Philip Morris shifts focus to smokeless products, earmarks $16B for investment

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Philip Morris shifts focus to smokeless products, earmarks $16B for investment
Credit: © Reuters.

Philip Morris International Inc (NYSE: PM )., the company behind the Marlboro brand, has announced plans to invest $16 billion in smokeless products such as Zyn pouches and the IQOS device. The strategy is part of a broader aim for cigarettes to account for less than a third of its total revenue by 2030.

The company disclosed this week that it anticipates a 9% to 11% earnings growth from 2024 through 2026, bolstered by an expected 50% surge in US Zyn shipment volumes. However, due to volatile currency movements, Philip Morris predicts that its third-quarter profit may settle at the lower end of its forecast.

In line with its strategy to diversify its product portfolio, the company also revealed plans to introduce the IQOS device in the US market in 2024. This move underscores Philip Morris's commitment to transforming its business model and reducing its dependence on traditional cigarette sales.

Despite the ambitious growth projections and strategic investments, Philip Morris's financial performance remains susceptible to currency fluctuations. This serves as a reminder of the various external factors that can influence the profitability of multinational corporations.

The shift towards smokeless products is reflective of a broader trend in the tobacco industry, with companies seeking to adapt to changing consumer preferences and tighter regulatory environments. With this significant investment, Philip Morris signals its intent to be at the forefront of this industry transformation.

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