Philip Morris International CEO on going smoke-free & becoming a tech company
Phillip Morris International doesn’t want people to smoke its cigarettes any more. That’s the underlying message that the Marlboro manufacturer aims to relay going forward - and one that it’s chief executive, Andre Calantzopoulos, believes in.
iqos smoke free smoking tech from Philip Morris Int.
When he sits down to speak to The Drum in Cannes, he does so while holding one of the company’s new products: a branded smoke-free heated tobacco unit, branded Iqos, that it plans will help take the company into the future.
“The whole purpose is for those who cannot quit but want to quit, to offer them an alternative. But just offering an alternative and putting it on the market, I'm convinced will not work,” states Andre Calantzopoulos of the e-cigarette strategy. “You need to put in the effort with people to tell them that cigarettes are the worst way of tasting nicotine and they have to move on to a better form if they cannot stop. It is a big initiative because this is not just about people what smoke. It is about the regulators that create the environment.”
Calantzopoulos comes across as a very straight-talking individual, who is adamant in his view that for the good of the company and the health of its customers, around a third of its must be converted from smoking within the next decade.
He suggests that marketing and communications are vital to the success of switching smokers, but adds that the tough restrictions placed on advertising by many parts of the world, such as the UK, make it very difficult to get the message across.
“If you cannot explain it, the task is very complicated. People use products that can freely communicate their benefits. If unable to do that, then it becomes very muddled.” He adds that one-to-one coaching is limited in its effect, potentially converting 30 or 40 people a year each when the company aims to convert millions away from smoking.
“This is impossible, so that is why we need governments to help,” he states.
“At the end of the day, the effort that you produce to switch is not dissimilar to what you produce to start a diet or to start exercising. You need to do three weeks but then, as you create an ecosystem around people, you can do other things around better life, less risky behaviours, or different advice. Although it's not immediate, you can do it very well. That is not dependent only of selling nicotine.”
PMI is still best known for its most famous brand, Marlboro, which despite the restrictions around the promotion of smoking globally, is still considered one of the most recognizable advertisers in history, partially thanks for its ‘Marlboro Man’ mascot. So why develop a whole new brand for the new product?
"Many users of these products say, 'I don't want to hear anything about cigarettes, and if there was a cigarette brand within vaping, I would never use it,’" he says. “We haven't used the name of Marlboro on this product, because we know that if people are to make the break from smoking you don't want them to be reminded of cigarettes all the time, as they have a tendency to be fall back onto them if reminded. Also, we would be accused of promoting Marlboro through an indirect way and people in public health who know about harm reduction delivered through the new products wouldn't want to use the Marlboro name in their speeches - they would be promoting a cigarette brand- so there was a wide number of reasons why we had to create a new brand.
"What is going to happen in the long term? If Iqos becomes the next Marlboro, why not? I hope so.”
More and more brands are adopting social purpose and creating a positive impact for the world, in order to create empathy with consumers. Cessation by PMI is probably one of the most unlikely causes to have been championed however, but Calantzopoulos believes that brand purpose starts with the CEO in order to succeed.
“If the chief executive doesn’t believe in the product, then no one else will. It happens, but then you are a dichotomized organization – from the top-down, you must be very clear of what you are trying to achieve. I was very clear and the management team is very clear: we are in the business of moving out of cigarettes and into this product. That’s it, let’s get it done. If you are ambiguous, people will sit on the sidelines because this is much more complicated for them out there than selling cigarettes.”
Despite easy cynicism that Calantzopoulos truly does want to reverse-engineer decades of billions spent on advertising smoking, he is clearly focused on this message, which has gained attention. And with the new brand, he isn’t ruling out PMI being named as a tech company of the future.
“Partially, yes,” he responds when asked just that. Another surprising admission for a company moving against its own history.