Altria brings IQOS heated tobacco product to U.S.

Published October 30, 2019 by Richard Foster

In the wake of their aborted reunion, Henrico County-based Altria Group Inc. embarked on a new venture with spinoff company Philip Morris International Inc. to introduce its IQOS heated tobacco products for sale in the U.S. market.

“After much deliberation, the companies have agreed to focus on launching IQOS in the United States as part of their mutual interest to achieve a smoke-free future,” Philip Morris International CEO André Calantzopoulos said in a late September announcement acknowledging that merger talks had ended between the two companies.

The companies launched IQOS for U.S. sale in early October out of a mall storefront in Atlanta, where they are test-marketing the device. IQOS, which heats tobacco into an aerosol, produces “fewer or lower levels of some toxins than combustible cigarettes,” according to the Food and Drug Administration, which approved it for sale in the United States in April.

Popular in Russia and Japan, IQOS was introduced by Philip Morris International in 2014. Available in 48 overseas markets, it has about 8 million users.

IQOS’ introduction into the U.S. comes amid uproar over an epidemic of teen use of vaping products that has largely been blamed on San Francisco-based Juul Labs Inc., a company in which Altria holds a 35% stake. In September, Juul Labs CEO Kevin Burns stepped down and was replaced by K.C. Crosthwaite, Altria Group’s former chief growth officer.

There has also been a wave of mysterious lung ailments partly linked to vaping THC via bootleg devices that by mid-October had resulted in 33 deaths in 24 states (including Virginia) and nearly 1,500 illnesses nationwide, with many occurring among teens and young adults.

In a statement, Philip Morris International noted that global data, based on four years of international sales, demonstrates that IQOS is “not significantly appealing to youth or to nonsmokers.” Unlike Juul’s marketing practices, Altria says it has no plans to sell IQOS online or advertise it via social media influencers. Also, it’s only available in tobacco flavor and two menthol flavors.

A longtime Fortune 500 company listed among the S&P 500, Altria is the parent company of Richmond-based tobacco products manufacturer Philip Morris USA, best known for its Marlboro cigarettes brand.

Altria spun off Philip Morris International in 2008. Based in New York, it is also a Fortune 500 company and manufactures Marlboro cigarettes and other tobacco products and brands for sale in more than 180 nations outside the United States.