated tobacco and hybrid (vapour and tobacco) products. Although KT&G has a US subsidiary, PMI stated at the time of the announcement, in January 2020, that there were “no current plans to commercialize KT&G products in the U.S.”4547

Undermining Tobacco Control Legislation

Although PMI has been promoting a “smoke-free” narrative, including funding the Foundation for a Smoke-Free World and its “Unsmoke” marketing campaign, it has also been working to undermine smoking bans and enable the use of IQOS in smoke-free areas.37

Just two months after the public smoking ban was introduced in the Czechia (then the Czech Republic) in 2017, PMI promoted IQOS on Radio Praha to Czech smokers, which according to the radio station “might allow them [smokers] to ‘smoke’ in public places once again”. 48

PMI has also been courting the hospitality industry to relax smoking bans by allowing the use of IQOS where smoking is banned.37 Allegedly more than 1,000 hotels around the world were offering “IQOS friendly rooms” in 2018, and “…in some cases, allow the use of smoke-free products in common areas”. 49 The UK IQOS website published a list of the “15 Best IQOS Friendly Locations in London”, venues that are “happy to accommodate users of heated tobacco technology”. 50

In January 2020, Calantzopoulos argued that advertising regulations should be relaxed, saying that in the UK it was “difficult to talk to a consumer about a tobacco product” if the product could not be easily seen, which would make it “very difficult to switch”. 51 However, although PMI has opened multiple IQOS stores in London, Bristol, Cardiff and Manchester, as an investigation by the Bureau of Investigative Journalist pointed out, as of February 2020 there were none in the UK towns and cities with the highest smoking rates.37

In February 2020, an investigation by The Guardian newspaper revealed that, in the UK, PMI lobbied for lighter regulation of IQOS, as a “considerably less harmful novel smokeless tobacco product” (CLHTP). PMI also proposed setting up a UK£1 billion fund for cessation services in exchange for the relaxation of advertising regulations for e-cigarettes and HTPs. 52

PMI has also taken advantage of tobacco control measures being implemented in the UK in order to promote its HTPs. In January 2019, PMI announced that it would be selling IQOS and menthol HEETS sticks in the UK, ahead of the deferred EU Tobacco Products Directive ban on menthol cigarettes (due to come into effect in May 2020).53545556 An “IQOS Menthol starter kit” aimed at convenience stores was available to retailers via a website called “”.5357 Run by Philip Morris Ltd (PML), the website stated that “From 20th May 2020, the only menthol tobacco you can sell is HEETS” (noting that specialist cigars and cigarillos were exempted from the ban). It also contained a claim that “51% of menthol smokers would replace menthol cigarettes with IQOS after the ban”.57

PMI has lobbied to overturn HTP and e-cigarette bans in Australia; and to get IQOS adopted as a cessation product in New Zealand and the UK. 2658

TobaccoTactics Resources

Relevant links

TCRG Research


  1. Euromonitor International, Global Tobacco Key Findings Part 2: Vapour Products. August 2016 (behind paywall)
  2. Philip Morris International, This Changes Everything: Annual Report 2016, 2017, accessed January 2020
  3. Justia Trademarks, IQOS this changes everything- Trademark details, undated, accessed December 2019
  4. R. Davies, A. Monaghan, Philip Morris’s vision of cigarette-free future met with scepticism, The Guardian, 30 November 2016, accessed September 2017
  5. Philip Morris Products S.A., Delivering a smoke-free future. How long will PMI be in the cigarette business?, PMI website, undated, accessed December 2019
  6. Philip Morris International, Designing a Smoke-Free future, PMI website, archived 30 September 2019, accessed December 2019
  7. Philip Morris International, Delivering a smoke-free future, PMI website, archived 16 October 2019, accessed December 2019
  8. abcdPhilip Morris International, 2018 Annual Report, accessed December 2019
  9. L.C. Camilleri, A. Calantzopoulos, Annual Meeting of Shareholders New York 1 May 2019, Philip Morris International, Presentation Script, accessed December 2019
  10. Philip Morris International, Philip Morris International Inc. Reports 2019 Fourth-Quarter & Full-Year Results, PMI press release, 6 February 2020, accessed February 2020
  11. D. Caruana, PMI CEO talks about phasing out cigarettes in Japan & S. Korea, Vaping Post, 18 July 2017, accessed February 2020
  12. Stopping Tobacco Organizations and Profits, Philip Morris International Licensing Marlboro Production in Uzbekistan is More Evidence Its “Unsmoke” Rhetoric Is A Lie, STOP press release, Expose Tobacco website, 5 December 2019, accessed February 2020
  13. Campaign for Tobacco Free Kids, Philip Morris Declares the “Year of Unsmoke,” But Launches New Cigarette in Indonesia and Sells Over 700 Billion Cigarettes a Year Worldwide, PR newswire, 18 April 2019, accessed February 2020
  14. T. Kary, Philip Morris Says It Doesn’t Want You to Buy Its Cigarettes, Bloomberg, 17 April 2019, accessed February 2020
  15. S. Peeters, A. Gilmore, Transnational tobacco company interests in smokeless tobacco in Europe: Analysis of internal industry documents and contemporary industry materials, PLoS Medicine, 2013,10(9):1001506
  16. Tobacco Reporter, PMI buys into Swedish Snus, Tobacco Reporter Magazine, December 2006 (paywall)
  17. Swedish Match, Interim Report: January-March 2010, Swedish Match website, accessed December 2019
  18. Swedish Match, Swedish Match and Philip Morris International to dissolve smokeless joint venture, 16 July 2015, accessed December 2019
  19. abA. Calantzopoulos, M. King, Morgan Stanley Global Consumer & Retail Conference Webcast, Philip Morris International, 3 December 2019, accessed December 2019
  20. T. Gara, What Do Smokers Really Want: E-Cigarettes, or Safer Tobacco?, The Wall Street Journal, Corporate Intelligence blog, 10 January 2014, accessed February 2020 (paywall)
  21. Philip Morris Japan Limited, Country: Japan, PMI website, undated, accessed December 2019
  22. Philip Morris S.A., IQOS explained, PMI website, undated, accessed December 2019
  23. Glantz, S.A., PMI’s own in vivo clinical data on biomarkers of potential harm in Americans show that IQOS is not detectably different from conventional cigarettes, Tobacco Control, 2018; 27;9-12
  24. abcdePhilip Morris International, 2019 Fourth-Quarter and Full-Year Results, PMI website, 6 February 2020, accessed February 2020
  25. abFood and Drug Administration, Scientific Review of Modified Risk Tobacco Product Application (MRTPA), 30 June 2020
  26. abcdefghijStopping Tobacco Organizations and Products, Addiction At Any Cost: The Truth About Philip Morris International, STOP report, 20 February 2020, accessed February 2020
  27. Philip Morris International, Science, Data, and Facts Should Unite Decision-Making, Says PMI CEO in Speech at Concordia Summit, Business Wire, 24 September 2020, accessed September 2020
  28. Philip Morris International, A sustainable future: Business transformation metrics, PMI website, undated, accessed February 2020
  29. abEuromonitor International, Global Tobacco 2018 (paywall)
  30. Philip Morris International, Where is IQOS available?, PMI website, undated, accessed February 2018
  31. U.S. Food and Drug Administration, FDA permits sale of IQOS Tobacco Heating System through premarket tobacco product application pathway, US FDA website, 30 April 2019, accessed November 2019
  32. PMI Submits Pre-Market Application for Heat-Not-Burn, Convenience Store News, 31 March 2017, accessed December 2019
  33. U.S. Food and Drug Administration, Philip Morris Products S.A. Modified Risk Tobacco Product (MRTP) Applications, US FDA website, 23 October 2019, accessed December 2019
  34. D. Loh, Merger collapse spurs Philip Morris to expand Asia presence, Nikkei Asian Review, 27 September 2019, accessed February 2020 (paywall)
  35. abR.T dela Cruz, wants customers to ‘unsmoke’,, 1 February 2020, accessed February 2020
  36. The dawn of a ‘Smoke-Free Lebanon’, The Daily Star (Sponsored content), 17 February 2010, accessed February 2020
  37. abcdefgM. Davies, B. Stockton, M. Chapman, T. Cave, The ‘UnSmoke’ Screen: The Truth Behind PMI’s Cigarette-Free Future, The Bureau of Investigative Journalism, 24 February 2020, accessed February 2020
  38. Philip Morris S.A., Carbon heated tobacco product TEEPS, PMI website, undated, accessed December 2019
  39. Philip Morris International, Glossary: TEEPS, PMI website, undated, accessed September 2017
  40. abcC. Kirkham, Inside the Philip Morris campaign to ‘normalize’ a tobacco device, Reuters, 21 February 2020, accessed February 2020
  41. S. Peeters, K. Evans, Russia: snus targeted at young & wealthy, Tobacco Control, 2012; 21:456-459
  42. C. Kirkham, Exclusive: Philip Morris suspends social media campaign after Reuters exposes young ‘influencers’, Reuters, 11 May 2019, accessed February 2020
  43. R. Jackler, Global Marketing of IQOS The Philip Morris Campaign to Popularize “Heat Not Burn” Tobacco, report by Stanford University School of Medicine, 21 February 2020
  44. S. Cavale, D.K. Kumar , Marlboro make Philip Morris to end e-cigarette business, Reuters, 20 November 2013, accessed May 2019
  45. abcPhilip Morris International Inc. Announces Agreement with KT&G to Accelerate the Achievement of a Smoke-Free Future, Business Wire, 28 January 2020, accessed January 2020
  46. Cigarette and tobacco giant backs South Africa with R650 million investment drive and retail store expansion,, 20 January 2020, accessed January 2020
  47. KT&G, KT&G USA, company website, undated, accessed January 2020
  48. D. Lazarova, Czech smokers taking stock of heat-not-burn tobacco products as smoking ban starts to bite’, Radio Praha, 31 July 2017, accessed September 2017
  49. D.Szpytma, PMI Calls On The Travel Industry To Join the Journey Toward a Smoke-Free World,, 7 November 2018, accessed December 2019
  50. Philip Morris Products S.A., Blog: 15 Best IQOS Friendly Locations in London,, 25 June 2018, accessed December 2019
  51. R. Lynch, Philip Morris boss calls for UK tobacco advertising rules to be relaxed, The Telegraph, 21 January 2020, accessed January 2020 (paywall)
  52. S. Bosely, Philip Morris drew up plan for £1bn tobacco transition fund, The Guardian, 24 February 2020, accessed February 2020
  53. abPMI to launch Iqos heated tobacco device in convenience channel,, 2 January 2020, accessed January 2020
  54. Association of Convenience Stores, Menthol Cigarettes Ban, ACS website, 2019, accessed January 2020
  55. Action on Smoking and Health, Tobacco Policy and the European Union, ASH fact sheet, August 2016
  56. European Commission, Directive 2014/40/EU Of The European Parliament And Of The Council, 3 April 2014, accessed January 2020
  57. abPhilip Morris Ltd, IQOS,, undated, accessed January 2020
  58. T. Elliott, Big Tobacco’s shadowy new play, The Sydney Morning Herald, 18 May 2019, accessed February 2020