Philip Morris International (PMI) CEO André Calantzopoulos recently published a long speech at the Boston University CEO Club, the content talked about the new technology development of PMI to create a smoke-free future. It also talked about the current public misunderstanding of Philip Morris, and he said that Philip Morris International is currently using the new type of tobacco technology to renew kill the life of its own traditional cigarettes. If conditions permit, PMI will stop selling cigarettes faster.
Source: Philip Morris International CEO Speaks at Boston College Chief Executives Club
Before releasing the full text of his speech, let get to know PMI first.
PMI is the world’s largest tobacco manufacturer and currently operates in more than 180 locations. It employs nearly 80,000 people worldwide and was listed on the NYSE in 2008. It currently has a market value of $133.3 billion. In 2018, its annual revenue was 29.6 billion US dollars and the net profit was 7.9 billion US dollars.
Philip Morris was founded by tobacco company Philip Morris. In 1847, he opened a tobacco shop on Bond Street in London. In 1854, he started producing his own cigarettes. The production site was located in Marlborough Street in the same city. The street name eventually became the name of Philip Morris’s cigarette brand. The Marburg brand was originally created as a female cigarette with a cork filter. After Philip Morris became a US company, the Marburg brand was renamed as Marlboro.
In 1901, Philip Morris entered the United States, but the market size was only moderate. In 1954, Philip Morris acquired the company of Phnom Penh, and American Joe Kalman owned the control of Phnom Penh. After the acquisition, Kalman and his son Joseph Kalman III obtained a large number of Philip Morris shares and board seats. Mo also became the fifth largest tobacco company in the United States. Under the leadership of Kalman III, Philip Morris has built the Marlboro cigarette brand into NO.1 in the US cigarette market and is now the world’s largest cigarette manufacturer.
In 2008, Philip Morris International announced the divestiture from its parent company, Altria. The Altria Board of Directors said that the detachment of Philip Morris International was mainly driven by the different market dynamics of the US market and the international market.
Philip Morris International owns IQOS, a heat not burn electronic cigarette product. At present, the number of users worldwide has reached 10.4 million. In the first quarter, it sold 11.5 billion cartridges.
At the end of 2018, Altria acquired a 35% stock of Juul, another representative of e-cigarette, for $12.8 billion, pushing Juul’s valuation to $38 billion.
Therefore, the layout of the two traditional tobacco giants in the field of electronic cigarettes is super foresight. Unlike IQOS, the acquisition of Juul shares is a time to spend money. We believe that the e-cigarette market position of the two companies and the CEO’s speech are of great value to the industry, so the full text is shared with our readers.
Core points:
1. We want to create a smoke-free future – the future without cigarettes. This is a revolutionary transformation.
2. We will change the entire business model of Philip Morris – from the production of traditional cigarettes to the replacement of cigarette products. In essence, we are self-revolving from the inside out.
3. We have invested more than $6 billion in research to strengthen development and manufacturing capabilities to find better alternatives to cigarettes.
4. Unlike what everyone thinks, the main harmful ingredients are neither tobacco nor nicotine. The main harmful component comes from the smoke produced by the burning of tobacco, which contains thousands of chemicals.
5. Our goal is that by 2025, 30% of Philip Morris consumers will become IQOS users.
6, the direction of our efforts – to help those who want to quit smoking and can not get rid of a choice to reduce the harm to the body, at least can no longer use traditional cigarettes.
7. We insist that our smoke-free products are prepared for smokers who want to continue using tobacco or nicotine products. We do not provide these products to people who have never smoked or who have already quit smoking.
8. No one expects automakers to transition to electric vehicles without both manager support and consumer incentives.
As the CEO of Philip Morris International, I am honored to be here. Discuss with us today that we want to create a smoke-free future – the future without cigarettes. This is a revolutionary transformation. We believe that a candid dialogue like today can bring some changes to the world.Vision and transformation
Let me first clarify our business goals. We want to help smokers around the world quit smoking. It’s that simple. Perhaps you will be surprised to say this from a tobacco company CEO, but I have to tell you that they were equally astonished when I told my team in 2016.Of course, our tobacco products are still being perfected, but our plans to help smokers around the world to quit have not changed. By announcing the program, it will help our company move.
To achieve change, sometimes you have to trust your experience and encourage your team to get support.
For Philip Morris International, this means a complete transformation of the company’s development direction, not simply adding a substitute for tobacco products, but changing our entire business model – from the production of traditional cigarettes to the replacement of cigarette products. In essence, we are self-revolving from the inside out. As far as I know, no company has done such a pioneering work, and it is also true for tobacco companies.
Background statement
According to WHO, 1.1 billion adults worldwide are expected to smoke. The earliest heat not burn tobacco products were born in the late 1990s, but were not commercially successful. In 2003, an “electronic cigarette” product that volatilized nicotine vapor through electricity was invented in China and has been a huge success in the past decade, especially in the US and Europe. Philip Morris International launched IQOS in Japan and Italy in 2014, marking a major breakthrough in the development of new tobacco products.
So far, we have invested more than $6 billion in research to strengthen development and manufacturing capabilities to find better alternatives to cigarettes. This demonstrates the seriousness of our commitments – no public relations tricks, as some of our critics have said. Even among our competitors is unique.
This transformation is not only reflected in our products, but also in our corporate culture. The company is becoming more open and leads us towards diversification. Earlier this year, we became the first multinational company with equal wages to truly achieve equal pay for equal work for men and women.
Our efforts to reduce greenhouse gases have also been recognized, with significant results in reducing greenhouse gas emissions, mitigating climate change and improving reporting transparency, and have appeared on the Climate Development List of the Commission on Sustainable Development for the fifth consecutive year.
Our excellent research results are also open to anyone for inspection and verification. What we are doing is using technology to develop a new smokeless product.
In fact, we have been developing in this field for many years. There are now more and more government laboratories that have reached the same conclusions as us. It is feasible to create a harm reduction option for adult smokers.
Everyone knows that smoking is harmful to health, but not everyone understands the detailed reasons why smoking is harmful. Unlike what everyone envisions, the main harmful ingredients are neither tobacco nor nicotine. The main harmful component comes from the fumes produced by the burning of tobacco, which contains thousands of chemicals. Public health agencies list 100 substances that can cause lung cancer, cardiovascular disease, and emphysema.
Our product IQOS, which only heats and does not burn tobacco, significantly reduces the production of harmful substances and is an ideal choice for smokers.
Therefore, not every tobacco product is equally harmful, which is critical.
Today, approximately 7.3 million adult smokers worldwide have been converted to IQOS users, and IQOS has entered the market in 47 countries around the world. This week, the FDA approved IQOS for sale in the US. Although we have not yet obtained FDA certification for harm reduction products, it is a fact that IQOS has significant harm reduction effects.
This is an important milestone for Philip Morris International, but we must move on until the world gives up smoking. Our goal is that by 2025, 30% of Philip Morris consumers will become IQOS users.
As the CEO of Philip Morris International, I am honored to be here. Discuss with us today that we want to create a smoke-free future – the future without cigarettes. This is a revolutionary transformation. We believe that a candid dialogue like today can bring some changes to the world.Vision and transformation
Let me first clarify our business goals. We want to help smokers around the world quit smoking. It’s that simple. Perhaps you will be surprised to say this from a tobacco company CEO, but I have to tell you that they were equally astonished when I told my team in 2016.Of course, our tobacco products are still being perfected, but our plans to help smokers around the world to quit have not changed. By announcing the program, it will help our company move.
To achieve change, sometimes you have to trust your experience and encourage your team to get support.
For Philip Morris International, this means a complete transformation of the company’s development direction, not simply adding a substitute for tobacco products, but changing our entire business model – from the production of traditional cigarettes to the replacement of cigarette products. In essence, we are self-revolving from the inside out. As far as I know, no company has done such a pioneering work, and it is also true for tobacco companies.
Background statement
Please allow me to make some background statements. Today, according to WHO, 1.1 billion adults worldwide are expected to smoke. The earliest heated non-burning tobacco products were born in the late 1990s, but were not commercially successful. In 2003, an “electronic cigarette” product that volatilized nicotine vapor through electricity was invented in China and has been a huge success in the past decade, especially in the US and Europe. Philip Morris International launched IQOS in Japan and Italy in 2014, marking a major breakthrough in the development of new tobacco products.
So far, we have invested more than $6 billion in research to strengthen development and manufacturing capabilities to find better alternatives to cigarettes. This demonstrates the seriousness of our commitments – no public relations tricks, as some of our critics have said. Even among our competitors is unique.
This transformation is not only reflected in our products, but also in our corporate culture. The company is becoming more open and leads us towards diversification. Earlier this year, we became the first multinational company with equal wages to truly achieve equal pay for equal work for men and women.
Our efforts to reduce greenhouse gases have also been recognized, with significant results in reducing greenhouse gas emissions, mitigating climate change and improving reporting transparency, and have appeared on the Climate Development List of the Commission on Sustainable Development for the fifth consecutive year.
Our excellent research results are also open to anyone for inspection and verification. What we are doing is using technology to develop a new smokeless product.
In fact, we have been developing in this field for many years. There are now more and more government laboratories that have reached the same conclusions as us. It is feasible to create a harm reduction option for adult smokers.
Everyone knows that smoking is harmful to health, but not everyone understands the detailed reasons why smoking is harmful. Unlike what everyone envisions, the main harmful ingredients are neither tobacco nor nicotine. The main harmful component comes from the fumes produced by the burning of tobacco, which contains thousands of chemicals. Public health agencies list 100 substances that can cause lung cancer, cardiovascular disease, and emphysema.
Our product IQOS, which only heats and does not burn tobacco, significantly reduces the production of harmful substances and is an ideal choice for smokers.
Therefore, not every tobacco product is equally harmful, which is critical.
Today, approximately 7.3 million adult smokers worldwide have been converted to IQOS users, and IQOS has entered the market in 47 countries around the world. This week, the FDA approved IQOS for sale in the US. Although we have not yet obtained FDA certification for harm reduction products, it is a fact that IQOS has significant harm reduction effects.
This is an important milestone for Philip Morris International, but we must move on until the world gives up smoking. Our goal is that by 2025, 30% of Philip Morris consumers will become IQOS users.
Cannot be done separately, need to open a dialogue
We are in an era of transformation: fossil fuels are turning to renewable energy, gasoline is turning to electricity, and rash consumption is turning to an ethical life.
I hope to see that the transition from cigarettes to smokeless products is also part of the transformation of the times.
However, in order to do this, in order to succeed in this revolution we led, despite the FDA approval, we still need to be willing to join our partners, whether he is a state-level regulator – through Smokers provide better information on cigarette substitutes to help improve public health; or local health care professionals recommend an alternative to a non-smoking smoker.
Energy companies are invited to participate in discussions on climate change solutions. Large food companies also have a place at meetings to discuss hunger and obesity.
They were not required to stop production completely. Can you imagine the government asking the auto industry to abolish all combustion engines overnight? Can you imagine that regulatory authorities make it difficult for manufacturers to develop alternatives to combustion or to discuss cleaner fuels and engines? No one expects automakers to transition to electric vehicles without both manager support and consumer incentives. This transition should be properly arranged, knowing that consumers also need to be guided and motivated if they want to get better alternatives as quickly as possible.
We are no different from the above example: if regulators and health care stakeholders have a pragmatic and realistic vision of harm reduction, we will stop selling cigarettes more quickly. At the very least, we will ensure that existing smokers have access to accurate and non-misleading information and have the option to purchase smokeless products.
Consider changing
I believe that a responsible tobacco company has an obligation to help the people of the world get rid of smoking habits. I have seen Philip Morris’s efforts for more than 30 years in Philip Morris, but this revolutionary move is also the first thing for me. We have a transformative vision, a potential that has the potential to bring a dramatic, positive vision and a broader shift to public health and society.
To this end, I am leaving a few small questions here today:
1. Consider a smoker who is still smoking and provide a better solution.
2. You need to understand that Philip Morris International is making unique progress in this regard.
3. Please understand that we cannot achieve a smoke-free future by our own efforts. This requires everyone’s joint efforts.
Thanks to Douglas M.Deng for providing the news.
Reviews from Vape HK
AndrĂ© Calantzopoulos’s speech can be understood as a self-revolution of Philip Morris. The harm caused by traditional cigarettes and the increasing social condemnation, Philip Morris’s IQOS has upgraded the ignition mode of cigarettes, which can be seen as an upgrade of the tobacco industry. First, it does not destroy traditional tobacco production and manufacturing, second, reduce the harm caused by smoking cigarettes. Philip Morris has always been keen on external communication to create a smoke-free society, essentially an iteration of his old business model. Once PMI killed its own life, it had actually killed the life of its competitors in tobacco field.
