Big Tobacco is not ready to give up on cigarettes just yet. And really, can you blame them? Even though there have been plenty of restrictions placed on cigarettes in recent years—from where you’re allowed to smoke them to how much tax you have to pay when you purchase them—there were more than one billion smokers in the world in 2014, and they spent more than $700 billion on cigarettes in a single year.
That means that Big Tobacco is still raking in the money when it comes to selling cigarettes. E-cigarettes have taken over a small sliver of the total cigarette market—the vaping industry made about $6.1 billion last year—but it’s clear that there are still lots of people addicted to regular cigarettes who are willing to pay good money to buy them day after day.
But even with that being said, you would think that Big Tobacco would, at the very least, be exploring other potential revenue streams right now. More and more studies suggest that smokers should quit as quickly as they possibly can to avoid the health risks that come along with smoking, and there is a push for people to give up smoking that’s taking place in many different countries at the moment.
But Big Tobacco is standing firm, and during a recent shareholders meeting, Philip Morris International executives told those in attendance that they plan to continue selling cigarettes for as long as they can. They are committed to cigarettes, not e-cigarettes, for the foreseeable future and don’t plan on moving away from selling tobacco products anytime soon.
Philip Morris International executives are planning to be a little bit more strategic when it comes to selling cigarettes. For example, they are going to start pushing low-tar cigarettes and slimmer cigarettes, since many people falsely believe that these cigarettes are better for you than regular ones. They expect these products to become best sellers for them in the coming years, and they are fully committed to sticking with regular cigarettes as their main source of income.
But is this a good thing or a bad thing for the vaping industry as a whole? The truth is that it could actually end up being a little bit of both.
How Big Tobacco Could Be Helping the Vaping Industry
“So the same companies that are helping push the vaping industry forward today are ultimately not going to be around when Big Tobacco finally comes around to committing to the idea of pushing vaping products.”
It’s pretty clear that Big Tobacco has kept one eye on the vaping industry over the last few years. They have recognized the growth of the industry, and they have seen how it could potentially threaten some of their profits.
Big Tobacco helped push the FDA to install new regulations on vape shops and manufacturers, and while they have since tried to convince the FDA to relax some of those regulations (how else are they going to get into the vaping game one day?!), the thought is that Big Tobacco wants regulations in place to limit how large the vaping industry can become.
Big Tobacco’s unwavering commitment to regular cigarettes could no doubt hurt them in the long run, though. Because while they are focused on trying to build their brands and get back into the good graces of many smokers, those in the vaping industry are benefiting from it.
Of course, you could argue that Big Tobacco is just waiting patiently in the wings for those studies to be completed before pouncing on the opportunity to get into the vaping game. But they’re going to have to play catch-up once they do regardless of when it happens, and they’re going to have to find a way to develop products that are as good as some of the vaping products on the market today. It could give the vaping industry a decided advantage over Big Tobacco, at least for a short time.
How Big Tobacco Could Be Hurting the Vaping Industry
While the vaping industry might have a head-start on Big Tobacco at this point in time when it comes to the development of products, the fact that Big Tobacco is dragging its feet as far as committing to vaping products might also be hurting the industry immensely.
While Big Tobacco has tried to work to get the FDA to loosen some of its new regulations against the vaping industry, it’s also clearly not all-in on the idea of e-cigarettes, e juices, and other vaping products. It still makes up such a small percentage of its product line and annual revenue that Big Tobacco doesn’t have much incentive to push for the FDA to loosen its regulations even more.
The fact that those regulations even exist is also problematic for the vaping industry. In the coming months and years, there are going to be many vape shops and manufacturers that are forced to shut down shop as a result of the extensive testing that the FDA will require for all products.
This testing could end up costing hundreds of thousands of dollars and, in some cases, even millions of dollars. So the same companies that are helping push the vaping industry forward today are ultimately not going to be around when Big Tobacco finally comes around to committing to the idea of pushing vaping products. In that way, Big Tobacco could be hurting the vaping industry by dragging its feet and putting many vape shops at risk.
What to Watch for From Big Tobacco in the Future
It will be very interesting to see what approach Big Tobacco takes in the future as far as vaping is concerned. If studies start to show that e-cigarettes are a better option for people than regular cigarettes or if they show that using e-cigarettes can help people quit smoking regular cigarettes, Big Tobacco will likely come around to the idea of selling more vaping products. But until then, the tobacco industry is probably going to stick to selling what it sells best—cigarettes. It might not necessarily be what’s best for people or for the vaping industry, but Big Tobacco is not ready to try and change its stripes just yet.