Rethinking Innovation Within the Tobacco Industry

    Before tobacco businesses can claim to be innovative, they must first broaden their definition and understanding of one of the industry’s favorite—and most misunderstood—words.

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    “We’ll probably see a lot more innovation coming up around the product than in the product,” predicts Justin Tarbell, senior vice president of strategy and business development at Ohserase Manufacturing. “By that I mean you’re going to see packaging innovations, you’re going to see point-of-sales innovations, you’re going to see innovations in consumer engagement.”

    Casa de Montecristo NashvilleBeyond products, tobacco businesses could also shift innovation toward the retailer and consumer experience. To grow sales and their retail footprints, many tobacco companies have created programs to encourage customer loyalty and activity. From Altadis U.S.A.’s Montecristo Social Club that connects consumers to the company, to Davidoff’s Access program that gives consumers access to limited and hard-to-find products, to Drew Estate’s Drew Diplomat program that rewards loyal retail partners and consumers, tobacco businesses are finding new ways to increase demand for their products. Others, like Casa de Montecristo and Rocky Patel, have expanded their luxury smoking lounges to tap into providing consumers with a memorable experience. To get customers to buy into their brands and companies, the tobacco, vapor and alternative industries all now realize that they must create new experiences for their customers in order to bring them closer to their brands and products.Philip Morris iQOS Heat Not Burn

    The New Frontier of Tobacco
    The FDA’s recent issuing of advance notices of proposed rulemaking (ANPRMs) for nicotine levels in combustible tobacco products, premium cigar regulation and flavored tobacco could be another blow to the tobacco industry’s innovation, but it could also be the beginning of a new frontier of business and opportunities.

    Already, there has been innovation in products, with the rise of next-generation devices, like Philip Morris International’s iQOS and British American Tobacco’s Glo heat-not-burn devices. Companies like Juul, Pax and Blu have released and are developing new vapor devices that offer new options to those interested in ditching traditional tobacco. New products from the cannabis category are coming onto the market, ranging from products to keep the flowers fresher for a longer amount of time to products that offer new ways to consume the herb. Opportunities to be innovative abound for the tobacco, vapor and alternative companies today, so much so that Tobacco Business deemed it necessary to devote an issue to the topic and to show you the different ways you can reignite innovation within your company and your brands.

    This story first appeared in the May/June 2018 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.

    – Story by Antoine Reid, an editor and digital content director for Tobacco Business Magazine. You can follow him on Instagram @editor.reid.