Altria plans to double its net revenue from smokeless products in the next five years. Photo credit: Altria Group
Altria Group is shifting it business towards smokeless products more after it divested itself of Juul Labs at a loss of at least US%12.5 billion, writing down the value of its 35% stake in Juul to just US$250 million before exchanging it for intellectual property rights to some of Juul’s heated tobacco prototypes. Now, Altria is currently developing a new range of e-cigarettes, heated tobacco products, and oral nicotine pouches. They also have acquisition plans for vaping pioneer NJOY Holdings Inc.
The Wall Street Journal reports that Altria plans to export its reduced-risk products and is thinking about introducing non-nicotine products like cannabis products or caffeine pouches.
For the first time, Altria set volume and revenue targets for its switch to smoke-free products, aiming to increase its smoke-free sales volume by at least 35% over the next five years as well as double its net revenue from smoke-free products to US$5 billion by 2028, including US$2 billion from new reduced-risk products.
According to Billy Gifford, Altria’s c.e.o, the company‘s past efforts to develop or acquire products were “chasing the market”, adding that “You’re constantly watching what the consumer is telling you in the marketplace, but none of them were satisfying the consumer enough to ultimately meet all of their needs and desires.” Altria will now seek feedback from smokers throughout the development process and make adjustments as a result.
Altria reported US$2.6 billion in net revenue from smoke-free products last year, almost all of which came from brands of moist smokeless tobacco like Copenhagen. The Food and Drug Administration has not yet approved many of the new products in Altria's strategy, so they cannot be sold until they are. Years could pass during that process.