Making up lost ground
Stiff government regulations and education campaigns around the world to alert people to the dangers of smoking have helped push the number of cigarettes sold down despite how addictive they are. Global sales volumes have declined from a peak of about 5.8 trillion cigarettes in 2012 to 5.5 trillion sold to 1 billion smokers in 2015. The number of cigarettes sold is expected to decrease another 5% over the next five years, or a reduction of roughly 275 billion cigarettes.
Tobacco companies have more than made up for volume declines with price increases, and new technology has emerged to appeal to those kicking (or trying to kick) the cigarette habit. So-called reduced-risk tobacco products include vaping devices that heat a flavored, nicotine-infused liquid into a vapor that is inhaled and heat-not-burn (HNB) devices that heat real tobacco to deliver a vapor that tastes similar to a conventional cigarette.
The various e-cigarette products are still subject to regulatory scrutiny, but big tobacco companies have been diligent in their studies to try and prove that vaping is a lower risk habit than smoking and Philip Morris says its heat-not-burn IQOS device heats tobacco to much lower temperatures than a traditional cigarette and thus “the levels of harmful chemicals are significantly reduced compared to cigarette smoke.” It’s asked the FDA to deem the device, which will be marketed in the U.S. by Altria, a “modified risk tobacco product.”
The bet is that vaping and HNB devices will provide the much-needed growth to replace lost cigarette sales in the years ahead.
Read more at fool.com