Big Tobacco is Increasingly Going Brick-and-Mortar
December 01 2016 - 8:13AM
Dow Jones News
By Saabira Chaudhuri
On Thursday, British American Tobacco PLC opened a store in
Milan to sell its vapor product Vype and educate customers about
how to use it.
The strategy mirrors that of rival Philip Morris International
Inc., which on Wednesday opened a store in London to launch its
heat-not-burn product iQOS and already has stores in markets like
Switzerland, Japan and Italy.
Apart from just selling its e-cigarettes, BAT hopes the new
store will serve as a marketing tool: helping drive awareness about
fledgling products like a new Vype-branded vaping device it
launched Thursday, called Pebble.
Shaped like a pebble and designed to fit in the palm of one's
hand, the new device has an all-day battery charge and can be used
with liquids that have four different nicotine levels and six
flavors.
"If we're going to massify the market--inject life into it--we
have to come up with these innovative, groundbreaking products,"
said Kingsley Wheaton, BAT's head of so-called next-generation
products.
The London-based company has spent $1 billion on next-generation
products over the past five years.
BAT's product launch comes after Philip Morris's chief executive
on Wednesday said the tobacco giant could walk away from selling
traditional cigarettes altogether someday and is shifting its
resources to focus on cigarette alternatives.
BAT CEO Nicandro Durante has been more circumspect, indicating
that e-cigarettes and other vaping devices will be slow to catch
on, a situation that could mirror the beer industry's decadeslong
quest to turn nonalcoholic beer into a mainstream offering.
Mr. Wheaton estimated the next-generation-products market will
be worth GBP15 billion ($18.7 billion) in the next five years but
said he thinks traditional cigarettes are here to stay for at least
the next several decades.
BAT, which is in the midst of buying the rest of Reynolds
American Inc., has been working to develop a broad spectrum of
cigarette alternatives. Besides the Vype e-cigarette line, BAT is
launching a new heat-not-burn product called Glo later this month
in Japan. The company also plans to release next year a new product
called Vype Raptor, which Mr. Wheaton said uses a different way of
atomizing and vaporizing e-liquids than existing products. He
declined to elaborate, saying the details are confidential.
The company also has a medicinal license in the U.K. for a
nicotine inhaler called Voke, although a year after Britain's drug
regulators granted the license, there still is no sign of it being
commercially available.
"We're still working through the many manufacturing challenges
of Voke," Mr. Wheaton said. "It is a very complex and challenging
product to miniaturize at speed."
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
December 01, 2016 07:58 ET (12:58 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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