British American Tobacco (BAT), estimated to be the world’s second largest tobacco group by global market share, has confirmed reports of having established Nicoventures Limited, a start-up company that aims to commercialize sans-tobacco nicotine products which could help wean smokers off its cigarettes.
A bold move you think ? Sure – in terms of creating a product (tobacco-free smokes) that directly competes with the primary product of the group. But also a very market-responsive move, given that reactions to the dangers of tobacco and smoking tobacco-based cigarettes are becoming more wide-spread globally (as is also evident in declining tobacco sales).
The establishment of Nicoventures by BAT is a natural extension of the company’s approach to tobacco harm reduction that has been developed by BAT over recent years.
Nicoventures will be managed separately from the Group’s tobacco businesses.
With the aim of providing adult smokers with a variety of non-tobacco based options which would offer the same experience as a cigarette without the real and serious health risks of smoking, Nicoventures is looking at entering a market that to date has not been explored.
While Nicoventures refused to reveal how exactly the tobacco-free nicotine products would work, the company’s chief executive Adrian Marshall did say in a statement that the first set of products by Nicoventure are being developed externally and would be different to cigarette substitutes that currently exist in the market, such as electronic cigarettes, nicotine patches and gums.
According to market analysts, BAT, through Nicoventures, is hoping to build a substantial consumer business with earnings that would likely compensate for the company’s declining tobacco sales.
Good for Public Health?
While British American Tobacco has considerably impressed some public health experts, it is likely to have a hard time winning over staunch anti-tobacco campaigners like ‘Action on Smoking and Health’.
Deborah Arnott, CEO of Action on Smoking and Health expressed her skepticism towards BAT’s newest announcement by saying that, “This is the latest in a long line of attempts by BAT to give itself an ethical makeover and de-toxify its brand”.
“It will only succeed in doing so when it stops making and marketing smoked products which are highly addictive and kill half all their long-term users.” She added in her statement.
Different to other non-tobacco products
According to Adrian Marshall, Nicoventures CEO “Nothing on the market meets the sensorial, emotional and physiological needs of smokers ... In the UK there are about 10m smokers – and only 150,000 of them buy nicotine products, so something is not working.”
A primary reason for this, according to David O’Reilly head of R&D at BAT, could be that these products do not deliver nicotine fast enough or in high enough doses.
Do we sense a leader there? Is the USP of Nicoventures products going to be “More Nicotine, Faster”? Lets wait and see…