E-Cigarettes: Imperial Tobacco

From TobaccoTactics
Jump to navigationJump to search

Imperial Tobacco set up a subsidiary Fontem Ventures in 2012, through which it has developed and sold its e-cigarettes since 2014.[1]

Note: Imperial Tobacco changed its name to Imperial Brands in 2016. Here we use ‘Imperial’ for both. Fontem Ventures is a wholly owned subsidiary, so we refer here to the parent company (Imperial), except where it is helpful to specify Fontem Venture’s role (for example where the subsidiary initiated legal action, or lobbying activity). Renaming companies and setting up subsidiaries not only performs a business function, but can help tobacco companies to distance elements of their business from their core activity of selling tobacco.[2][3]

Initially Imperial’s markets were the United States (US), the United Kingdom (UK), France and Italy. Since the beginning of 2018 it has expanded into Western and Eastern Europe, Russia and Canada, and launched a nicotine free e-cigarette in Japan.[4][5] In November 2019 Imperial reported that blu was on sale in 16 countries.[6]

Acquired E-Cigarette Companies

Dragonite

In August 2013, Imperial paid US$75 million to acquire Hon Lik's e-cigarette company Dragonite, including its Research & Development facility in Beijing.[7][8] Lik, a Chinese pharmacist, is credited with inventing the first e-cigarette in 2003.[9]

The first e-cigarette launched in 2014 by Imperial in the UK was Puritane, a result of its collaboration with Hon Lik.[10][11] Sold in Boots pharmacies this product was initially submitted for licensing as a medical device in the UK (see below).[12]

Lorillard’s Blu

The company acquired the blu brand when US tobacco company Reynolds American Inc. (RAI) purchased another US tobacco company Lorillard in July 2014. Amidst antitrust concerns that the merger would give RJ Reynolds an unfair advantage over the US nicotine market, Reynolds sold blu (along with cigarette brands Kool, Salem and Winston, and a manufacturing plant) to Imperial for US$7.1 billion. When speaking of the company's new acquisition, Imperial 's chief executive Alison Cooper said, "This is a great opportunity to transform our U.S. business and secure a significant presence in the world’s largest accessible profit pool."[13][14]

Von Erl

Imperial bought the Austrian e-cigarette company Von Erl in June 2017, for GB£26.7 million (around US$34.4 million). This deal included Von Erl’s US subsidiaries.[15] The ‘My VonErl’ e-cigarette was reportedly relaunched as ‘myblu’ in 2018.[5][16][17][18]

Blu became Imperial’s flagship brand in 2018 which was described as a “transformative year by Imperial.[19]

Interests in E-Liquid Companies

  • Nerudia – Acquired by Imperial in November 2017.[20] The owners of Nerudia had sold a previous company CN Creative to British American Tobacco in 2012.[16] By 2019, Nerudia’s role was supporting Fontem Ventures with product innovation and its website stated that it was the “home of R&D for Next Generation Products (NGPs)”.[21]
  • Cosmic Fog - In March 2018, Imperial acquired a stake in this US e-liquid business. According to market research company Euromonitor International, Cosmic Fog was selling its products in 60 countries, including 5,000 vape stores in the US.[19][22][18] Imperial did not disclose the size of the share.

Patent Cases

In March 2014, Imperial launched legal proceedings (as Fontem Ventures) over patents in California against nine of its American e-cigarette rival companies, including the top three: Lorillard's Blu Ecigs (now owned by Imperial), NJOY, and Logic (acquired by Japan Tobacco International in July 2015).[23][24] The lawsuits alleged patent infringement, citing four intellectual property patents that were purchased as a part of its Dragonite acquisition. The majority of the cases were settled out of court in 2015 and 2016.[25][26]

Fontem Ventures also sued Altria subsidiary Nu Mark in 2016, over its MarkTen and GreenSmoke e-cigarettes, a case which was settled out of court in 2017.[26][27] In October 2018, Fontem settled four lawsuits for patent infringement it had instigated against RJ Reynolds (BAT).[27][28]

Product Innovation

From Medical Device to Lifestyle Product

Puritane was initially marketed as a healthcare product. Imperial closed a deal with Boots pharmacies to sell the Puritane brand throughout its pharmacies in the UK.[29] Imperial (through Fontem Ventures) applied to the UK Medicines and Healthcare products Regulatory Agency (MHRA) in 2014 to have Puritane licenced as a medical device.[30] If successful, this would have allowed the company to market the product with reduced risk claims. In April 2017, in response to a Freedom of Information request by the University of Bath's Tobacco Control Research Group, the MHRA confirmed that “according to our licencing records there are no currently granted licences for any product named ‘Puritane’, nor are there any licences held by Fontem Ventures”.[31] Therefore it is reasonable to assume that if Fontem Ventures had lodged an application for Puritane in 2014, the application was unsuccessful or had expired.

A second e-cigarette called JAI was launched in France and Italy in March 2015.[32][33][34] Unlike Puritane, Imperial positioned JAI as a lifestyle product, marketing it through tobacconists.[35] PR company Aspect Consulting helped launch the e-cigarette in France through a mix of “online, traditional media and trade communication activities”.[36] Like Puritane, JAI was also discontinued.[37][38]

Since 2016, Imperial’s strategy has been to focus on blu, marketing it as a lifestyle product (see below).[39][19]

Image 1. A selection of fruity blu e-cigarette flavours (screengrab from UK website taken in November 2019, www.blu.com)

Multiple Flavours

Similar to cigarettes, flavour is an important product innovation tool to boost e-cigarettes sales. In 2019, Imperial marketed a variety of flavoured e-liquids, including: Peach Passion, Vanilla Creme, Mint Chocolate, Tropic Tonic, Berry Swirl, and Caramel Café (see image 1).[40] Like other companies, Imperial has been accused of using e-cigarette flavours that are attractive to children and young people. Evidence shows that fruit and menthol-flavoured e-cigarettes are more appealing to young people than tobacco flavoured e-cigarettes.[41] In a 2015 submission to the Australian Senate inquiry into ‘Personal choice and community impacts’, Imperial (as Fontem Ventures) declared that: “flavours that clearly appeal primarily to minors (e.g. candy flavours, bubblegum, milkshake) should not be marketed”.[42] (In line with its policy, Imperial (Fontem) does not market these particular flavours, but it does market fruit and menthol flavours).

After a rapid increase in the numbers of children and young people using e-cigarettes in the US, in 2018 the FDA sent warning letters and penalties to retailers found to have sold e-cigarette products to children.[43] In September 2018, the FDA wrote to Fontem Ventures giving the company 60 days to provide a written plan to “address the rate of youth use of Blu products”.(Similar letters were sent to JUUL Labs, Altria, Reynolds American Inc. (RAI) and JTI).[44][45]

While Imperial subsequently announced plans to raise minimum age requirements on its US websites (to 21), and encourage retailers to use age verification systems, it continued to market a range of flavours such as “honeymoon”, “neon dream” and “melon time”.[46] The company denied that fruit flavours attracted children to e-cigarettes and blamed other companies, in particular JUUL Labs for the rise in youth use.[46][47] Imperial also said to be taking the issue “very seriously”, and that it was developing technological solutions such as child locks and geofencing.[46] As of November 2019 it was not clear which, if any, of these new measures had been put in place. Imperial published a pre-emptive statement on the Fontem Ventures’ website, before the FDA had concluded its investigations or issued its guidance, saying that:

“…we believe the forthcoming FDA Guidance restricting the sale of flavoured e-vapour products will have unintended consequences. These include deterring adult smokers from trying vaping, potentially encouraging adult vapers to return to smoking, growth in DIY or illicit flavour-making, and the potential development of an illicit trade in flavoured e-liquids or flavour agents.”[48]

No supporting evidence was given for these claims in the statement. Claims of ‘unintended consequences’ are made repeatedly by tobacco companies when [against regulation], including that the regulations will not work, or that they will lead to an increase in illicit trade.

Image 2: Imperial’s ‘intense’ nicotine salt e-cigarette (Source: Imperial Brands, ‘Building blu’ presentation, 2018)[19]

Nicotine Levels

Blu e-liquid products are available in different nicotine concentrations in different countries, according to national regulations. In the European Union (EU), the highest permissible level of nicotine in e-cigarettes is 20mg/ml (20%). Imperial states on the UK blu website that its e-liquids come in a choice of nicotine level of 0.8% (around 9 mg/ml) or 1.6% (around 16 mg/ml).[49]

In July 2018 Imperial launched a range of “Intense” tobacco and menthol flavoured e-liquid capsules for use in myblu.[50] This range of e-liquids contain nicotine salts (see Image 2), which are created when ‘freebase’ nicotine is dissolved in acid.[51] This process can make a higher dose of nicotine more palatable, and so allow higher doses of more concentrated nicotine to be consumed. On blu’s Uk website, the Intense capsules all contain 18mg of nicotine.[39] At the same time, Imperial launched another range of e-liquids in the US, called “Salt of the Earth”, for use in refillable devices. Although this range was on sale at independent US online retailers (in 24 and 48 mg/ml strengths), in November 2019 they were not available on blu’s US website.[52][53][54]

In Japan the sale of nicotine liquids is banned. In June 2018, Imperial launched a version of myblu in Japan, using flavoured liquids without nicotine.[55] According to Euromonitor, Imperial consequently captured 90% of the Japanese market.[4][56] However this market was at the time very small (around US$1.1 million in value, compared to the huge and fast growing Heated Tobacco Products (HTP) market worth US$ 7.4 billion, in which Imperial at the time had no share).ref name=eurvapour/>

“Open Innovation”

On the Nerudia website Imperial invites others to let them know about “novel electronic vapour products” that they have developed as well as HTPs and the associated areas including batteries, heating systems, and packaging. In 2019, areas of interest for e-cigarettes were listed as:

  • “Enhancing nicotine delivery
  • Enhancing flavour delivery
  • New mechanisms of vapour generation
  • New product formats
  • New formulations”[57]

Applying for FDA Approval

The US Food and Drug Administration (FDA) requires companies to submit a Premarket Tobacco Product Application (PMTA) for any new e-cigarettes they wish to sell.[58] As a large number of products were coming onto the market without approval, the FDA required that companies needed to submit applications for those already on the market as of 8 August 2016. As long as a PMTA was submitted within ten months, the products could remain on sale and be marketed.[59] When Imperial launched myblu in the US in 2018, a spokesperson from Fontem Ventures said that as it was a version of a similar e-cigarette (My VonErl) sold by a company they had acquired a year earlier, it therefore complied with FDA rules. [60] However, Reuters reported that company advertising indicated that the new myblu e-cigarette contained a higher concentration of nicotine than the Von Erl product, at least 40 mg/mL. FDA defines such products with higher concentrations of nicotine as new products, which are therefore subject to FDA review.[60]

As of October 2019, Imperial had not submitted a PMTA for blu, but has said that it intends to do so by May 2020.[61]

Key Markets

Between 2014 and 2017, Imperial’s e-cigarettes were sold in four main markets: US, UK, France and Italy.[4][1]By 2016, Imperial reported that blu was the second largest e-cigarette brand in the US and UK markets.[1][62]

In 2018, Imperial began selling its e-cigarettes Russia, Bulgaria and Canada.[4][5] In 2019, blu went on sale in Spain.[63] After VonErl was rebranded as myblu, it became the bestselling brand in Austria, displacing independent brand nikoBlue.[64] By November 2019 the company reported that myblu was available in 16 markets, although it did not detail which.[6] See below for more on Imperial’s market share.

Marketing Strategies

Marketing strategies used by the industry to promote tobacco products and tobacco use have been banned under Article 13 of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC).[65] They are however being used to promote e-cigarettes, by targeting individuals with promotional material; using product displays and branding at social venues like shopping centres; and offering free samples and taste testing. In 2015, Euromonitor labelled Imperial’s blu as “one of the most marketed vapour product brands in the UK”, referring to the brand’s strong presence on British television and point-of-sales displays in small retailers and supermarkets.[66]

As e-cigarette advertising has become more restricted, in Europe and elsewhere, tobacco companies have become more creative.[67] Since 2015, Imperial (Fontem) has worked with advertising agencies to develop new marketing campaigns for its e-cigarettes, including paid promotional content in magazines. Like other tobacco companies, it is increasingly using social activities (including established music events and pop-ups), and paid influencers, called “brand ambassadors”, to promote its products on social media.[68] Consequently Imperial has also been criticised for targeting young people, an accusation which Imperial denies.[68][69][70]

It has also used campaigns that mimic public health approaches to behaviour change and harm reduction, as detailed below.

Fake Warning Labels (US, 2017)

In 2018 researchers in the US exposed an advertising campaign used ahead of the introduction of new nicotine warning labels on packets. Imperial had run an advertising campaign for blu in popular magazines in 2017, titled “Something Better”, which used fake warning labels.[71] Statements such as ‘IMPORTANT: Vaping blu smells good’, ‘IMPORTANT: contains flavour’ , and ‘IMPORTANT: Less harmful to your wallet’ were printed in boxes next to images of people vaping, mimicked both the proposed nicotine warning labels (now mandatory in the US) and the language of harm reduction.[72] A study conducted by researchers at Ohio State University, using these advertisements, concluded that “Adolescents viewing an advertisement with a fake warning were less likely to recall the advertisement’s actual warning or health risks”.[72] The company was accused of potentially desensitising consumers to the real risks associated with nicotine.[71][73]

“Pledge World” (Global, 2018)

In December 2018, blu created an Instagram site called ‘Pledge World’ containing attractive and inspirational images and encouraging people to “make a pledge” to fulfil a “lifelong ambition” and “#OWNIT.[74] The Instagram page did not make it clear that it was a brand campaign for blu. However, a link in the bio led to the main website, which was identifiable as relating to e-cigarettes.[75]

When it was launched in April 2019 the website urged visitors to make a pledge to make a change:

“This is it. The beginning of a potentially life-changing journey. Tell us your pledge, your dream, your goal; and we could help you #OWNIT. Are you ready?”[75]

Pledging is a known method used to support lasting behaviour change, including in stop smoking services.[76][77]

It is not clear how blu intended to make lasting change in peoples’ lives. It did, however, appear to collect participants’ personal data, including names, addresses, phone numbers and birthdays, as well as Instagram handles.[74]

The last post on the Instagram page appeared to be at the end of May, and the number of followers had reached just under 5,500 (a small figure in terms of Instagram campaigns), by which time the main website stated that it was no longer accepting entries.[78] In October 2019 the UK version of the website simply contained a “coming soon” holding page, and it was not clear if this campaign was still active.[79]

“Blutopia” at Festivals (UK, 2019)

In 2019, Imperial used their contracted advertising agency (MSQ Partners) and a ‘brand experience’ company (Hyperactive) to create “an immersive, hedonistic, vaping nirvana experience” at big summer music festivals in the UK.[80][81][82]

According to Campaign Magazine:

“"Blutopia" is described as an "immersive brand world" where visitors can explore Blu flavours. Guests will be invited into secret multi-sensory flavour rooms that enhance their flavour experiences using sound, light and scents. The rooms will include flavours such as apple and cherry crush.”[83]

Blu’s brand planning manager in the UK, Pete Blackman, said that when people were socialising and smoking outside in the warm weather, the company wanted to “take over those social moments and put Blu in front of mind”.[83]

Promoting the blu ‘club’ (Europe, 2019)

In the UK and Ireland in 2019, a widespread campaign for myblu was launched using billboards, taxis and buses, with graphic images and phrases including “I blu do you?” and “you blu too? who knew?” As well as outdoor advertising, the product was promoted on social media, in pop up shops and at events, with the strategy being to “normalise vaping at social occasions”.[81][82]

Blackman, blu’s brand planning manager, said that the idea was to create the feeling of a club:

“Vaping culture has grown rapidly in the UK, with many vapers considering themselves to almost be in the know on something new and different and as a result, part of a special club…This campaign plays on that idea by creating a unique language and identity that resonates with vapers, while making the club open to everyone looking to switch”[81]

The company also said it had set up ‘partnerships’ with entertainment venues in London to allow vaping.[81][83]

In September 2019, perhaps in response to increasing public and government concern over the use of e-cigarettes by young people (see below), Imperial launched a more information-based marketing campaign in the US. This promoted myblu to “help existing adult smokers understand that they now have a choice about how they consume nicotine”.[84]

Price Promotions

Aggressive price promotions are also used as an incentive for current, or potential, customers, for example coupons enclosed with a product purchased, or discounted products. In 2019, a blu promotion was offering e-cigarette devices for US$1, instead of the usual retail prices of US$19.99.[85] For more background information on e-cigarette promotion and marketing, go to E-cigarettes: Marketing and E-cigarettes: Marketing Rules.

Lobbying Decision Makers for Fewer Restrictions

In 2019, when the safety of e-cigarettes was being widely debated, Imperial said that they to supported e-cigarette regulation.[86] Richard Hill, CEO Fontem Ventures, stated in October: "We’re up for it… we believe that we can demonstrate that our products can operate in the interest of national health."[61] However, in a report published on its website in 2018, the company had stated:

“As vapour products do not contain tobacco, they should be excluded from all existing and future tobacco legislation, including excise”.[87]

Since the first NGP products hit the market, tobacco companies have lobbied for more favourable marketing and tax regulations than cigarettes.[88] Imperial has lobbied decision makers, through Fontem Ventures, in the UK and internationally (including where it does not yet sell its products) to oppose tougher regulations on e-cigarettes. As well as lobbying decision makers directly, it has also lobbied through trade organisations, and contracted public relations (PR) companies including: Instinctif Partners (2018/19, see lobbing section below); Aspect Consulting (2015 and 2017); and FTI Consulting (2015/16)[89][90]

Direct Lobbying

  • New Zealand: Smoking Ban In Cars (2019) - Imperial made a submission to the New Zealand Government’s Health Select Committee in August 2019, over a proposed ban on smoking in cars. Imperial’s Head of Corporate and Legal Affairs, Kirsten Daggar-Nickson, argued that it was not appropriate to include e-cigarettes in the bill, as they don't produce smoke. She said that the company’s e-cigarettes were aimed at "people who have tried absolutely everything and cannot quit", and not at new smokers. However, when challenged by the Committee as to what happens to their business if their existing customers quit (or die), she went on to say that their intention was to "transition them to next-generation products" and therefore switch, rather than quit.[91] Imperial have made it clear to investors that e-cigarettes are ‘additive’ to their business. (See below for more on Imperial’s business strategy)
  • Norway: Consultation on the Implementation of the European Union Tobacco Products Directive (TPD, 2016) - Despite not selling its e-cigarettes in Norway, Imperial (as Fontem) responded to a consultation by the Norwegian Department of Health on the national implementation of the TPD. In its submission, the company asserted that e-cigarettes offered a “huge public health benefit”, and that pharmaceutical-type restrictions will unintentionally make smokers continue to use tobacco, or see them turn to illegal e-cigarettes.[92]
  • Wales: Public Health Bill (2015) - Lobbied the Welsh government against the inclusion of e-cigarettes in existing smoke-free regulations, arguing that it would force vapers to use their e-cigarette in designated smoking areas where they would be exposed to second-hand smoke. It argued that the proposed Bill was based entirely on “precautionary impulse and not scientific evidence”.[93]
  • Australia: Senate Inquiry (2015) - Told an Australian Senate inquiry that “E-cigarettes do not contain tobacco, do not emit smoke and do not involve any combustion. It is therefore unfair and inappropriate to conflate them with tobacco products.[42]

Indirect Lobbying

  • Scotland: Members of Scottish Parliament (2017-2019)

In 2017, public relations company Aspect Consulting, contacted Scottish Members of Parliament (MSPs) to promote the alleged health benefits of e-cigarettes.[96] Although the company disclosed that it acted on behalf of Fontem Ventures, it failed to mention that Fontem was a subsidiary of Imperial Tobacco. Despite lack of conclusive evidence, Aspect Consulting claimed that e-cigarettes acted as a barrier to tobacco use. Imperial lobbyist Lindsay Mennell Keating made multiple approaches to MSPs in 2018, including Richard Lyle, and further meetings were registered in March 2019.[97] All these instances of lobbying were recorded as being in relation to e-cigarettes.

Astroturfing Campaign: European Union's Citizens' Initiative

In February 2019, Imperial funded and promoted a European Union (EU) Commission’s Citizens Initiative campaign, called “Let's demand smarter vaping regulation!”.[98] This aimed to revoke article 20 of the EU Tobacco Products Directive, which relates to the regulation of e-cigarettes”.[99] The European Citizens’ Initiative is a democratic tool meant to benefit individuals, or groups of individuals, with rules in place to exclude companies or organisations.[100] However, one of the sponsors of the ‘smarter vaping regulations’ initiative was Valerio Forconi, Head of EU Corporate Affairs and registered lobbyist for Imperial Tobacco, and Imperial made the initial donation of €10,000 (around GB£8,700) to set up the campaign.[98]

This is a clear example of ‘astroturfing’, a well-known tactic used by the tobacco industry to interfere with tobacco control legislation.[101]

Imperial also set up a website called ‘Vaping is NOT Tobacco’, launched in April 2019, to promote the petition and enable people to sign it direct from the site. It provided forms for visitors to contact their Member of the European Parliament (MEP):[102]

“Don't hesitate to let them know how vaping products improved your life by helping you switch from tobacco. That way, when they deal with the regulation of these products, they will remember your stand on the topic”.[103]

Brandon Mitchener, Managing Partner at Instinctif Partners the PR company contracted by Imperial to set up the campaign, was listed as the only Team Member of the ‘Vaping is NOT Tobacco’ Facebook page.[104][105] Neither the campaign’s Facebook page nor its Twitter bio (@vapeNOTtobacco) declared a link to Instinctif or Imperial.

For more information see our pages on Instinctif Partners and Imperial Tobacco.


Pricing, Profitability and Market Share

In 2016, Imperial indicated that it would seek to get e-cigarette bottom-line profitability mainly via a pricing strategy. Arthur van Benthem, then Fontem Ventures’ CEO, was quoted as saying:

“The average consumer in the UK spends about £2 on his habit on a daily basis, versus £5 on cigarettes. The opportunity for pricing, even with excise coming in, is quite significant.”[1]

Van Benthem also indicated that the company would seek to reduce retailer margins on e-cigarettes and achieve cost reduction through economies of scale and focusing on online sales.

According to Euromonitor , Imperial’s share of the global e-cigarette market (by value) fell from 4.7% in 2015 to 3.2% in 2018.[106][4] Over the same period the market had more than doubled in value from US$6.8 billion to over US$15.6 billion.[107]

Imperial’s share of the US market fell dramatically from 10.7% in 2015, to 4.7% in 2018.[4][108] Like the other international tobacco companies, Imperial lost significant market share in the US to JUUL Labs, whose share rose from 4% to 18.6%.[106]

In the UK market, Euromonitor data shows that, after falling to 1.4% in 2015, Imperial’s share increased to 4.3% in 2018.[4] Tobacco company sales figures, published in investor reports and presentations, tend to be higher than those reported by market research companies. Imperial reported their share of UK sales as 16% in 2016.[109] Similar figures produced by British American Tobacco (BAT) in 2018, put Imperial at the same share (16%), although in second place behind BAT (at 41%). As well as promoting online sales through the blu website, Imperial targeted independent retailers in the UK with training and product information, to help them increase sales.[19][110] Imperial’s UK’s head of NGP sales for blu, Andrew Miller, said in 2018:

“Blu is determined to ensure that independent retailers are fully up to speed with this category. In a crowded marketplace filled with different brands, systems and flavours, many consumers looking to switch to vaping are understandably confused, and look to their local retailers for buying advice”.[110]

2018 figures from Euromonitor put Imperial’s share at 4.6% in France, 3% in Italy, and 2.5% in its new Bulgarian market.[4] It also had 1% of the Russian e-cigarette market, which was dominated by JTI brand Logic.[4][5][111] Sales in Canada were yet to register.[4][5]

In its 2018 annual report, Imperial credited blu with increasing the net revenue from its NGP business “substantially to £200m or 2.6 per cent of tobacco & NGP net revenue”.[5] However investment in blu was having a negative impact on its operating profits, which had fallen by 4.4%.”[5]


Image 3: Imperial’s goal is creating growth and shareholder value (Source: Imperial Brands, ‘Building blu’ presentation, 2018).[19]

E-Cigarettes “Additive” To Tobacco Business

Like British American Tobacco Imperial Tobacco has described e-cigarettes as adding to the company’s revenue, rather than replacing cigarettes.[19][112] Imperial Chief Executive Alison Cooper has stated, on several occasions, that the company's vaping products are an “additive business on top of that of tobacco delivery”.[112][113][114]

Imperial continues to develop tobacco products to appeal to both non-smokers, and those who smoke and vape (‘dual’ or ‘poly’ users). It launched its ‘Riverstone’ brand of rolling tobacco in the UK in October 2018.[115][116] According to Talking Retail, Imperial described it as:

“a high-quality, easy-to-roll blend of tobacco at an affordable price, designed to appeal to new smokers as well as dualists”.[117]

In May 2019, the company reported that Riverstone’s share of the market had grown.[118] The product was relaunched in November 2019, promoted to retailers as the UK’s first ‘combi-pack’ (containing cigarette papers and filters). [117][119]

A New Strategy But Business As Usual

In October 2019, after issuing a profit warning, Imperial announced that Chief Executive Alison Cooper would be stepping down. In November 2019, Imperial announced that it would be changing strategy and “improving growth in NGP with greater discipline and a more tightly focused business model.”[120]

This would involve “developing closer relationships with consumers online” and “an enhanced product and brand refresh ahead of blu 2.0”. [6] Imperial also announced its intention to focus on:

“promoting the right regulatory framework for vapour; one that raises product standards, providing assurance to smokers and better visibility for us on returns”. [6]

Tobacco remains central to Imperial’s business model. The main goals remain maximising growth and delivering returns to shareholders, irrespective of product or any public health gains (see image 3).[19][6]

TobaccoTactics Resources

Relevant Links

Notes

  1. 1.0 1.1 1.2 1.3 A. Van Benthem, Presentation Transcript: Quality Growth- New Consumer Experiences. Imperial Brands Investor Day, 8 June 2016, available from: http://www.imperialbrandsplc.com, accessed April 2017
  2. S. Chapman, A. Landman, C. Shatenstein, et al, The wolf changes its sheepskin, Tobacco Control, 2002; 11(1):9–10, accessed November 2019
  3. M.L. Myers, Philip Morris changes its name, but not its harmful practices, Tobacco Control, 2002; 11(3):169–70
  4. 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 Euromonitor International, Vapour Products: World, accessed September 2019 (behind paywall)
  5. 5.0 5.1 5.2 5.3 5.4 5.5 5.6 Imperial Brands, Something Better: Annual Report and Accounts 2018, undated, accessed November 2019
  6. 6.0 6.1 6.2 6.3 6.4 Imperial Brands, Preliminary Results the Year Ended September 2019, Investor presentation transcript, Imperial Brands website, 5 November 2019, accessed November 2019
  7. Convenience Store Decisions, Dragonite Sells E-Vapor Business To ITG, 21 August 2013, accessed April 2017
  8. K. Gustafsson, Imperial Tobacco Agrees to Acquire Dragonite’s E-Cigarette Unit, Bloomberg Business, 2 September 2013, accessed September 2019
  9. S. Boseley, Hon Lik invented the e-cigarette to quit smoking – but now he’s a dual user, The Guardian, 9 June 2015, accessed October 2019
  10. A. Cooper, Presentation at the Deutsche Bank Global Consumer Conference 2014. Paris, 17 June 2014
  11. Imperial Tobacco, Hon Lik: The Man Who Invented Vaping, Blu website, 23 August 2016, accessed October 2019
  12. N. Fletcher, Imperial Tobacco shares lifted by deal to sell its e-cigarettes in Boots, The Guardian, 21 February 2014, accessed October 2019
  13. M.J. De la Merced, C. Bray, To Compete With Altria, Reynolds American Is Buying Lorillard, The New York Times (behind paywall), 15 July 2014, accessed October 2019
  14. Imperial Tobacco snaps up US brands Salem and Kool in £4bn deal, The Guardian, 15 July 2014, accessed October 2019
  15. Imperial Tobacco, Annual Report and Accounts 2017: Investing for Growth, accessed November 2019
  16. 16.0 16.1 Imperial buys Nerudia, Tobacco Reporter, 2 November 2017, accessed October 2019
  17. Imperial Buys Von Erl and Develops myblu, Electric Tobacconist.co.uk, 20 February 2018, accessed October 2019
  18. 18.0 18.1 Euromonitor International, Imperial Brands: Global Company Profile, 23 July 2018 (behind paywall)
  19. 19.0 19.1 19.2 19.3 19.4 19.5 19.6 19.7 Imperial Brands, Building blu, Investor Presentation, 25 September 2019, accessed October 2019
  20. Imperial Brands buying UK nicotine liquids maker Nerudia, Reuters, 1 November 2017, accessed November 2019
  21. Imperial Brands, Who we are, Nerudia website, undated, accessed October 2019
  22. J. McDonald, Did Cosmic Fog Sell Out to Big Tobacco?, Vaping 360, accessed October 2019
  23. D. Robinson, S. Bond, Imperial fires up e-cigarette legal battle, Financial Times, 10 March 2014, accessed April 2017 (behind paywall)
  24. Schumpeter, A case of the vapers, The Economist, 17 March 2014, accessed October 2019
  25. S. Rosselat, Ventures gives a patent battle to the vape industry, Vaping Post, 5 April 2016, accessed September 2019
  26. 26.0 26.1 M. Bultman, Fontem, Nu Mark End E-Cig Patent Fight With Settlement, "TobaccoToday", 12 January 2017, accessed October 2019
  27. 27.0 27.1 Big Tobacco Reaches Settlement, "Tobacco Asia", 14 March 2017, accessed October 2019
  28. Imperial’s Fontem, Reynolds Settle Vaping-Patent Fights, Bloomberg Law, 2 October 2018, accessed October 2019
  29. M. Chapman, Boots to sell Puritane e-cigarettes from Imperial Tobacco subsidiary, Marketing Magazine 19 February 2014, accessed October 2019
  30. A. Cooper, Preliminary Results 2014 Imperial Tobacco Group PLC, 4 November 2014
  31. Medicines and Healthcare products Regulatory Agency. Email to the Tobacco Control Research Group, Subject: RE:FOI 17/138 Query Re Application of Puritane e-cigarette to obtain medical licence, 19 April 2017 09:06
  32. D. Hedley, What’s Happening in Tobacco – February 2015, Euromonitor International, 4 March 2015 (behind paywall)
  33. Imperial Tobacco, Half Year Results, 6 May 2015
  34. M. Geller, Imperial Tobacco widens e-cigarette strategy with new brand, Reuters, 4 February 2015, accessed October 2019
  35. A. Cooper. Transcript Half Year Results presentation, 6 May 2015
  36. Aspect Consulting, Successful launching JAI in France- Fontem Ventures, 26 January 2015, accessed November 2019
  37. N. Dunand, Fontem Ventures abandonnerait la Jai pour la Blu, VapingPost, 1 February 2016 18:25, accessed October 2019
  38. M. Philips, “Quality Growth: New consumer experiences”, Investor Day presentation, Imperial Tobacco, 8 June 2016
  39. 39.0 39.1 Imperial Brands, blu website, undated, accessed November 2019
  40. Imperial Brands, blu e-liquid flavours, blu UK website, accessed November 2019
  41. J.K. Pepper, K.M. Ribisl, N.T. Brewer, Adolescents' interest in trying flavoured e-cigarettes, Tobacco Control, 2016;25:ii62-ii66
  42. 42.0 42.1 Fontem Ventures, Submission 264: Senate inquiry into measures introduced to restrict personal choice ‘for the individual’s own good’, Australian Parliament website, 2015, accessed October 2019
  43. Food and Drug Administration, Warning Letters and Civil Money Penalties Issued to Retailers for Selling JUUL and Other E-Cigarettes to Minors, FDA Press Release, 9 December 2018, accessed August 2019
  44. Food and Drug Administration, Letters to Manufacturers Regarding Plans to Address Youth Access and Use, FDA website, 12 September 2018, accessed October 2019
  45. Food and Drug Administration, Letter to Fontem Ventures regarding Blu, 12 September 2018, accessed October 2019
  46. 46.0 46.1 46.2 A. La Vito, Blu e-cigarette maker plans to restrict online sales amid FDA crackdown on teen use, CNBC, 13 November 2018, accessed October 2019
  47. J. Torrance, Imperial claims vape rival tempts youngsters, The Telegraph (behind paywall), 12 May 2019, accessed October 2019
  48. Imperial Brands, Fontem Ventures Comments on Potential US FDA Guidance Restricting Flavoured E-Vapour Products, Fontem Ventures website, 12 September 2019, accessed November 2019
  49. Imperial Brands, What is e-liquid, undated, accessed October 2019
  50. E. Cronin, Imperial Tobacco launches myblu e-cigarette, Talking Retail, 6 July 2018, accessed November 2019
  51. Centre for Media and Democracy, Freebase Nicotine, Sourcewatch, 27 September 2017, accessed July 2019
  52. Imperial Brands, myblu liquipods: intense, blu US website, undated, accessed November 2019
  53. Imperial Brands, Introducing Salt of the Earth: New Line of Nicotine Salt E-Liquids, PR Newswire, 12 July 2018, accessed November 2019
  54. Electric Tobacconist, Blu the classic 30ml vape juice, website, undated, accessed November 2019
  55. Arvato, Arvato wins Imperial Tobacco Japan as New Customer, PR Newswire, 22 November 2018, accessed October 2019
  56. Euromonitor International, Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Japan, Country Report, July 2019 (behind paywall)
  57. Imperial Brands, Open Innovation Current Challenges, Nerudia website, undated, accessed October 2019
  58. US Food and Drug Administration, FDA finalizes guidance for premarket tobacco product applications for electronic nicotine delivery systems as part of commitment to continuing a strong oversight of e-cigarettes, press release, 11 June 2019, accessed November 2019
  59. C. Kirkham, Special Report: Juul copycats flood e-cigarette market, despite FDA rule, Reuters, 14 September 2018, accessed July 2018
  60. 60.0 60.1 C. Kirkham, Special Report: Juul copycats flood e-cig market, despite FDA rule, Reuters, 24 September 2019, accessed October 2019
  61. 61.0 61.1 S. Owermohle, E-cig industry fractures over looming laws as Big Tobacco plays the long game, Politico, 17 October 2019, accessed October 2019
  62. Imperial Brands, Annual Report and Accounts 2016, Delivering Against Our Strategy, Imperial Brands website, accessed April 2017
  63. Imperial Brands, blu, blu Spanish website, undated, accessed November 2019
  64. Euromonitor International, Smokeless Tobacco, E-Vapour Products and Heated Tobacco in Austria, Country Report, July 2019 (behind paywall)
  65. World Health Organization, Guidelines for implementation of Article 13 of the WHO Framework Convention on Tobacco Control (Tobacco advertising, promotion and sponsorship), November 2008, accessed November 2019
  66. Euromonitor International. Vapour Products in the United Kingdom. Category Briefing 8 August 2016 (behind paywall)
  67. Committee of Advertising Practice (CAP), Electronic cigarette advertising prohibitions: Advertising Guidance (Non-broadcast and broadcast), February 2017, accessed October 2019
  68. 68.0 68.1 S.Meddings, Interview: Imperial Brands’ Alison Cooper sees light at the end of tobacco road,The Sunday Times, 14 April 2019, accessed April 2019
  69. M. Nedelman, R. Selig, A. Azad, #Juul: How social media hyped nicotine for a new generation, CNN, 19 December 2019, accessed October 2019
  70. Action on Smoking and Health, BAT under investigation by the ASA for promoting e-cigs to young people on social media, ASH blog, 29 April 2019, accessed August 2019
  71. 71.0 71.1 O.A. Wackowski, M.J Lewis, E-cigarette brand mocks tobacco control warning labels, Tobacco Control, 2018, 27:717-718, accessed October 2019
  72. 72.0 72.1 B. Keller-Hamilton, M.E. Roberts, M.D. Slater et al, Adolescent males’ responses to blu’s fake warnings, Tobacco Control, Published Online First: 16 February 2019. doi: 10.1136/tobaccocontrol-2018-054805
  73. M. Wilson, This vape company invented a whole new kind of dark pattern, Fast Company, 20 March 2019, accessed October 2019
  74. 74.0 74.1 A. Newcomb, Behind Instagram-friendly photos, an e-cigarette company collects valuable data, NBC, 27 March 2019, accessed October 2019
  75. 75.0 75.1 Pledge world website, undated, archived 14 April 2019, accessed October 2019
  76. G. Laverack, Making a “Pledge”: Moral Suasion and Health Promotion Practice, Challenges, 26 October 2018, 9: 39
  77. UK Government, Applying behavioural insights to health, Cabinet Office Behavioural Insights Unit, December 2010
  78. Pledge world, website, undated, archived 20 May 2019, accessed October 2019
  79. Pledge World, UK website, undated, accessed October 2019
  80. Blu appoints MSQ Partners & Hyperactive to UK launch of myblu, Marketing Communication News, 4 June 2018, accessed October 2019
  81. 81.0 81.1 81.2 81.3 Blu summer campaign seeks to convert smokers to vapers, Convenience Store, 3 June 2019, accessed October 2019
  82. 82.0 82.1 D. Selwood, Blu kicks off OOH push for MyBlu vape device, The Grocer, 3 June 2019, accessed October 2019
  83. 83.0 83.1 83.2 F. Douglas, Blu creates vaping nirvana experience, Campaign, 14 June 2019, accessed October 2019
  84. E-cigarette leader puts listening to their consumers at the heart of new marketing efforts, blu press release, Bloomberg News, 3 September 2019, accessed October 2019
  85. A. LaVito, https://www.cnbc.com/2019/08/20/juuls-momentum-slips-as-njoy-woos-customers-with-dollar-e-cigarettes.html Juul’s momentum slips and NJOY woos customers with dollar cigarettes], CNBC, 20 Aug 2019, accessed October 2019
  86. Imperial Brands, Fontem Ventures Comments on Potential US FDA Guidance Restricting Flavoured E-Vapour Products, press release, 12 September 2019, accessed October 2019
  87. Imperial Brands, From Tobacco To Something Better: Our Approach to Next Generation Products, undated, archived 30 May 2019, accessed November 2019
  88. S. Peeters, A. Gilmore, Transnational tobacco company interests in smokeless tobacco in Europe: Analysis of internal industry documents and contemporary industry materials, PLoS Medicine, 2013,10(9):1001506
  89. PRCA, Agency and In-House Register September to November 2015, PRCA website, accessed April 2017
  90. PRCA, Agency and In-House Register September to November 2016, PRCA website, accessed April 2017
  91. Z. Small, ‘I’m confused’: MPs question tobacco firm Imperial Brands’ anti-smoking motivation, Newshub.co.nz, 28 August 2019, accessed October 2019
  92. Fontem Ventures, Response to the Norwegian Ministry of Health & Care Service. Consultative Paper on the Implementation of the Tobacco Products Directive (2014/40/EU), accessed April 2017
  93. Fontem Ventures, Public Health (Wales) Bill: Consultation Questions, accessed April 2017
  94. UK Vaping Industry Association, Who We Are, UKVIA website archived page, undated, accessed March 2019
  95. Z. Walker-Cleave, LinkedIn Profile, undated, accessed September 2019
  96. S. Millicheap, Email to MSP [confidential] dated 10 January 2017 16:19, subject: E-Cigarettes, accessed January 2017
  97. Scottish Parliament, Lobbying Register: Imperial Brands, accessed November 2019
  98. 98.0 98.1 European Commission, [1],European Commission,20 February 2019,accessed April 2019
  99. European Union Tobacco Products Directive, Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014, 3 April 2014
  100. K. Jennings, Big Tobacco’s push for Big Vape, "Politico", 26 February 2019, accessed April 2019
  101. S. Ulucanlar, G.J. Fooks, A.B. Gilmore, The Policy Dystopia Model: An Interpretive Analysis of Tobacco Industry Political Activity, PLoS Med, 2016; 13(9): e1002125
  102. Supporters, Vaping is Not Tobacco website, undated, accessed October 2019
  103. Make your voice heard to drive change, Vaping is Not Tobacco website, undated, accessed October 2019
  104. B. Mitchener, Linkedin Profile, undated, accessed October 2019
  105. Vaping is Not Tobacco (@VapingIsNOTtobacco) About:Team Members, Facebook page, undated, accessed October 2019
  106. 106.0 106.1 Euromonitor International, Vapour Products: World, accessed September 2019 (behind paywall)
  107. Euromonitor International: UK e-cigarette market value, 2014-2018, accessed September 2019 (behind paywall)
  108. Euromonitor International, Smokeless Tobacco, E-Vapour Products and Heated Tobacco in the United Kingdom, Country Report, July 2019 (behind paywall)
  109. Imperial Tobacco, Annual Report and Accounts 2016, Delivering Against Our Strategy, undated, accessed November 2019
  110. 110.0 110.1 A. Yau, Vaping: Beyond the big brands, Betterretainling.com, 12 December 2018, accessed October 2019
  111. Euromonitor International, Smokeless Tobacco Products, E-Vapour Products and Heated Tobacco in Russia, Country Report, 9 July 2019 (behind paywall)
  112. 112.0 112.1 M. Chapman, How vaping has REVERSED the fall in nicotine use and tobacco giants are cashing in on the surprising trend, Financial Mail on Sunday, 20 July 2019, accessed August 2019
  113. Imperial Brands, Tobacco Maximisation: Webinar Transcript, 2 July 2018, accessed November 2019
  114. Imperial Brands, Tobacco Maximisation: Q&A Transcript, 2 July 2018, accessed November 2019
  115. J. Wood, product news: Imperial Tobacco launches RYO brand, Forecourt Trader, 14 September 2018, accessed November 2019
  116. E. Cronin, Imperial Tobacco unveils Riverside brand, Talking Retail, 14 September 2018, accessed November 2019
  117. 117.0 117.1 D. Shrimpton, Imperial adds combi pouch format to Riverstone RYO range, Talking Retail, 12 November 2019, accessed November 2019
  118. Imperial Brands, Interim Results for the Six Months Ended 31 March 2019, 8 May 2019, accessed November 2019
  119. Imperial Tobacco launches Riverstone combi pouch, Convenience Store, 11 November 2019, accessed November 2019
  120. Imperial Brands, Preliminary Results for the Year Ended September 2019, Imperial Brands website, 5 November 2019, accessed November 2019