Quality Growth
Delivering Quality Growth emphasises the transition to a more balanced focus on top-line and bottom-line delivery, centred around our brands and innovation, and continuing to seek long-term opportunities Beyond Nicotine.
Inspiring New Category Innovations & Brands
We have established an important New Categories ‘bridgehead’ which underpins our transformation. We have built a fast-growing New Categories business of smokeless products in a short period of time with New Categories annual revenue now exceeding £3.3 billion.
Managed Combustibles Transition
We are committed to becoming a predominantly smokeless business, with a target to reach 50% of our revenue from Non-Combustibles by 2035.
Beyond Nicotine Foundations
Wellbeing and Stimulation
Consumers are increasingly seeking healthier lifestyles and “better-for-you” products that help them manage their daily wellbeing. We call this category Wellbeing & Stimulation (W&S) and expect the category to grow to £495 billion by 2030, from around £260 billion today.1
Note:
1. IRI/Circana Consulting, Euromonitor.
An overview of our Products
Vapour products*† are battery-powered devices that heat e-liquids to produce an inhalable aerosol (vapour).
Our leading, global Vapour brand, Vuse, plays a major role in providing smokers with a reduced-risk*† alternative to cigarettes.
Number of markets where the Group’s Vapour products are sold
Heated Products (HPs)* use heat to generate a nicotine-containing aerosol, which the user inhales. This category includes Tobacco Heated Products (THP) and Herbal Products for Heating (HPH).
Within HP, because the tobacco or herbal substrate is heated instead of burned, the resulting aerosol comprises mainly water, glycerol, nicotine and flavours – different to cigarette smoke.
Number of markets where the Group’s Heated Products are sold
In recent years, a new category of Modern Oral products*† has emerged.
These come in the form of tobacco-free nicotine pouches that are placed under the lip so that
nicotine can be effectively absorbed.
Number of markets where the Group’s Modern Oral Products are sold
The most common products in Traditional Oral are largely moist oral tobacco popular in the U.S., with the main brands being Grizzly and Kodiak.
These products are less finely ground than another Traditional Oral product referred to as Swedish-style snus. Both of these Traditional Oral products are available in loose form, as well as in pre-packed pouches.
We are focused on driving value from our strategic brands of Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport (U.S.), Natural American Spirit (U.S.) and Camel (U.S.), which now account for 66% of our combustible volume.
Our combustibles business is founded on understanding and meeting the preferences of adult smokers in all parts of the world.
Number of cigarette factories in 36 countries
Beyond Nicotine
As well as offering less risky*† nicotine-based alternatives, we see a new range of non-nicotine-based products forming an expanding part of our portfolio.
Notes:
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
† Our Vapour product Vuse (including Alto, Solo, Ciro and Vibe), and certain products, including Velo, Grizzly, Kodiak, and Camel Snus, which are sold in the U.S., are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance.