18 TOBACCO BUSINESS | SEPTEMBER / OCTOBER | 22 product consumers increased by 2.1 million from December 2021 through June 2022 to a total of 20.4 million. Non-combustibles now represent 14.6 percent of BAT’s group revenue. BAT’s revenue generated by its vapor product, Vuse, was also up during the first half of 2022, by 48 percent. Its heated tobacco product, glo, also saw an increase in revenue, up 44 percent during the first half of the year. Velo, the company’s nicotine pouch product, had revenues up by 37 percent. BAT’s combustibles business was bolstered by what it referred to as robust pricing. Overall, BAT’s combustible revenue was up by 0.6 percent. Philip Morris International (PM) Philip Morris International (PMI) reported a strong performance during the second quarter that exceeded its initial expectations. According to CEO Jacek Olczak, his company’s strong first half of 2022 was due to IQOS momentum, including an increase in IQOS users and heated tobacco unit in-market sales volume. Favorable cigarette category trends were also attributed to the company’s recent positive financial report. During the second quarter of 2022, net revenues from smoke-free products accounted for 29.9 percent of PMI’s total net revenues. Smokefree products made up 30.5 percent of the company’s total net revenues during the first half of 2022. The market share for heated tobacco units in IQOS markets was up by 1.2 percentage points to a total of 7.5 percent. By the end of the second quarter, PMI estimated there were approximately 19 million IQOS users, up by 3.2 million or by 20.5 percent compared to the end of June 2021. “We are raising our outlook for the full year and now expect to deliver pro forma adjusted growth in net revenues of 6 percent to 8 percent, on an organic basis, and diluted EPS of 10 percent to 12 percent, excluding currency, underpinned by pro forma heated tobacco unit shipment volume of 90 [billion] to 92 billion units,” Olczak announced in PMI’s halfyear financial report. PMI expects its purchase of Swedish Match to close during the fourth quarter of 2022. It is not expecting Swedish Match to have any contribution to the company’s operations this year. Swedish Match (SWMA.ST) Swedish Match saw its group sales and operating profit increase during the first half of 2022. This was mostly driven by the continued growth of Swedish Match’s smoke-free and lights segments. Sales for the company’s cigar segment reportedly declined. “Our cigar business has faced operational challenges for some time, and while shipment volumes and the operating profit were well below the prior year second quarter, we are hopeful that we will be able to deliver improvements going forward,” Lars Dahlgren, CEO of Swedish Match, shared in his company’s half-year report. “Our supply chain organization has made good progress in production levels of natural leaf varieties, and though demand in the overall cigar category was notably lower than [the] prior year’s elevated level, we are encouraged by our share gains within the more attractive natural leaf segment, resulting in Swedish Match regaining the No. 2 position in the U.S. mass market cigar category (excluding little cigars), according to [Management Science Associates] data.” Swedish Match’s smoke-free business, driven mostly by ZYN, a nicotine pouch product, saw the greatest gains in the second quarter and overall first half of 2022. The company’s smoke-free category saw double-digit growth in terms of volume in Scandinavia following the introduction of several new nicotine pouch products, including the VOLT brand, developed using patent-pending PEARLS technology. During the secondquarter of 2022, SwedishMatchreportedan increase in operating profit of 2.23 billion Swedish crowns, or $22.47 million. Due to growth experienced in the U.S., Swedish Match’s operating profit was above market expectations during the second quarter of 2022. Vector Group (VGR) Vector Group reported consolidated revenues of $699.2 million during the first half of 2022. This accounts for a 14.9 percent increase, or $90.7 million increase, compared to the prior year. During the first half of 2022, Vector Group saw its tobacco segment revenues increase by 14.3 percent to a total amount of $683.4 million compared to the prior year period. “Vector Group delivered strong tobacco revenue performance in the second quarter as we capitalized on favorable market opportunities to substantially increase value and market share,” commented Howard M. Lorber, president and CEO of Vector Group, in a press release. “Our price-fighting Montego brand is now our largest brand and the thirdlargest discount brand in the United States. This strong performance demonstrates our commitment to optimizing long-term profit through the effective management of volume, pricing and market share growth.” The retail market share of Liggett Group increased to 5.5 percent during the second quarter of 2022, up from the 4.1 percent reported during the second quarter of 2021. For the first half of 2022, Liggett also saw its retail market share increase to 5.3 percent. In 2021, its first half of the year market share was 4.1 percent, according to data provided by Management Science Associates. Vector Group is a holding company for Liggett Vector Brands, Vector Tobacco Inc. and New Valley. It is the fourth-largest cigarette manufacturer in the U.S. The company is the manufacturer of such national cigarette brands as Pyramid, Liggett Select and Eagle 20’s. TB On July 14, 2022, U.S. Tobacco Cooperative, Inc. (USTC) announced that it had successfully emerged from bankruptcy. USTC originally filed for bankruptcy protection in July 2021 in order to meet contractual obligations to its member growers while the company addressed uncertainty presented by the ongoing Lewis class action lawsuit. “Today’s exit from bankruptcy marks the end of more than 17 years of class action lawsuits following the termination of the federal price support program that ran from 1946 to 2005,” said Oscar J. House, CEO of USTC. “Our exit allows us to now focus solely on the services and products our cooperative is known for. I want to thank our customers, employees, suppliers, board of directors and especially our member growers for their continual support throughout the bankruptcy proceedings, which are now officially behind us.” USTC is a grower-owned marketing cooperative based in Raleigh, North Carolina. The cooperative processes U.S. flue-cured tobacco grown by its 500-plus member-growers in North Carolina, Florida, Georgia, South Carolina and Virginia. In addition to processing and selling raw tobacco materials to cigarette manufacturers worldwide, USTC’s subsidiaries include Premier Manufacturing, Wildhorse Distributing, Big South Distribution and King Maker Marketing. USTC also manufactures consumer products for the U.S. market that are sold under the brand names of Wildhorse, 1839, Manitou, Shield 1st Class, Ultra Buy and Traffic. USTC EMERGES FROM BANKRUPTCY
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