Philip Morris' new vaping product may replace cigarettes. Here's why
André Calantzopoulos claims high switch rate for IQOS users
Philip Morris CEO André Calantzopoulos is focused on the future of the tobacco industry, which he claims -- despite the recent health headlines and government concerns -- is vaping.
The tobacco giant is "reallocating resources from cigarettes to the alternatives," Calantzopoulos said, in order to offer people who would other not quit smoking some products that "have less toxic ends" than cigarettes.
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Philip Morris International currently has 150 million global consumers for its tobacco brands — which includes the iconic Marlboro — and employs over 400 scientists, engineers, and technicians working on smoke-free products, according to the company.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PM | PHILIP MORRIS INTERNATIONAL INC. | 97.67 | +3.60 | +3.83% |
Philip Morris recently launched its vaping device, IQOS Mesh.
Instead of burning tobacco, IQOS heats the tobacco to a temperature of 350 degrees Celsius, at which point, the tobacco releases its taste without combusting, according to Philip Morris International. The company claims this lower temperature and lack of combustion reduces the levels of chemicals released compared to those released in cigarette smoke.
Picture of IQOS a new heat-not-burn tobacco product technology produced by Philip Morris International in Neuchatel, Switzerland
Calantzopoulos believes this product is appealing to current cigarette smokers.
"We believe [in order] to convince the people who smoke today to switch out of cigarettes, you need to offer them a variety of products that are as close in terms of taste or satisfaction," Calantzopoulos told FOX Business' Jack Otter.
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Speaking from Davos, Switzerland at the World Economic Forum, Calantzopoulos admitted during "Barron's Roundtable" that e-cigarettes will never taste exactly the same as cigarettes due to the fact that it doesn't burn the tobacco.
"But the closer we are, the highest ability we have to convince the people who smoke to switch," Calantzopoulos explained.
According to Calantzopoulos, IQOS Mesh has a "very high full switching rate." A full switching rate means the consumer will stop smoking cigarettes altogether and transition completely to vaping.
Picture of the IQOS 3 version, a new heat-not-burn tobacco product technology produced by Philip Morris International in Neuchatel, Switzerland
"Out of 100 consumers that will buy this product, 70 will switch completely out of cigarettes," Calantzopoulos qualified. "They will not smoke cigarettes anymore, and they will use this product, and that's the highest rates we have seen."
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Currently, IQOS is available in 52 countries according to Calantzopoulos. The FDA recently approved the product for commercialization in the United States.
Calantzopoulos also said the company did not rush the approval process. He maintained the FDA "reviewed the entire filing" of IQOS, "including how we manufacture them, including their safety issues from batteries to electronics to how to make sure the system provides always the same MRI results with the same reduction of toxicity that we submitted."
A customer examines caps for Philip Morris International Inc.'s IQOS smokeless tobacco devices at IQOS Store Ginza in Tokyo, Japan, on Monday, June 26, 2017. (Akio Kon/Bloomberg via Getty Images)
"The most urgent thing to do is switch," Calantzopoulos said of smokers.
The CDC suggests 14 percent of Americans aged 18 or older—or 34.3 million adults—smoked cigarettes as of 2017. This, according to the government agency, is a 6.9 percent decline from 2005. Of those people who currently smoke, Calantzopoulos hopes they will turn to products that "will have a positive impact on public health."
And for those curious, yes, Calantzopoulos uses IQOS himself.