Our principal Sustainability Agenda focus area
We are committed, as our principal focus area, to reducing the health impact of our business through offering a greater choice of enjoyable and less risky products for our consumers.
New category alternatives to cigarettes, such as vapour, tobacco heating and modern oral products, already have an estimated 68 million consumers worldwide.
They provide options for the estimated 19% of the world’s population who continue to smoke to switch away from cigarettes.
To succeed in this, the following key enablers need to be in place: consumer choice; world-class science; standards and regulation.
We have a clear purpose to build A Better Tomorrow™ by reducing the health impact of our business.
As such, alongside our traditional cigarette products, our broad portfolio of non-combustible products includes reduced-risk*† alternatives such as vapour products, tobacco heating products, and modern oral nicotine pouches, as well as traditional oral products such as snus and moist snuff.
Our ambition is to have 50 million consumers of our non-combustible products by 2030 and to accelerate the growth of our New Category revenues at a faster rate than our total revenue, reaching £5 billion in 2025.
To achieve this, we are developing a deep understanding of our consumers and anticipate trends with powerful foresights, data and analytics. We make significant investments in research and development to deliver innovations that satisfy consumer tastes and generate growth for the business. And we’re opening up to radical new ideas and seeking out the inventiveness of others through strategic investments and partnerships.
Since launching our first vapour products in the UK in 2013, we have made significant progress in developing, manufacturing and commercialising a range of new category products. Today, our new category products are available in over 50 markets globally and in 2020 were used by 13.5 million consumers.
To help us achieve our goals, we are also simplifying our range into three strong, trusted international brands that can compete on the global stage: Vuse in vapour, glo in tobacco heating and Velo in modern oral product categories. As well as giving us a clear focus for our growing marketing investments, this change will make it easier for consumers to recognise and navigate our product portfolio. Although this shift has been slowed from the timing we originally announced in early 2020 due to the disruption caused by COVID-19, we are already accelerating our New Categories brand awareness through a truly global partnership with McLaren.
Read more here.
Today, 13.5 million consumers regularly use one of our non-combustible products*† across over 50 markets. And we are expanding to further markets as quickly as we can. The global COVID-19 pandemic caused some disruptions. These included product, sales or supply chains restrictions, and the restriction in sales of vapour products in 2020 in South Africa in response to COVID-19. Despite these, we are proud of the resilience our teams on the ground have demonstrated to continue delivery. The pandemic also impacted our consumer activation plans in some key markets including Japan, the US and Europe. Even under these challenging circumstances, we continued to deliver against our strategy and grew our New Categories business by 15%. In 2019, we announced our plans to simplify the New Categories portfolio by consolidating all our products under flagship brands Vuse, glo and Velo. We made good progress, but the disruption caused by COVID-19 means we have had to defer those plans until 2021 in a number of markets. Pilot schemes in emerging markets are ongoing, with initial encouraging results in Pakistan and Indonesia. In Kenya, we have temporarily suspended sales due to local regulatory challenges and continue to engage with the local authorities. In the US, we strengthened our portfolio of modern oral products by the acquisition of certain assets from Dryft, with national rollout continuing in early 2021. We are proud of how much we have already achieved, but there is more to do. We will accelerate our progress to generate a larger proportion of our revenue from products other than cigarettes, in turn reducing the health impact of our business.
We apply our peer-reviewed scientific framework to assess the emissions, exposure and risk of our products. Product safety standards go hand-in-hand with sound science – we scrutinise all the ingredients and our products benefit from thousands of hours of testing before they reach the consumer.
We openly share our science, publish our findings in peer-reviewed journals, present at conferences and to government advisory committees. We also publish comprehensive details of our research programme on our dedicated bat-science.com website.
Our latest clinical trial for our tobacco heating product, glo, is the first ever to show that switching to exclusive use of glo instead of continued smoking is comparable to smoking cessation. We know scientific substantiation is essential for our New Category products to make tobacco harm reduction a reality. And we are proud to be leading the way with our world-class science.
To date, we have published over 90 peer-reviewed papers on our new category products. The results indicate that our products have the potential to be significantly less risky than cigarettes and we’re continuing to establish more evidence to support this.We will publish our biennial Science & Technology Report later in 2021.
We follow strict standards for product safety and for ensuring all our product marketing worldwide is aimed only at adult consumers and does not engage or appeal to youth. We openly share our approach and advocate for industry-wide standards and regulation.
We think regulation of new category products should enable market availability, apply the highest quality and safety standards, allow communication of the potential benefits and risks, and ensure affordability for consumers by taxing them appropriately – all the while preventing youth appeal and access.
We’ve evolved our International Marketing Principles and Youth Access Prevention Guidelines to reflect our multi-category portfolio. We’ve openly shared our approach to product stewardship and have worked as part of multi-stakeholder groups on the development of industry-wide standards, including with the British Standards Institute , the EU Standards body (CEN) technical committee and the International Organization for Standardization (ISO) .
* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
† Our products as sold in the US, including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to FDA regulation and no reduced-risk claims will be made as to these products without agency clearance.