Two top years in review: Top 10 news in the global new tobacco industry in 2024

Two top years in review: Top 10 news in the global new tobacco industry in 2024

As the world's leading new tobacco industry media and think tank, 2Firsts summarizes and releases the top ten news events that will have a profound impact on the global new tobacco industry in 2024.
Note:

[1] The top ten annual news are independently selected and interpreted by 2Firsts;

[2] The names of companies, brands, and products mentioned in this article are only used for industry analysis and are not intended as any promotion or investment advice;

At the 2025 New Tobacco Global Compliance Development New Year Seminar, 2Firsts CEO Zhao Tong announced the top ten news events in the global new tobacco industry in 2024, comprehensively reviewed the key events that have profoundly affected the industry in the past year, and focused on industry changes and development trends.

2Firsts CEO Zhao Tong | Source: 2Firsts

At the same time, the editors of the 2Firsts editorial team interpreted the top ten news one by one, providing all-round professional perspectives and insights for the participants.

2Firsts Editorial Team | Source: Two Firsts

In 2024, the global new tobacco industry is undergoing a profound reshaping driven by stricter regulation and technological innovation. Every policy and every technological breakthrough are leaving a profound footnote for this year. As the world's leading new tobacco industry media and think tank, Two Firsts summarizes and releases the top ten news events that will have a far-reaching impact on the global new tobacco industry in 2024.

The US e-cigarette regulatory actions are frequent, and the market will usher in huge changes

The first non-tobacco flavor passed PMTA, and the product listing ushered in a major breakthrough

In June 2024, the US Food and Drug Administration (FDA) approved the pre-market tobacco product application (PMTA) of four NJOY menthol e-cigarette products, which marked that non-tobacco flavored e-cigarettes were officially approved by the FDA.

Law enforcement efforts continue to increase

In June 2024, the FDA, the Department of Justice (DOJ), the Customs and Border Protection (CBP) and other agencies established a working group to combat the illegal distribution and sale of e-cigarettes.

In 2024, CBP's Chicago office alone conducted a total of 121 seizures and seized more than 3.2 million illegal e-cigarette products with a total value of more than $81.5 million.

The FDA uses warning letters, civil penalty complaints, tobacco sales ban complaints, import alerts, seizures, bans and criminal prosecutions to conduct "full-chain" supervision and law enforcement on retailers, manufacturers, importers and distributors of illegal e-cigarettes.

Political forces take action to crack down on illegal e-cigarette products

On December 4, U.S. House of Representatives member Raja Krishnamoorthi announced that he had officially launched an investigation into illegal e-cigarette imports and sent investigation letters to five Chinese manufacturers and six U.S. wholesalers and distributors. This marks the intervention of political forces in the crackdown on illegal e-cigarettes.

The U.S. market will usher in a huge change

At least three forces are driving the crackdown on illegal e-cigarettes, including administrative law enforcement departments such as the FDA, political forces and international tobacco companies. Their determination and goal is to change the current situation of illegal e-cigarettes in the US market. In 2025, the US e-cigarette market is expected to usher in huge changes.

Many European countries announced a ban on disposable e-cigarettes: product dividends may encounter a critical turning point

Since 2021, disposable e-cigarette products have swept the world, profoundly changing the global e-cigarette industry chain, and have undergone tremendous changes in supply chain, channels, and consumption. The popularity of disposable e-cigarettes has greatly increased the consumption penetration rate of e-cigarettes and promoted more tobacco consumers to try e-cigarettes; but on the other hand, the huge problems of disposable products in environmental protection and youth impact have also been deeply concerned by governments.

On January 29, 2024, the British government stated that it would ban the sale of disposable e-cigarettes; in October of the same year, it was reconfirmed that the sale of disposable e-cigarettes would be banned throughout the UK from June 1, 2025 to cope with the soaring rate of youth use and increasingly prominent environmental problems. Prior to this, many European countries such as France and Belgium have also announced or are promoting legislation to ban disposable e-cigarettes.

• France: In February 2024, the Senate passed a bill to ban the "production, sale, distribution or free provision" of disposable e-cigarettes. Violators may be fined up to 100,000 euros.

• Belgium: In March 2024, the European Commission announced its support for Belgium's bill to ban the sale of disposable e-cigarettes. As the first country in the EU to ban the sale of disposable e-cigarettes, the ban will take effect in January 2025.

• Poland: The ban was originally planned to be implemented before the summer vacation, but the legislative progress was postponed to early 2025.

• Germany: The Federal Ministry of the Environment (BMUV) promoted the formulation of restrictive regulations on disposable e-cigarettes throughout the EU in October 2024; in December 2024, most federal state representatives supported the amendment of the Electrical and Electronic Equipment Act (ElektroG) to further restrict the use of disposable e-cigarettes.

• Ireland: Since March 2024, multiple rounds of legislative discussions on disposable e-cigarettes have been launched. By September, the cabinet approved the draft legislation to ban disposable e-cigarettes.

• Spain: In October 2024, it was announced that the Royal Decree 579/2017 will be revised, which includes relevant provisions for banning disposable e-cigarettes and their flavorings.

Disposable e-cigarettes are gradually moving from "explosive products" to strict supervision, and product development has entered a new turning point.

Australia and China cooperate to combat illegal e-cigarettes: innovative exploration of the global e-cigarette illegal trade governance model

Australia is the first country in the world to implement "e-cigarette prescriptions". Strict sales and purchase restrictions have made Australia face severe challenges in the illegal e-cigarette trade. Entering 2024, Australia continues to strengthen its supervision of e-cigarettes. It is particularly noteworthy that Australia has started cooperation with China in the field of combating illegal e-cigarettes.

On May 6, 2024, Australian Border Force Deputy Director Fitzgerald went to Beijing to meet with Zhang Jianmin, Director of the State Tobacco Monopoly Administration.

From June 15 to 18, 2024, Chinese Premier Li Qiang paid an official visit to Australia. The two countries issued the "Joint Outcome Statement of the Annual Meeting between the Chinese and Australian Prime Ministers", in which "strengthening cooperation to combat illegal tobacco and e-cigarette smuggling" was written.

On July 30, 2024, Dai Ailun, Director of the Australian Illegal Tobacco and E-cigarette Administration, went to Beijing to meet with Wang Gongcheng, Deputy Director of the State Tobacco Monopoly Administration in charge of international business.

In just half a year, the two governments and regulators held several high-level talks on combating illegal e-cigarettes.

Due to the complex communication links and easy concealment of products, the illegal e-cigarette trade has led to multiple difficulties for countries to combat it. The e-cigarette regulatory cooperation initiated by Australia and China is an innovation and exploration in the global fight against illegal e-cigarette trade, which has brought new ideas to the e-cigarette regulation of other countries and promoted the strengthening of global e-cigarette regulatory cooperation.

Southeast Asia's e-cigarette regulatory policies are tightened: the compliance threshold of emerging markets has been raised again

Southeast Asia has become an important destination for China's e-cigarette exports due to its geographical advantages. In 2024, Malaysia, the Philippines, Indonesia and other countries have strengthened their supervision of e-cigarettes. Contrary to the outside world's expectations that the policy would be relaxed, Vietnam and Thailand further clarified the ban on e-cigarettes in the same year.

Malaysia: In June 2024, the Public Health Tobacco Control Products Act 2024 (Act 852) was promulgated, prohibiting the sale of cigarettes in educational institutions, online sales markets and other places, and imposing new requirements for the registration and packaging of smoking products. Local states also have legislative power, such as Johor, which has banned the sale of e-cigarettes in commercial places since 2016.

Philippines: This year, multiple rounds of multiple operations were launched to crack down on illegal e-cigarettes. In February 2024, the Philippine Customs Intelligence and Investigation Bureau seized a batch of Flava brand e-cigarette products worth US$70 million. Starting with this incident, the Philippines launched a months-long rectification operation. In addition to cracking down on illegal e-cigarettes, the Philippines launched a strict product certification procedure (PS Licenses), and only certified products can be legally sold.

Vietnam: In November 2024, a resolution was promulgated to ban the production, trading, import, storage, transportation and use of e-cigarettes and heated tobacco products from 2025.

Indonesia: According to Government Regulation No. 28 of 2024, tobacco packaging must display health warnings more prominently, and the sale of e-cigarettes is prohibited within 200 meters of educational institutions and children's playgrounds.

Thailand: In December 2024, the chairman of the Special Committee on E-cigarette Legislation and Regulation of Thailand suggested that e-cigarettes and heated tobacco products be considered illegal, and proposed to formulate new laws to completely ban e-cigarettes, covering their production, import, sales, advertising, marketing, possession and use.

The new tobacco business of the four major tobacco giants has generally grown: the transition to "smoke-free" has become the main theme of the four major tobaccos

The 2024 semi-annual report of the four major international tobacco giants (Philip Morris International, British American Tobacco, Japan Tobacco, and Imperial Tobacco) shows that the new tobacco business represented by heated tobacco, e-cigarettes, and nicotine bags has achieved new growth. As the leaders of the global tobacco market, the investment and development of the four major tobacco giants in new tobacco not only demonstrates their determination to transform to "smoke-free", but also indicates that the global tobacco market will further accelerate the process of transformation from traditional cigarettes to new tobacco.

Philip Morris International (PMI): Strong performance in the first half of 2024, with net income of $18.261 billion and operating profit of $6.489 billion, up 22.5% from the same period in 2023. This growth is attributed to strong shipments and the continued success of smokeless products, which have now become an important part of PMI's revenue. Heated tobacco product shipments were 68.678 billion units, and canned oral products totaled 486 million cans, up 31.2% from the same period in 2023. Canned oral products were mainly driven by the growth of ZYN nicotine pouches in the United States, with shipments in the United States reaching 135.1 million cans, up 50.3% from last year.

British American Tobacco (BAT): Revenue in the first half of 2024 was 12.34 billion pounds, down 8.2% from the same period in 2023; operating profit was 4.258 billion pounds, down 28.3% year-on-year, and new tobacco accounted for nearly 18% of revenue, up 1.4% from fiscal 2023. The number of smoke-free brand consumers reached 26.4 million.

Japan Tobacco (JT): Japan Tobacco's operating income in the first half of 2024 was 1569.9 billion yen (about 10.6 billion US dollars), a year-on-year increase of 12.7%; net profit was 305.2 billion yen (about 2.05 billion US dollars), a year-on-year increase of 6.3%. Total sales volume increased by 2.0% year-on-year, of which combustible products increased by 1.7% and heat-not-burn products (RRP) increased by 25.5%. In the Japanese market, sales of heated tobacco products Ploom increased by 36%, and sales have steadily increased in 21 markets around the world.

Imperial Brands (IMB): Imperial Brands reported that the company achieved revenue of 15.1 billion pounds in the first half of the year, a year-on-year decrease of 2.3%; adjusted operating profit increased by 2.8% to 1.67 billion pounds at a constant exchange rate. Sales of its new tobacco products (NGP) brands (including Pulze heated tobacco and Blu e-cigarettes) increased by 16.8%. In major European markets, including Central and Eastern Europe, NGP products account for about 7% of total tobacco and NGP net revenue. Europe's NGP revenue grew 24%, driven by success in markets such as Italy, Greece and Portugal, where NGP accounted for more than a quarter of total tobacco and NGP net revenue.

E-cigarette supply chain debt crisis: industry reshuffle is accelerating

China is the global e-cigarette supply chain center. China's e-cigarette supply chain provides more than 90% of the world's e-cigarette manufacturing. After nearly five years of rapid growth, China's e-cigarette supply chain has entered a "consolidation period". Driven by fierce competition on the brand and market sides, supply chain companies have gradually differentiated, with a few leading companies gaining major industry shares, while long-tail small and medium-sized companies have insufficient orders, cash flow shortages, and debt crises and even bankruptcy events. The entire supply chain presents a situation of overcapacity and declining profits.

In 2025, Chinese e-cigarette supply chain companies will face the e-cigarette business license renewal procedure, which will be a "test" for corporate operations, and industry reshuffles and restructuring may accelerate. Industrial restructuring may bring pain to some companies' exit, but if we can use this as an opportunity to upgrade the entire Chinese supply chain, we are expected to get rid of the "involutionary competition" in recent years and achieve high-quality development of the industry towards innovation and compliance.

Just: announced self-liquidation in June, applied to the court for bankruptcy reorganization in August, and issued a notice to recruit reorganization investors in December.

Wuke Technology: Suspended production and closed down in July and entered bankruptcy procedures.

Max: Employee representatives applied for bankruptcy liquidation in September, and the court announced in December that it had entered the formal bankruptcy liquidation procedure.

China Tobacco Hong Kong exhibited more than 100 products: "Chinese heated cigarettes" are accelerating overseas

In September 2024, one of the world's largest tobacco exhibitions, the Dortmund Tobacco Exhibition (InterTabac) in Germany, officially opened. As the only listed company in the Chinese tobacco system with tobacco as its main business and the exclusive export platform for new tobacco business, China Tobacco International (Hong Kong) Co., Ltd. (hereinafter referred to as "China Tobacco Hong Kong") organized a 66-person curatorial team including 13 industrial companies of China Tobacco, and exhibited 25 brands, more than 100 heated tobacco specifications and 30 cigar products, setting a new record for China Tobacco's overseas exhibitions.

For the first time, China Tobacco Hong Kong exhibited "tea-based heated tobacco products" and natural smoke technology products independently developed by China Tobacco. However, by coating nicotine to achieve a "low-harm" smoking experience, it caters to the differentiated needs of consumers.

In terms of market performance, the COO brand under China Tobacco Hong Kong has ranked fourth among international brands in the Czech market, and has also gained significant market share in the Philippines and other places, competing with international brands on the same stage.

From Chinese cigarettes to Chinese heated cigarettes, China Tobacco's active development in the international market will help further enhance its international competitiveness. At the same time, the research and development and listing of Chinese heated cigarettes led by China Tobacco will also promote the innovation and development of China's new tobacco supply chain.

IQOS's 10th anniversary: ​​the global heated tobacco market has been initially established and will usher in an explosion

2024 is the 10th year that Philip Morris International has launched its heated tobacco product IQOS. The emergence of IQOS is of epoch-making significance, and it has created a new future possibility for the century-old tobacco industry. With its firm "smoke-free future" strategic support, and with its strong technical, brand, market and other advantages and resources, IQOS has always firmly occupied the top position of global heated tobacco and led the development of the industry. At present, IQOS has covered more than 70 countries and regions, with a total of more than 30 million users.

Compared with e-cigarettes, heated tobacco is a brand and market that international tobacco companies are more familiar with and more fond of. Stimulated by the rapid development of IQOS, major international tobacco companies have also accelerated the research and development and listing of heated tobacco products.

With the settlement agreement reached with British American Tobacco, IQOS will enter the US market in a big way in 2025, and major international tobacco companies will further accelerate compliance declaration and listing. Heated tobacco products are expected to explode in 2025.

International tobacco companies, China Tobacco, Chinese heated tobacco supply chain companies, and leading e-cigarette brand companies

It is the main force driving the development of heated tobacco worldwide.

In December 2024, British American Tobacco (BAT) piloted the release of the heat-not-burn device Glo Hilo and its high-end model Glo Hilo Plus in Serbia. BAT said that it is lighter than its competitor IQOS Iluma Prime and provides the simplest and most elegant consumer experience to date. And Smoore, a Chinese new tobacco head R&D and OEM company that is rumored to be the OEM factory of Glo Hilo, has also attracted much attention in the capital market.

Although Japan Tobacco (JT) did not release a new heated tobacco device in 2024, it plans to expand the market scope of Ploom X to more than 40 countries by 2026, and expects that by 2035, the sales of heated tobacco products will exceed traditional cigarettes. To achieve this goal, JT will continue to increase investment in the Ploom series of products.

In December 2024, Altria launched sales of the heat-not-burn device SWIC in the UK. The device is said to use HeatGrid heating technology and is the first device of its kind to use tobacco-filled capsules instead of cigarette rods. It can only be used with KETLE capsules. Altria calls SWIC "the future of heated tobacco."

In September 2024, FirstUnion, a leading R&D and OEM company of new tobacco in China, released Alkaid light heating technology at the InterTabac in Dortmund, Germany. The core of the technology is to use full-band light waves similar to sunlight to achieve fast and uniform heating. The technology can complete preheating within 5 seconds, shortening the waiting time by 75% compared with traditional equipment. The technology was first launched globally through the 2Firsts platform.

At the September Dortmund exhibition in Germany, several global leading e-cigarette companies also released their heated tobacco products.

Nicotine pouches are rising rapidly, and regulatory risks are becoming increasingly prominent

Nicotine pouches are the fastest growing new tobacco category in the world in 2024. According to market forecasts, the global nicotine pouch market size will be approximately US$2.77 billion in 2023, and it is predicted that the market size will reach US$23.6 billion in 2030, with a compound annual growth rate of 35.8% from 2023 to 2030. Nicotine pouches, e-cigarettes and heated tobacco constitute the three major categories of new tobacco products in the world.

Under strong market demand and the strong promotion of international tobacco companies, nicotine pouches have developed rapidly in both the supply chain and the market.

In terms of supply chain, in addition to the traditional supply chains in Europe and India, China's nicotine pouch supply chain has risen rapidly and upgraded. China has formed a full supply chain system from equipment, raw materials, OEM, product development, supporting services, etc., and has become one of the main supply centers for nicotine pouches in the world. International tobacco companies such as Philip Morris International have also invested heavily in building new factories to meet market demand.

In terms of the market, international brands represented by Philip Morris International's ZYN and British American Tobacco's VELO continue to increase their investment in market development. E-cigarette brands have also launched nicotine bag products of the same name or new brands. Market competition is becoming increasingly fierce.

In terms of scientific research, scientists from international tobacco companies and independent research institutions have conducted a lot of research on the safety of nicotine bags.

As the nicotine bag industry rises rapidly, problems such as counterfeit goods, illegal trade, and the inducement of minors have gradually become prominent, attracting the attention of regulators in various countries. Stricter supervision of nicotine bags will appear more and more in 2025.

Multiple adjustable technologies are popular: e-cigarette consumption is moving towards the era of customization

In the second half of 2024, multiple adjustable disposable e-cigarettes will become the main focus of various brands. These products allow consumers to adjust nicotine concentration, taste, sweetness, and ice degree, bringing users a more personalized experience. Many brands have followed up with new products, which is another product innovation trend after the large-screen e-cigarettes in 2023~2024.

From large screens to multiple adjustments, the innovation of e-cigarette products is moving away from gimmicky innovation and moving towards innovation that changes the core consumer experience. Whether consumers accept this innovation will be tested by the market in 2025.

Pillow Talk Ice Control IC40000 released by Dawsons is known as the first disposable e-cigarette with adjustable coolness.
The Adjust series launched by Lost Mary is divided into a variety of products with adjustable coolness, flavor, sweetness and nicotine concentration.
ICE-NIC Control 35K disposable e-cigarette launched by OXBAR in October is known as the first product with dual adjustment functions of nicotine concentration and ice degree.

HQD launched HQD FLEX, which combines the characteristics of "2+10" products and "4-in-1" e-cigarettes, and can adjust sweetness or ice degree while switching product flavors.

Looking back at 2024, the global new tobacco industry is undergoing tremendous changes in supervision, business, product technology and other fields. The global new tobacco industry has never presented such a fierce collision of opportunities and risks as it does today, which especially tests the faith, wisdom and courage of regulators, entrepreneurs, scientific researchers, developers and other practitioners and stakeholders.

Standing at the starting point of 2025, it is difficult to predict a clear picture of the coming year, but high-quality development driven by compliance and innovation should be the bright and right path for the global new tobacco industry.