BAT aims to double the sales of its harm reduction devices in a year

Last Wednesday on the 25th of October, British American Tobacco (BAT), said that it is aiming to double the sales of its "new generation products" to $1.3 billion in 2018.

Diane Caruana

October 30, 2017

A couple of months back in September, BAT announced major changes in its management structure, in order to incorporate vaping products in its core business. “Now that we have built a successful NGP (next generation products) business which is poised for substantial growth, we will be fully integrating NGP to leverage the scale and expertise of the whole group to drive growth in an area that is fast becoming a key part of our mainstream business,” said the tobacco company at the time.

BAT’s business strategy includes increasing revenue from its safer alternatives to $6.6 billion by 2022.

BAT and Philip Morris (PMI), the biggest tobacco companies in the world, were the first to invest in electronic devices a few years back. In fact last year, PMI made headlines when Andre Calantzopoulos, the company’s CEO said that he would like “to work with governments towards the “phase-out” of conventional cigarettes”. Additionally Peter Nixon, the Managing Director for UK and Ireland had said, “We want to move towards a smoke-free future and a lot of that is incentivising people to move across from cigarettes to something that is less harmful.”

Bat, the owner of Lucky Strike, Pall Mall and Camel seems to be set on following suit. Last Wednesday the company acknowledged that its traditional business is under pressure, as awareness on the dangers of smoking keeps rising. Hence its business strategy includes increasing revenue from its safer alternatives by £5 billion, to $6.6 billion by 2022.

Glo vs iQOS

Additionally also earlier this week, the tobacco company announced that it will be extending its business to Russia with its heat-not-burn device. Glo, a direct competitor of PMI’s iQOS, is currently available in Canada, Japan, South Korea and Switzerland, making the Russian market the fifth in which its launched.

Both Glo and iQOS, are battery operated smokeless alternatives to combustible cigarettes and work by heating sticks containing tobacco leaves. These refills which look like short cigarettes, must be inserted into the devices and are heated up once the devices are turned on. However, Glo is marketed as simpler and more practical to use than iQOS.