Currently, Japan Tobacco is not only engaged in the production and sale of traditional tobacco products but also dedicated to cultivating new tobacco products such as heated tobacco sticks, electronic cigarettes, and nicotine pouches.
Japan Tobacco’s subsidiary, JT International, has been actively expanding into the tobacco market in the United Kingdom in recent years. JT International has introduced the Ploom X heated tobacco stick in London, an upgraded version of the Ploom S. The company has also launched the Nordic Spirit nicotine pouch in the UK.
Japan Tobacco has signed a joint venture agreement with the Otsuka Group to focus on selling heated tobacco devices and the “Winston” brand of heated tobacco sticks in the United States. According to a report by Nikkei Asia, Japan Tobacco plans to obtain product approval from the U.S. Food and Drug Administration (FDA) for market entry by early 2025. Japan Tobacco and the Otsuka Group have also signed a long-term memorandum of understanding to explore various commercial opportunities for new tobacco products in global markets.
Masamichi Terahata, President, and CEO of Japan Tobacco, expressed high expectations for new tobacco products. He stated, “We are continuously making breakthroughs in the field of new tobacco products. The market share of Ploom X is steadily increasing in Japan, and we have also introduced Ploom X in markets such as the UK. We have realigned the tobacco business structure and strengthened our business foundation and operational capabilities through various measures. In addition to Ploom X, we will introduce more new products in the market. Heated tobacco products are the focus of investment in our new tobacco product business plan from 2023 to 2025. We aim to capture approximately 15% of the market share in major heated tobacco markets globally, which is a crucial guarantee for Japan Tobacco to achieve the balance between revenue and expenditure for new tobacco products by 2028. Our substantial investments in heated tobacco will lay the foundation for Japan Tobacco’s future profit growth.”
Japan Tobacco sees increased investment in new tobacco products as a crucial pathway to achieving future profit growth. The scale of Japan Tobacco’s investment in this field is significant. According to Nikkei Asia, Japan Tobacco plans to invest $2.25 billion in developing its heated tobacco business, with two-thirds of this investment allocated to marketing activities outside Japan. The company has already launched Ploom X in over ten markets globally, and they plan to introduce heated tobacco products in at least 20 countries and regions by the end of 2024.
Terahata revealed that Japan Tobacco’s plans to expand its overseas heated tobacco business have been hindered by shortages of electronic equipment, meaning they cannot produce enough heated tobacco products. He stated, “Our equipment procurement will gradually return to normal, and heated tobacco production will further increase.”
It is noteworthy that while developing new tobacco product businesses, Japan Tobacco has not neglected its traditional tobacco product business. Reports released by Japan Tobacco show that its combustible tobacco products have maintained stable development in recent years.
