Philip Morris International - the global tobacco giant is backing the Foundation for a Smoke Free World by committing $1 billion.
How is the market presently?
Smoking culture is declining globally.
China, which accounts for 43% of the world’s cigarette consumption, has seen a particularly big fall.
Tobacco industry has also been suffering serious regulatory backlash of late.
In the US, the Food Drug Authority - FDA ruled that cigarettes would only be allowed to contain non-addictive levels of nicotine.
Newer recreational modes like vaping, e-cigarettes, smoke-free tobacco are getting increasingly getting popular.
Why such a move?
Every disruption causes traditional businesses to either perish or refigure themselves to survive.
Anti-smoking campaigns have been a major disruption to the cigarette businesses.
This thereby requiring course correction for survival and Philips Morris seems to have realised this.
Big tobacco’s future rests on quickly switching over to alternatives.
Hence, there is value in hedging against the fallout of anti-smoking advocacy.
Big cigar manufacturers having already lost out on the first-mover’s advantage to much smaller e-cigarette makers.
By supporting anti-smoking drive, the hope now is to capitalise from the next major shift in consumption patterns – the movement of chronic smokers towards smokeless alternatives.
