In announcing the launch of the IQOS v3 non-burning cigarette system, Shea Lih Goh, managing director of PMI (Philip Morris International) Japan said, "We at Philip Morris are leading the transformation in the tobacco industry to build a future with our smoke-free products that are better choices to conventional cigarettes."
She further noted that "Globally, we have more than 11 million IQOS users, and many more are on the way."
The IQOS project was started in 2008, with the first version of the product available in 2016.
The new flagship product is the IQOS 3 Duo, which carries sufficient charge for two consecutive uses, and is able to reach full charge in less than two minutes. A companion product - the IQOS Multi is an all-in-one lightweight version.
As the image at the top of this article shows, the IQOS 3 Duo comes in two parts (but that's not the reason for the name Duo). There is the cigar-like component into which the user inserts the "cigarette" (which PMI refers to as a HEET stick) and is used to consume the nicotine and there is the larger carrier in which the "cigar" is stored when not in use and also charges the battery for use. There is a large battery in the carrier and a smaller one to support the use of two HEET sticks. Duo refers to the ability to consume two HEETs on a single charge. During the product announcement, one of the presenters noted that customer research into "chain smoking" found that the majority of users would only chain two in a single session.
The image below demonstrates how the heating element pushes into the HEET to raise the temperature to the required 350 deg C.
In conjunction with the launch of the new devices, PMI also promoted their loyalty program IQOSphere which me might loosely describe as being related to an airline frequent flier program with points accrued (called 'coins') for various activities including attendance at events and purchasing products and accessories – higher status levels give access to closer ties with the company and additional bonuses. Much of the presentation of IQOSphere was in Japanese and we were unable to record the translation, so this is a very abbreviated summary.
Further, the company is rolling out a series of IQOS experience stores where loyalty members can purchase consumables and accessories and also relax in the coffee/tea lounge. The comparison with an Apple store was quite striking.
During a later interview, Shea Lih Goh told iTWire, "It is extremely important to explain very carefully what it is and to ensure they [new users] know how to use it - they take it home and they will face some problems and they will call us. And so this whole journey [is] why we are trying to enrich the support and service, because otherwise, without proper access to information or knowledge, the adult smokers who try IQOS might just switch back. So that's why we put a lot of effort to ensure this whole process."
With that concern in mind, she was asked whether there were videos and other resources demonstrating the use of IQOS, possibly on YouTube.
"We have on our website, but I think it depends on each country's regulatory [framework], because each country has specific rules and we have to comply with all these, so it's not always any video. Any place where we put, for Japan [for example] there are restrictions for when you can show the device, and sometimes you have to make sure that the person viewing it is confirmed adult.
"But where we can, where we have a valid, verified adult user then we are quite free to provide them with information and services and support."
She was then asked, "You're asking for a large emotional commitment, do you see that as a major barrier? You're buying into this massive ecosystem - the device is the easy part… you're talking about your loyalty programs, you're talking about all the other attributes… and I worry that people will see this as too much."
"Actually, on the contrary. What happens is, you get a device - our aim is not to say, 'buy the device and that's it.' We're saying, two groups… there are people who have not made the decision - they're not sure; we continue to provide information, so we say 'you can take it back after 14 days, try the different experience and we will support you.' So this is relieving people of the commitment of putting money (9,980 Yen - approximately AU$136 at the time of writing) to buy the device up-front. The second is, 'why don't you go on a subscription?' 600 to 900 yen [per month, we believe].
"IQOSphere [… is] making it easier and a richer experience for people, as opposed to 'buy the device and go home, and then we leave it to you to deal with whatever comes with it.'
As a non-smoker, this writer wondered how this system is going to be perceived by non-smokers, people who have never smoked.
Ms Shea-Lih described feedback from various people that noted a lack of yellowed walls and furniture, and also a cleaner environment with no ash and no possibility of fires. She also suggested a significant reduction in odour.
During a subsequent demonstration of the product, we noted an obvious odour, but one that seemed less unpleasant than typical tobacco smoke (we didn't inhale!).
This writer also spoke to PMI's senior vice-president of Design and User Experience, Bertrand Bonvin, who reaffirmed that the project commenced in 2008 and had already accumulated over 4,600 patents from the work in their innovation centre along with another 6,300 pending, making PMI (according to Bonvin) the 45th largest patent filer in the European Union.
Outlining the reasons for commencing the project, Bonvin noted that "Smokers have this duality where they like the product but are also concerned with the product."
With that in mind, Bonvin asserted that the IQOS system removes some 95% of the 'toxics' that might be found in a 'normal' cigarette. A peer-reviewed publication that investigated the chemical composition of the aerosol is available here.
For his sins, and in need of funds during his university days, this writer admits to having worked summer jobs in a cigarette factory and thus had significant understanding of the process of manufacturing cigarettes. With that in mind, and curious about the future of production, this writer enquired as to how the actual HEETs would be manufactured. Bonvin asserted that current production is being handled by a new plant in Bologna (Italy) but that in the future, existing facilities would be converted as the demand switched from traditional cigarettes to the new "heat-not-burn" solution. In addition, plants in Russia, Greece, Romania and Korea have already been converted and two additional production lines were added to an existing plant in Switzerland.
If the device creates no smoke, one wondered if there might be a relaxation of the rules on where they might be consumed. "We are satisfied that this device can be used in places where you have risk of fire because we are really not combusting, the aerosol is not smoke." However, this is not to give anyone the idea that it might be used on an aircraft!"
Maurice Swanson, chief executive, Australian Council on Smoking and Health, observed that, "The Australian Council on Smoking and Health (ACOSH) fully endorses the World Health Organization's position on heated tobacco products.
"More generally, ACOSH believes that Philip Morris International is ruthlessly exploiting the concept of 'harm reduction' to undermine the WHO's Framework Convention on Tobacco Control and undermine government's policies on evidence-based tobacco control.
"Please see here how Philip Morris International set out their strategy in March 2005 to use 'harm reduction' as their trojan horse.
Both Bonvin and Ms Shea-Lih spoke of the high levels of smoking and the strong sense of community within Japan as primary reasons for the launch in Japan and the structure behind IQOSphere.
Our time with both executives was brief, so the remainder of this report reflects a longer written conversation we had with a variety of internal spokespeople at PMI as we sought to clarify the product and the marketing strategy.
iTWire: Bertrand Bonvin spoke of an aerosol (referring to the vapour given off by the heated tobacco) - we assume there is considerable research into the exact composition of this material. Can someone provide information of what this aerosol contains and how it compares with 'normal' tobacco smoke?
PMI: As IQOS does not burn tobacco, it produces an aerosol whose composition is substantially different than cigarette smoke. While cigarette smoke is mainly composed of solid particles, IQOS vapour is mainly composed of water, glycerine and nicotine. The rest of the compounds, mostly vaporised from tobacco, cover a small portion of the mainstream aerosol. More specifically with regards to the product's aerosol, our studies have found that IQOS emits on average 95 percent lower levels of harmful chemicals compared to cigarettes.
We have conducted extensive research to confirm the risk reduction potential of IQOS compared to cigarette smoking. Today, the totality of evidence, which comprises PMI's clinical data, aerosol chemistry and non-clinical data, demonstrates that switching to IQOS completely, while not risk-free and addictive, presents less risk of harm compared to continuing to smoke cigarettes.
Beyond our scientific assessment, we also welcome the independent research that is starting to emerge on our smoke-free products. To date, more than 30 studies from independent laboratories and government research institutes, in countries including Germany, Japan and the USA, have confirmed important elements of our research.
iTWire: We asked Bertrand about the ability of various smoke detectors to identify this product and offered the context of aircraft toilets. He latched onto this scenario and responded without really answering the question. We are concerned that these may be used in aircraft and other locations where smoking is banned. What steps are being taken to limit their use in these locations?
PMI: This is really a question for the airlines and regulators. As noted, IQOS and other innovative products do not burn tobacco and therefore generate an aerosol that is significantly different from cigarette smoke.
Using IQOS does not negatively impact indoor air quality based on international standards. That said, in the absence of regulation specifically defined for the emerging category of non-combustible products, including e-cigarettes and heat-not-burn tobacco products, we recommend that IQOS users follow applicable regulation and refrain from using IQOS in places where cigarette smoking, or using heated tobacco products, is prohibited. Even where permitted, we recommend IQOS users be aware of those around them and ask first before using where appropriate.
iTWire: Clearly the event last week was a Japanese launch, and much has been said about the propensity of the Japanese to take on an ecosystem such as this. However, iTWire is intended for an Australian and international audience. Can someone please identify the plan for world-wide release of the IQOS device?
PMI: IQOS 3 DUO will be available in Japan this month and subsequently rolled out in most of the markets where IQOS is currently available by the end of 2019.
Today, IQOS is available for sale in 48 markets in key cities or nationwide. We estimate that approximately 8 million adult smokers around the world have already stopped smoking and switched to IQOS. An overview of the countries where IQOS is available can be found in the attached visual (source: PMI Investor Information).
Contrary to the growing number of countries that are embracing the potential of smoke-free products for public health and updating their legislation (such as the US, the UK, New Zealand, Portugal and Italy), Australian legislation does not allow the commercialisation of heated tobacco product devices. For this reason, the product is not available in Australia.
All countries where the product is available are shown here:
In response to this comment, the Federal Department of Health was asked for its response. A spokesperson said, "The Department is aware of the IQOS "heat not burn" product and other similar products. [Further,] the Department notes that nicotine for such devices is prohibited by drugs, poisons and controlled substances legislation in all states and territories (including the Poisons Standard)."
iTWire: What research has been done to assess the impact on, and perception by, non-smokers? A unit was 'burning' (yes, we *know*!) in our presence and there was a clear odour... not particularly unpleasant, though. Also, just like second-hand smoking, how much nicotine (and other chemicals) will be ingested by those around the user?
PMI: According to our indoor air quality assessment, IQOS use does not negatively impact indoor air quality, and IQOS is not a source of second-hand smoke.
More information on our indoor air quality assessment for our smoke-free products is available here.
iTWire: Does the company see this as a long-term total replacement for 'normal' cigarettes?
PMI: PMI is building a future on smoke-free products that, while not risk-free and addictive, are a much better choice than continuing to smoke. Quitting smoking is the best option, but we want to provide less harmful alternatives to smoking for those who don't quit.
We are fully committed to doing everything we can to ensure that smoke-free products replace cigarettes as soon as possible. That said, replacing cigarettes with smoke-free products will take time and does not depend only on our efforts. For example, governments have a role to play by defining policies that encourage adult smokers to switch, and smokers ultimately will have to completely switch to these products.
On our end, we are making significant efforts to accelerate the transition and we are increasingly shifting resources to the development, assessment and commercialization of smoke-free products. For example, in 2018, 92 percent of our total R&D expenditure and 60 percent of our commercial expenditure related to our smoke-free products. Our aspiration is that by 2025, more than 30 percent of our total shipment volume and between 38 and 42 percent of our total net revenues will be generated by our smoke-free product portfolio. For reference, in 2018, smoke-free products represented 5% of our total shipment volume and 13.8% of our total net revenues.
Also for your background: a recent study from the American Cancer Society found that cigarette sales began to substantially decline at the time of the introduction of IQOS in each of 11 Japanese regions.
iTWire: Having worked for many months in a cigarette factory (it was a summer job for many years during our university days), we have a very good understanding of the full manufacturing process. It seems that the production of the new cigarette 'cartridges' will be much simpler. As far as I could see, the leaf had been rolled into the cigarette, and wasn't cut first (this is a huge part of the current process) and additionally, the cigarettes are much smaller and require no filter – this should cut down on discarded butts.
PMI: The manufacturing of the tobacco consumables that are used with IQOS (commercialised as HEETS or Heatsticks in some markets) is a technologically advanced process and is different to the manufacturing of cigarettes. As consistency in the composition of the aerosol generated is key to the validity of our scientific assessment, the quality standards applied to heated tobacco consumables are also higher than for cigarettes and closer to the ones applied in the pharmaceutical industry.
HEETS are specially designed tobacco products that contain tobacco material and several filter sections. They are made up of elements that include a tobacco plug, hollow acetate tube, polymer-film filter, cellulose-acetate mouthpiece filter, and outer and mouth-end papers. Our heated tobacco products are made by blending high-quality tobaccos from selected types and origins. These tobaccos are then ground to provide the perfect mixture and reconstituted back into a tobacco sheet to manufacture HEETS.
For background, some b-roll of the manufacturing of HEETS in our factory in Bologna, Italy is available in our Media Centre.
With regards to the topic of discarded butts: although filters of heated tobacco units — like those of cigarettes — are made out of cellulose acetate, a bioplastic that will biodegrade over time, we focus our efforts on campaigns that will prevent them from ending up in the environment. That said, research we've conducted in the field with the help of an AI monitoring technology showed that heated tobacco units are significantly less likely to be discarded as litter than cigarette butts. As they do not burn, they do not need to be stubbed out and they are much less smelly and unpleasant to keep than cigarette butts in the absence of a proper disposal receptacle. In addition, as used heated tobacco units contain much less toxins than cigarette butts and users can easily keep them for collection, they are a better candidate for a circular economy. Collection and recycling programs are currently under review. PMI is committed to making smoke-free products a better choice not only for adult smokers but also for the environment.
iTWire: We didn't get a chance to see a fully used cigarette - what does the discard look like? How is it ejected from the smoking unit? Is there a video of someone using this from power-on to completion of a cigarette?
PMI: After use, the user needs to pull the upper element of the IQOS holder and remove the heated tobacco unit. As the tobacco is heated and not burned, the unit does not reduce in size after use. The colour of the tobacco plug and paper is altered because of the heating. With regards to this last question, I am afraid I don't have a relevant video at hand.
PMI reported that they have had in excess of 430 R&D experts working on this product representing 30 scientific and engineering disciplines including materials science, consumer electronics, clinical science and systems toxicology. To date, some U$6 billion has been invested.
Libby Jardine, chair, Tobacco Issues Committee, Cancer Council Australia has some final thoughts on this product (and others from similar companies). "'Heat-not-burn' products are among a growing range of novel products developed by tobacco companies to diversify their markets while opposing evidence-based action to reduce smoking, aggressively promoting addictive tobacco products in developing and developed countries and trying to delay quitting and recruit new nicotine addicts. Australia's Poisons Schedule prevent their marketing and sale in Australia.
"As the World Health Organisation has noted, future independent research will be required to address concerns about harms (both direct and second-hand), any reduced harm or cessation claims, role in cigarette promotion and appeal to youth, and evidence of promotion to young people. Claims by tobacco companies and their associated organisations in these areas should of course be treated with scepticism. They should not be permitted to use any of these products to distract attention from the action recommended by health authorities to reduce smoking. "
The writer attended the product launch in Tokyo as a guest of PMI.