RICHMOND, Va. - The world€™s four largest tobacco firms outside of China see less smoke in the future €" and they€™re going to be ready with smoke-free tobacco products, the Financial Times reports. British American Tobacco (BAT), Imperial Tobacco, Japan Tobacco and Philip Morris International (PMI) are all working on electronic cigarettes, nicotine inhalers and tobacco vaporizers.
"It will be one of the big discussion points in the industry in coming few years," said Peter Nixon, vice president of communications at PMI. "We think [smokeless cigarettes] can be a significant revenue segment in the future as an alternative to cigarettes."
In 2011, smokeless tobacco, which includes snuff and chewing tobacco, only captured $14 billion of the $664 billion world tobacco market, according to Euromonitor. Cigarettes accounted for more than 90% of total sales.
PMI will debut a heated tobacco cigarette under its Marlboro brand in 2016, while BAT has a business division, Nicoventures, dedicated to developing smoking alternatives. One of BAT€™s first products will be a pure nicotine inhaler, which will be available within a couple of years.
"We don€™t see smokeless cigarettes as being a niche product," said David O€™Reilly, BAT€™s group scientific director. "This will be a major focus going forward - giving cigarette smokers a healthier alternative whilst not compromising on the taste and the sensory pleasure of smoking."
Imperial Tobacco purchased stock in an e-cig company last year. "There is demand from people who want to move from tobacco products €¦ and it will keep growing," said Alex Parsons, an Imperial spokesman. "A couple of years ago no one was speaking about e-cigarettes, now there€™s a proliferation of companies across the globe."
The push for smoking alternatives comes as more countries crack down on cigarette advertising and invoke plain packaging laws, such as Australia. Reynolds American also recently announced it would be focusing more of its development on smokeless tobacco products.
Read more about the future of tobacco retailing in the upcoming September "pre-NACS Show" issue of NACS Magazine.