Dive Brief:
- Philip Morris International (PMI) is growing its smoke-free business through the U.S. release of its Iqos heat-not-burn devices, starting in Austin, Texas, the firm announced in a Facebook post.
- The tobacco giant has also named CPG veteran Seth Kaufman its new U.S. chief commercial officer, effective March 31. Kaufmann will report to PMI U.S. CEO Stacey Kennedy.
- These updates come as PMI is turning its attention toward smoke-free products, including its Zyn nicotine pouches, which were so popular during 2024 that demand outpaced supply in some areas.
Dive Insight:
In his new role, Kaufman will lead the commercial strategy for PMI’s smoke-free products, including Zyn, General-brand snus and Iqos. Smoke-free products made up about 40% of the company’s net revenue as of Q4 2024. Around this time, Goldman Sachs said it believed smoke-free products could make PMI the second-biggest nicotine player in the U.S. by 2035.
Kaufman comes to PMI from Vintage Wine Estates, where he oversaw the company’s restructuring as its president and CEO. He also spent nearly 18 years in a variety of roles with beverage company PepsiCo, including two years as its president of North America Nutrition and The Hive and a year and a half as the company’s chief marketing officer.
“As we invest in U.S. manufacturing and create new American jobs to meet the growing demand for our smoke-free products, Seth’s expertise in commercial marketing and in leading transformative growth strategies will accelerate our mission,” said Kennedy.
PMI got into the smokeless market in the U.S. through its 2022 acquisition of Swedish Match, which owned the Zyn nicotine pouch brand. Zyn’s popularity grew in 2024, and may grow further in 2025 after the U.S. Food and Drug Administration gave marketing approval to 20 of its products in January. Zyn was the first and so far only nicotine pouch to get that approval.
Iqos, meanwhile, debuted in Japan in 2014, but was not introduced to the U.S. until late last year, according to a Bloomberg report. It is now moving into wider release.
PMI’s smoke-free shift could help boost its bottom line. A recent Goldman Sachs report noted that PMI expects Iqos’ average net revenue per unit to be about four times higher than that of its international combustible cigarettes business. Further, it said PMI expects its Zyn U.S. gross profits to be eight times larger than combustible cigarettes.
