A growing market with huge potential
Alongside our traditional tobacco business, we are at the forefront of developing products that offer consumers potentially less risky alternatives to regular cigarettes.
We are passionate about our tobacco business and pride ourselves on offering consumers a choice of high-quality products that meet their needs.
But we are also devoting significant time, funds and resources to extending that choice to include alternative tobacco and nicotine products which provide consumers with potentially less risky alternatives to smoking regular cigarettes.
We call them Next Generation Products (NGPs) and they include Vapour Products like e-cigarettes and Tobacco Heating Products.
We have invested more than US$1 billion over five years in developing a world-leading portfolio of products in the NGP category – not just because they are an exciting new opportunity for us, but also because there are clear benefits for society in potentially helping reduce smoking-related disease.
We place great strategic importance on our work in this area and we want to lead these new product categories. The strength of our commitment can be demonstrated through the progress we have already made.
In 2013, we were the first international tobacco company to launch a Vapour Product (e-cigarette) – Vype – in the UK. Since then, we have used our experience and insights to develop the range with new devices, such as the Vype ePen, eTank and eBox. By the end of 2016, our Vype range was available across other markets including, France, Germany, Italy, Poland, Colombia, Guatemala, Kuwait, Bahrain and the Philippines.
In December 2016 we opened our first Vype-branded store – in Milan, Italy – at the same time as launching a new type of Vapour Product, Vype Pebble.
With our 2015 acquisition of the CHIC Group, a leading Vapour Product business in Poland, we gained access to Europe’s largest Vapour Product retailing network, as well as important new manufacturing and R&D capabilities.
Our commitment to the category was further demonstrated in April 2016 when we acquired Ten Motives, a UK based e-cigarette business.
In 2015, we launched our first Tobacco Heating Product, iFuse, in Romania. This electronic device heats a nicotine-containing liquid into an inhalable vapour, which then passes through a tobacco section, delivering tobacco flavour to the consumer.
In November 2016, we announced the launch of glo in Sendai, Japan. Similar to a cigarette, but with reduced risk potential, glo heats rather than burns tobacco, producing around 90% less toxicants* than a conventional cigarette. Following its launch in Sendai, glo is now available in Tokyo, Miyagi and Osaka in Japan. It has also been introduced in Canada (Vancouver) and in Switzerland, while in August 2017 BAT Korea announced the launch of glo, our second launch market in Asia after Japan.
In July 2017, British American Tobacco p.l.c. (BAT) acquired the remaining 57.8% of Reynolds American Inc. (RAI) that BAT did not already own, creating a stronger, global tobacco and NGP company. Our combined portfolio now includes VUSE, which was launched in 2013 and is now one of the leading brands in the US Vapour Product retail market.
At British American Tobacco, we understand all the different elements of what smokers like about the experience they get from cigarettes. This means we can better meet the needs of smokers who are seeking potentially less risky alternatives to cigarettes.
We’re best placed to deliver such products – we understand what consumers want, we have world-class research and development capabilities, we have robust product and quality standards, we have global reach and we market our products responsibly.
If we are successful in developing and bringing to market a range of products that meet the needs of adult smokers seeking potentially less risky alternatives to cigarettes, this will help to meet the objectives of a number of leading public health professionals. And, of course, it will also make commercial business sense to us and our shareholders.