Building a range of high quality products
We are investing significant time, funds and resources into developing a sustainable pipeline of high-quality Next Generation Products that meet the needs of our consumers.
There is huge potential in Next Generation Products, and we are confident that they can deliver a substantial and sustainable commercial return over the long term.
We are proud of the considerable progress we have made in building our range across product categories, expanding to new markets and moving into retail. They underline our commitment to the category and demonstrate the successful evolution of our business.
Our Vype brand was first launched in the UK in 2013 and has grown market share since then. We have used the experience we have gained and our consumer insights to develop the range with new devices, such as the ePen, eTank and eBox. By the end of 2016, our Vype range was available across other markets including, France, Germany, Italy, Poland, Colombia, Guatemala, Kuwait, Bahrain and the Philippines.
In December 2016 we launched a new and unique type of Vapour Product – Vype Pebble – and opened our first Vype-branded store, which is located in Milan, Italy.
In the next year, we plan to launch our new Vype platform using a radical new vaping technology developed in partnership with an external inventor.
With our 2015 acquisition of the CHIC Group, a leading Vapour Product business in Poland, we have gained access to Europe’s largest Vapour Product retailing network, as well as important new manufacturing and R&D capabilities. Our commitment to the category was again demonstrated in April 2016 when we acquired Ten Motives, a UK based e-cigarette business.
We launched our first Tobacco Heating Product, iFuse, in Romania in 2015. This electronic device heats a nicotine-containing liquid into an inhalable vapour, which then passes through a tobacco section, releasing tobacco flavour to the consumer.
We also continue to work on other types of Tobacco Heating Products and in November 2016 announced the launch of glo in Japan. This new product heats rather than burns tobacco to release a vapour with a taste similar to that of a conventional cigarette, but with around 90% less toxicants*. glo developed following an extensive R&D programme that brought together more than 100 professionals, including world-leading industrial designers, micro-engineers and manufacturers, across five continents.
In 2014, we became the first tobacco company to have a nicotine inhalation product – Voke – licensed as a medicine. However, at the beginning of 2017 we announced that our main focus and priority in the rapidly evolving NGP category would be on Vapour and Tobacco Heating Products. As a result, we assigned all rights to the Voke brand and transferred all product and manufacturing-related intellectual property to Kind Consumer, the company we originally licenced the Voke technology from. Under this new agreement, Kind Consumer will be fully responsible for Voke’s future development.
Through our R&D programme, we continue to work on an innovations pipeline of high quality products for the future, as well as looking for opportunities to collaborate and enhance our Next Generation Products business globally.
In 2015, we signed a new agreement with the RJ Reynolds Tobacco Company to collaborate and share technology around Vapour Products.
We are making great progress, but this is just the beginning. We have more products and market launches in the pipeline, as well as the commitment, ambition and capabilities to lead in Next Generation Products.
* This is a comparison between the smoke from combusted tobacco in a standard 3R4F reference cigarette (approximately 9mg tar), and the vapour from heated tobacco in glo, in terms of the nine types of harmful components which the World Health Organisation recommends to reduce.