“Photography is truth. The cinema is truth twenty-four times per second.” - Jean-Luc Godard
The world’s turmoil can not derail nicotine. While not without challenges, the industry’s magnificent profitability has endured all cycles and hardships. At the same time, despite such durability, industry constituents continue to evolve. Before we get far into the year, let’s take a quick snapshot of each name within the Nicotine Basket:
Philip Morris International
Altria
British American Tobacco
Imperial Brands (and Logista)
Scandinavian Tobacco Group
Haypp Group
Philip Morris International
Frontrunner. Innovator. Top in quality. Those are the statements made in support of the common narrative that Philip Morris International is so far ahead in all respects of its business that no one can catch up. Pointed to is the smoke-free portion of its revenue base, which measured just under 38% in 2024 and is expected to be roughly 41% for FY’25.
This deserves to be stepped back from and thought about in more detail. Yes, the company’s IQOS continues to dominate the premium space of HTP. Competition has directly stated that they will challenge that position this year, but this is not the first time they have made such a claim. At the same time, mounting evidence suggests that ZYN will struggle to remain dominant in the United States. Not everything can go up and to the right, uninterrupted, indefinitely.
The company’s path has not been without missteps. For decisive proof, all one must do is look at the black-box money pit that was Vectura. £1.1 billion to acquire, then sold for £150 million a few short years later, with the Wellness & Healthcare segment tucked back into the rest of the business. Catastrophic? Certainly not. But it is a reminder of where the company’s core competencies are.