PMI’s IQOS outpaces Marlboro’s net revenue
Philip Morris International CEO Jacek Olczak
NEUCHATEL, SWITZERLAND – IQOS, Philip Morris International’s heated tobacco product, has outpaced Marlboro’s global net revenue and is now the company’s top brand, nearly a decade after its launch in 2014.
The milestone underscores the company’s shift toward replacing cigarettes with smoke-free alternatives such as IQOS.
“For the first time in history, smoke-free products have surpassed cigarette combustibles,” PMI Chief Executive Officer Jacek Olczak said at the Technovation event last Oct. 9 in Neuchatel, Switzerland.
PMI, through its local affiliate PMFTC Inc., introduced IQOS in the Philippines in 2020. The product line now includes the latest version, the IQOS Iluma, along with its consumable heat sticks TEREA. A more affordable heated tobacco product, BONDS by IQOS, and its consumable heat sticks BLENDS were launched in 2022. Meanwhile, ZYN, an oral nicotine pouch, became available in the country in 2023.
PMI made a bold commitment in 2014 to go smoke-free by replacing cigarettes with better alternatives and introducing IQOS in Milan, Italy, and Nagoya, Japan. IQOS is now available in 90 countries and used by 30.8 million people worldwide.
Article continues after this advertisementAccording to PMI’s latest integrated report, 38 percent of the company’s total net revenue comes from its smoke-free business.
Article continues after this advertisementIQOS uses patented induction technology to heat real tobacco instead of burning it. Since the tobacco isn’t burned, the products are smoke-free and produce a nicotine-containing aerosol that is fundamentally different from cigarette smoke. There is no smoke or ash.
Olczak said PMI never treated IQOS as an addition to its existing business but as a replacement for cigarettes. “It doesn’t make sense to keep focusing on a product with so many negatives when you have one that can deliver similar satisfaction from a consumer perspective, but with a completely different harm profile,” he said.
He said PMI has made a massive shift in resources, with 99 percent of the company’s research and development spending—amounting to several hundred million dollars per year—dedicated to new products.
IQOS Iluma Prime
PMI vice president for international communications and engagement Tommaso Di Giovanni said the company invested more than $12.5 billion and employs over 1,500 engineers, scientists, technicians, and support staff for the ongoing development of its smoke-free products.
Olczak said PMI, in its effort to provide better alternatives to the 1.1 billion smokers worldwide, acknowledges that people have different expectations for alternative products and different usage patterns. “There is no one smoker persona. So our role is to continuously innovate,” he said.
Di Giovanni said governments, NGOs, and everyone including physicians, health authorities, and academe have a role to play in the smoke-free transition. “What they say can influence adoption and decisions. The pace of change will depend on them,” he said.
During an exclusive interview with visiting Filipino journalists, Di Giovanni acknowledged the Philippines as a pioneer in terms of legislation with the passage of the Vape Law. “They (Philippines) actually set a pioneering framework which is unique in the region. The Philippines is the first in the region, a tribute to the visionary approach of the government,” he said.
Olczak said that PMI would not be able to achieve its smoke-free vision in countries that ban smoke-free alternatives.
“Technically speaking, we will not be able in these countries to achieve smoke-free just because we are not allowed. Actually, cigarette sales decline much faster in countries which allowed any form, maybe not even all, but allowed in any shape or form, at least one or two alternatives to the smoke-free product. Clearly, these countries will be on the forefront of reaping or yielding the public health benefit,” he said.
“If you want to have a drastic change from a harm reduction perspective, you should ban the cigarettes and allow the alternatives. But definitely not banning alternatives while allowing cigarettes,” Olczak said.
