ECigIntelligence analysts inject a note of caution into the heated-tobacco hype

  • Even without FDA approval of reduced-risk claims, ECigIntelligence analysts predict IQOS will do well in US
  • But success seen in Japanese market will be difficult to replicate

 

Heated tobacco will play an important role in the future of the US tobacco alternatives market no matter what the FDA eventually decides, analysts at ECigIntelligence believe.

We predict that heated tobacco products will be successful in the US market whether or not Philip Morris International (PMI) is successful in its application to use reduced risk health claims when marketing its IQOS product.

We note that although several claims were rejected, one of the company’s health claims was approved by the agency’s Tobacco Products Scientific Advisory Committee (TPSAC) – a fact overlooked in many reports on the matter and a significant positive in itself.

And if the FDA follows the panel’s recommendation on that, IQOS would be able to make some form of reduced risk claim based on last week’s decisions.

However, our analysts urge some caution.

The potential smoker conversion numbers for IQOS have excited investors for many months.

There has been speculation that a successful application could see heated tobacco overtake vapor e-cigarettes as the number one alternative tobacco product. But we believe that may be a step too far.

And we note that it may not be possible to replicate the success IQOS has enjoyed in Japan in other markets.

Barnaby Page, ECigIntelligence Editorial Director, said: “We expect heated tobacco may well have a strong role to play in the market, but those enthused by its commercial potential should consider all the issues.

“Undoubtedly it has plenty of positives for both the consumer and the industry, but exactly how it will co-exist with both conventional cigarettes and e-cigarettes remains open to question.”

 

Limited awareness

 

Research conducted by ECigIntelligence has shown little awareness of heated tobacco among e-cigarette users. 75% of French vapers had not even heard of heated-tobacco products.

There is also a degree of outside uncertainty. Regulation and studies into the health impact of heated tobacco are ongoing. Negative indications from either could restrict the market.

And there is no guarantee the products would replicate the accomplishments seen in markets such as Japan.

Japan remains an unusual market almost ideal for heated tobacco. It has:

  • A very small e-cig market due to nicotine restrictions
  • Low restrictions on tobacco advertising
  • Very high population density, making branded stores in urban centres a practical proposition
  • High disposable income levels, interest in technology and preference for light or menthol cigarettes among consumers.

Page added: “Even without reduced-risk approval, IQOS can succeed in the US – though it may never equal the performance seen in Japan.”

ENDS

For further information on developments in the heated-tobacco and electronic cigarette markets, please contact Barnaby@ecigintelligence.com

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