tobaccointernational.com
The authority on the tobacco industry since 1886 October/November 2018
A Race to the Future
Ferrari Teams with PMI in a Global Communication Initiative
IMPERIAL BRANDS LOOK TO A FUTURE BASED ON NGP
DESTRUCTIVE HURRICANES THREATEN U.S. LEAF SUPPLY
DODGING FDA’S REGULATORY BULLET ON VAPE PRODUCTS
THE QUEST FOR TESTING HEAT-NOT-BURN PRODUCTS
ZYN IN THE UNITED STATES: BETTER RESULTS THAN EXPECTED
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October/November 2018
TI TABLE OF CONTENTS
A LOCKWOOD PUBLICATION
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tobaccointernational.com
The authority on the tobacco industry since 1886 October/November 2018
A Race to the Future
Ferrari Teams with PMI in a Global Communication Initiative
20
22 IMPERIAL DESTRUCTIVEWHATDODGING FDA’S IS PYXUS? KEYS TO REDUCING BRANDSCHILD LOOK LABOR HURRICANES WHY TOMORROW REGULATORY TO A FUTURE THREATEN U.S. BULLETFOR ON VAPE IN TOBACCO HAS BEGUN BASED ON NGP LEAF SUPPLY ALLIANCE PRODUCTS PRODUCTION, AND ONE WHY IT MATTERS INTERNATIONAL
THE QUESTAMERICAZYN IN SURPRISE: JT THE GROUP ACQUIRES FOR TESTING UNITED STATES: PRODUCES A LARGERAKIJ’S BANGLADESH HEAT-NOT-BURN BETTER RESULTS THAN-EXPECTED TOBACCO BUSINESS PRODUCTS LEAF CROP DESPITETHAN EXPECTED INTENSE HEAT & RAIN
ON THE COVER
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A race to the future: Scuderia Ferrari is partnering with PMI to communicate the companies’ dedication to rigorous science and innovation for a better future.
FEATURES 14 Imperial Brands: A Future Based on New Generation Products. Chief Executive Alison Cooper looks into the crystal ball as 2018 draws to a close. Staff Report
28 26
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A “Winnowing” Process. Scuderia Ferrari will team with Philip Morris International to transform their joint mission. Staff Report
22
Altria, Imperial, and PMI all Look to Dodge the Vapor Regulatory Bullet. Major U.S. companies scramble to avoid the ire of an FDA that increasingly dislikes vaping. By Christopher Bickers
DEPARTMENTS 26
Quest for Testing Procedures for Heated Tobacco Products. Tests currently in use were not wholly applicable.
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6 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
6
Contents
8
Editorial
10 TI Digest 28 Leaf News 32 Calendar, Advertiser Index
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TI EDITORIAL
PUBLISHER & PRESIDENT
Robert M. Lockwood EDITOR-IN-CHIEF
Where to Find a Cigarette Factory with Lots of Experience
Christopher Bickers
In the rolling hills of N.C.’s Piedmont, about 30 miles north of Greensboro, stands a tremendous old brick smokestack proudly pronouncing the name of the cigarette brand Lucky Strike. Quite a landmark, it leads one to what may be the oldest tobacco factories still generating product, the American Tobacco factory in Reidsville, N.C. But that may be coming to an end. ITG Brands, the American subsidiary of Imperial Brands, has been using the facility to make several of its cigarette brands. But now, ITG has decided to vacate it and transfer production of those brands to its facilities in Greensboro, N.C., (which coincidentally are located in the former Lorillard factory there.) The factory has certainly proven that it can produce cigarettes. Parts have been doing it since 1892. If it can’t be re-purposed for some other use and is lost, a lot of tobacco old-timers (like me) are going to be heartbroken. “Deciding to shift operations from Reidsville to our Greensboro plant was not an easy decision to make, especially given the long tradition of tobacco operations in Reidsville,” Dan Carr, ITG Brands’ chief executive officer said. “It is a business decision we had to make.” The move is expected by early 2020. The Reidsville factory was owned for over a hundred years by American Tobacco, which built it. In 1995, it was purchased by Brown & Williamson, which then sold it to Commonwealth Brands, which began making cigarettes in it in 1997. In 2007, what would become ITG’s parent company, Imperial Tobacco, purchased Commonwealth Brands and the factory. There was some further cooperative changing of hands. In 2015, when Imperial acquired the Reynolds American and Lorillard brands that those companies divested in order to gain regulatory approval for their merger, it created ITG Brands to manage its American cigarette-manufacturing activities. Now, four years later, there isn’t enough work to keep both the Reidsville and Greensboro facilities fully utilized, so for that reason, ITG decided to leave American Tobacco. No doubt, a tobacco company in need of a plant could negotiate a good deal on all or part of the Reidsville factory, or that it could be divided up for any number of non-tobacco uses. I hope some means can be devised to preserve the buildings. I would hate to think that I might someday not be able to find my way through central N.C. because those big white letters spelling out Lucky Strike aren’t there to guide me. IN THIS ISSUE: The Chief Executive of Imperial Brands describes a Future for her company bases on New Generation Products (page 14); Ferrari teams up with PMI to transform their corporate mission (page 18); Major U.S. companies scramble to avoid the ire of an FDA that increasingly dislikes vaping (page 22), and the advances that have been made in testing procedures for heated tobacco products (26).
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Volume 18, No. 7 TOBACCO INTERNATIONAL (ISSN 0049-3945 print; ISSN 2331-8481 online), established in 1886, is published six times a year, with two monthly issues (September & December) and four combined issues (Jan/Feb/Mar, April/May/June, October/November, Oct/Nov) plus a directory issue published in January of each year by Lockwood Trade Journal Co., Inc., 3743 Crescent Street, Second Floor, Long Island City, NY 11101, USA. Officers: Robert M. Lockwood, president and treasurer. Subscription rates: USA—US$49 per year, US$74 for two years; US$109 for three years. Canada—US$59 per year, US$89 for two years, US$134 for three years. All other countries: International Surface Mail—US$89 per year; US$139 for two years; US$199 for three years. International AirMail—US$129 per year; US$199 for two years; US$289 for three years. Single copy price: US$15. Annual Buyers’ Guide & Directory: US$45, plus shipping. Copyright ©2018 by Lockwood Publications, Inc. The contents of TOBACCO INTERNATIONAL may not be reprinted except by permission. POSTMASTER: Send address changes to TOBACCO INTERNATIONAL, P.O. Box 424, Congers, NY 10920-0430, USA.
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TI DIGEST BRAZIL JTI opens its first South American cigarette factory
UNITED STATES
SANTA CRUZ DO SUL–
OWENSBORO, KY.—Impressive sales volume in the United States by ZYN—Swedish Match’s still new nicotine pouches that contain no tobacco—led to a somewhat bigger than expected profit growth for the company in the third quarter. Third-quarter operating profit at the Nicotine pouches that contain no group, whose main business is “snus” tobacco, sold under the ZYN brand pouches in Scandinavia, jumped 20 name, have done well for Swedish Match in the United States. percent from a year ago to 1.31 billion crowns (US$ 144 million). “For international snus and nicotine pouches, we have now for two consecutive quarters reported positive operating results, stemming from strong volume growth for ZYN, improved pricing, and reduced marketing spending for U.S. snus,” said CEO Lars Dahlgren. He later told Reuters in an interview the segment was likely to reach profitability on an annual basis this year. “We go into the fourth quarter with very strong demand, particularly for ZYN, so it wouldn’t be unreasonable to estimate that a full-year result would be positive,” he said in a media interview. The group is building a U.S plant for ZYN. It will be adjacent to Swedish Match’s existing plant in Owensboro, Ky. “We recently decided to invest in larger scale production capacity to more fully capitalize on the progress of some of our newer smokeless products,” said Swedish Match North America Director of Operations Kristian Lindfors. “This capacity project will expand our existing facility for smokeless products in the US and will primarily cater to US demand but could potentially address future launches in other markets.” Production will start in the second quarter of 2019, and ZYN will be rolled out across the country in 2019 from the limited number of regions where it is sold currently. In September, Swedish Match entered the American market with its V2 Thunder Xtreme brand, a strong snus product. V2 was acquired by Swedish Match in September of 2017 and is located in Silkeborg, Denmark. Dahlgren noted that the acquisitions of V2 Tobacco and Denmark-based Oliver Twist (tobacco bits) delivered positive contributions to both the company’s sales and operating profit.
JTI opened its first South American cigarette factory in September in Santa Cruz do Sul, in the state of Rio Grande do sul, 96 miles west of Porto Alegre. JTI has dealt in Brazilian leaf since 2009, from facilities in Porto Allegre. The new plant, with its 10.000 square meters floor space, has capacity to operate four production lines in up to three shifts. The total investment for the factory amounted to 85 million Real. “In 2018, we celebrated 100 years of Japanese settlement in Brazil,” said Mutsuo Iwai, JT’s Executive Vice President and President of the Tobacco Business. “Now, we are very proud to open this factory in Santa Cruz do Sul. This is a great step to develop our business in Brazil.” The state of Rio Grande do Sul will produce the brands Camel and Winston to be marketed in Brazil and LD for export. In addition to supplying the Brazilian market, the output will be distributed to Argentina, Bolivia, Chile and Ecuador, and eventually to the whole of Latin America. According to Flavio Goulart, director of Corporate Affairs and Communication for JTI, the decision to invest in Brazil was motivated by the high degree of technical and operational knowledge available in the country. The excellent standards of the Brazilian tobacco leaves, which JTI employs in its global flagship brands, was also taken into account, he added.
JAPAN JT to launch a new white Ploom TECH device TOKYO —Japan
Tobacco is launching two new tobacco capsule flavors for its Ploom TECH vapor product--”Pianissimo Strawberry Mango Pink Cooler “ and
ZYN is off to a fast start in U.S.
“Pianissimo Lemon Tea Gold Aroma, according to a company statement. They will be gradually available across Japan starting December 3. At the same time, JT will launch a new Ploom TECH Starters Kit, which consists of a white Ploom TECH battery and a white USB docking station (charger).
10 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
The two flavors are JT’s first Ploom TECH tobacco capsules from the Pianissimo brand. “Pianissimo Strawberry Mango Pink Cooler for Ploom TECH” is a menthol product offering a mixture of ripe strawberry and mango flavors. “Pianissimo Lemon Tea Gold
joint responsibility We are committed to creative collaboration in all fields of corporate responsibility and sustainability.
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TI DIGEST Aroma for Ploom TECH”, a regular product, is characterized by a lemon tea flavor with a fruity aroma. JT says consumers credit the product for having “no smoke smell” and being “easy to use.”
SWITZERLAND WHO calls for strict regulation of heated tobacco products GENEVA—The Conference of the Parties to the WHO Framework Convention for Tobacco Control (FCTC) closed its eighth session in early October after adopting a Medium-Term Strategic Framework (MTSF) outlining a new action plan to scale up its global tobacco control agenda over the next few years. Delegates from 148 parties to the World Health Organization’s Framework Convention on Tobacco Control at the group’s recently completed eighth session in early October called for new heated tobacco products to be
regulated as strictly as cigarettes and other tobacco products, setting aside industry contentions that the products are less harmful than regular cigarettes. The WHO called for the same bans on advertising, promotion and sponsorship deals that apply to cigarettes. Dr. Vera Luiza da Costa e Silva, head of the WHO FCTC Secretariat, said there is no evidence that HTPs are less harmful than conventional tobacco products. She noted that while industry-funded studies have shown that there are significant reductions in the formation of and exposure to harmful and potentially harmful constituents relative to standard cigarettes, that doesn’t translate to reduced risk in humans. Additional independent studies will be required to substantiate claims of reduced risk/harm, she said. The six-day gathering brought together over 1,200 participants comprising delegations. The industry is not a party to the treaty or its deliberations.
UNITED KINGDOM JTI launches Logic Compact, new premium e-cigarette in UK LONDON —JTI
launched its new premium e-cigarette Logic Compact in September in London. Logic Compact follows Logic Pro, the UK’s #1 capsule vape, and is the latest addition to their portfolio of reduced risk products. “The UK is a growing e-cigarette market, with consumers increasingly looking for the ultimate vaping product,” said Daniel Sciamma, Managing Director of JTI in the UK. “Logic Compact offers a user-friendly and modern design, which is an exciting addition to our Logic portfolio. The new premium capsule vape is also an excellent product for adult smokers who are looking to vape, he added. “It delivers the perfect combination of flavor, power, simplicity and style,” featuring magnetic pods, large battery, and sleek compact design.
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IMPERIAL BRANDS Imperial Chief Executive Alison Cooper displays myblu (left) and blu (right) vaping products.
Imperial Brands:
A Future Based on New Generation Products Chief Executive Alison Cooper looks into the crystal ball as 2018 draws to a close. Staff Report iscal 2018 was a successful one for Imperial Brands in terms of performance against its strategy, said Alison Cooper, Imperial chief executive. “I’m pleased with the progress we are making in creating something better for the world’s smokers.” New Generation Products (NGP) are Imperial’s focus now as the company aims on transitioning smokers to blu, a
F
significantly less harmful alternative to cigarettes. “NGP also offers additive opportunities for our shareholders, and the success of the international rollout of myblu has put us in a strong position to further invest and accelerate sales growth in FY19,” says Cooper. In the tobacco area, Imperial is focusing on providing smokers with
14 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
an evolving portfolio of high-quality brands. “Following our additional brand investment in tobacco over the past two years, we have increased Growth Brand volume, share and revenue in our priority markets,” she said. Overall, financial delivery for the company was strong, she added, “with revenue and earnings growth, high cash generation and a further dividend increase of 10 per cent. Capital discipline remains central to all our activities, providing funds for investment and enhancing returns. “We have the strategy, assets and capabilities to realize the significant opportunities presented by a changing
environment and to generate growing returns for our shareholders.” Ambitions of growth in NGPs are substantial. “We view NGP as a significant additive growth opportunity for Imperial, due to the size of our global cigarette market share,” said Cooper. “This is reflected in our management incentives to deliver compound annual revenue growth of 35-150 per cent over the three years from 2017. This equates to a range of NGP revenues by 2020 of between £250 million and £1.5 billion.” The momentum Imperial generated with blu in 2018 resulted in an annualized exit run-rate of around £300 million of net revenue, and Imperial expects to exit next year with our NGP business beginning to add to Group profit.” The NGP portfolio is focused on blu, which celebrates its tenth anniversary in 2019. “Our current growth model is built around the ‘4Bs’ blu adoption model: Believe, Buy, Buy Again and Belong,” she said. “Our aim is to transition adult smokers through all four elements of the model, converting them to blu in the process. Once smokers belong to the blu community, we keep interacting with them in order to minimize their potential to revert to tobacco.” The strong growth in sales of my blu, with an increasing rate of pod repurchase, reflects the positive response from smokers, vapers and retailers in a growing number of markets. “We started the year in four markets and are now in nine, plus duty free and travel retail,” Cooper said. “Our my blu geographic footprint now covers the USA, UK, Italy, France, Germany, Russia, Japan, Austria and Canada, with further market launches to come.” Aligned with the blu adoption model, Imperial has a number of exciting brand building and awareness activities planned to support growth in 2019, which will add around £100 million to investments in the first half.
IMPERIAL BRANDS 2018 PRELIMINARY RESULTS
Key Areas Where Imperial Brands Made Progress in 2018 Investments in “Tobacco Maximization” are driving enhanced performance, including: • Reported volumes that are down 3.6 percent, outperforming industry volumes across footprint • Share growth in many of priority markets; for instance, Growth Brand share is up 70 bps • Improved price/mix in delivered tobacco net revenue, which is growing 0.9 percent • Asset Brand net revenue that is up 8.0 percent and up 420 bps; This category now accounts for 66.9 percent of net revenue • Strong performances from the company’s tobacco Specialist Brands: Backwoods, Kool, Rizla, Skruf and Premium Cigars Strong growth in Next Generation Products, with the focus on smoker conversion, accomplished by: • Delivering a satisfying, safer experience with a trusted brand, blu, supported by leading-edge science • Achieving strong net revenue growth to £200m, with an annualized exit rate of c. £300m • Making myblu available in US, UK, France, Germany, Japan, Italy and Russia • Maintaining a strong innovation pipeline focused on reduced risk products in vapor, heated tobacco and oral nicotine • Creating optionality with the launch of Pulze, our first heated tobacco product, planned for launch in early 2019 Cost and Capital Discipline • Cost optimization is on track and has delivered £110m of incremental savings in FY18 • Divestment program on track with proceeds to date of £281m from the sell down of Logista stake (£234m) and the sale of ‘other tobacco products’ in the US (£47m) • Cash conversion of 97 percent • Adjusted net debt reduced by £0.8bn at constant currency; adjusted net debt/EBITDA at 2.9 times • Reported net debt lower by £0.6bn at actual exchange rates • Annual dividend of 187.8p up 10 percent; dividend pay-out ratio of 69 percent.
OCTOBER/NOVEMBER 2018 TOBACCO INTERNATIONAL
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IMPERIAL BRANDS Corporate capabilities were increased early in 2018 with the acquisition of the UK NGP innovation business Nerudia. “The exciting work we are doing on innovation is transforming our portfolio, ensuring we are able to provide
“A regular drumbeat of innovations such as these is essential for accelerating smoker conversion rates, building brand loyalty and ensuring smokers stay in the NGP category.” The overall strategy has been to ‘Ac-
A regular drumbeat of innovations such as these is essential for accelerating smoker conversion rates, building brand loyalty and ensuring smokers stay in the NGP category. smokers with a wide range of high-quality products,” she said. “This includes tobacco-free snus, recently launched in Sweden, and a high-quality heated tobacco product called Pulze, which will be launched in 2019.
+44 114 262 6250
celerate Growth to Create Value.’ “This has been a year of building growth momentum, one in which we made further gains in tobacco and significantly expanded our NGP presence,” said Cooper. “Our success has
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put us in a strong position for delivering accelerated growth. We have an outstanding NGP portfolio and in creating something better for the world’s smokers, we are encouraging them to transition to less harmful alternatives to cigarettes.” Considering Imperial’s relatively small global cigarette market share, NGP represents an additive financial opportunity and will deliver a substantial amount of its future revenue and profit growth. “Tobacco will continue to play a material role in our business with further low single digit revenue growth, high margins and strong cash flows supporting investment in growth and shareholder returns,” she said. “Our talented people continue to support the strategy with tremendous energy, and we have the strategy, assets and capabilities for accelerating growth in NGP and generating further significant returns from our tobacco business.”
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PMI
A “Winnowing” Process Scuderia Ferrari will team with PMI to transform their joint mission. Staff Report MI has begun a new global initiative to transform the mission of Philip Morris International Inc. (PMI) with a clever name derived from the traditional process of “winnowing wheat,” that is, separating wheat from its chaff. In connection with its partner Scuderia Ferrari, PMI unveiled the new initiative—Mission Winnow—in Japan in early October to create engagement around the role of science, technology and innovation as a powerful force for good in any industry. The goals of Mission Winnow are, said André Calantzopoulos, Chief Executive Officer of PMI:
P
• To let the world know how the company has changed,
• To share pride in the transformation that the people of PMI have achieved; • To communicate the companies’ dedication to rigorous science and innovation that can lead to a better future. “We will use this global platform as a window into the new PMI and to challenge preconceptions, as we know there are many who may have doubts about us and our motivations.” PMI’s partnership with Scuderia Ferrari provides the opportunity to build on many encouraging individual conversations with critics and supporters alike and reach out to a broad audience to engage at scale. The word “winnow” describes the meticulous and disciplined route that PMI is following to achieve its ambi-
18 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
tious vision of a smoke-free future. The word—and PMI’s vision—is about focus, transparency, care and single-minded determination. “Winnow” originally referred to the removal of chaff from grain, but PMI notes that it has come to be used more broadly to describe the separating out of the unnecessary and the extraction of the good and the distinguishing of what is true from what is inaccurate or misleading. Scuderia Ferrari is the ideal partner for Mission Winnow because of the team’s passion for innovation and its drive to constantly improve in the quest for victory, said Miroslaw Zielinski, President Science & Innovation at PMI. “Through Mission Winnow, one can see that the two companies operate in very different fields but have a great deal in common. Success hinges on the passion of their people for the highest standards of performance in pursuit of overarching ambitions.” Mission Winnow does not and will
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AN OPINION PIECE FROM PMI
A Strategy for Ending Tobacco Consumption by Young People By André Calantzopoulos, Chief Executive Officer, PMI or years, young people have been rightly warned not to smoke cigarettes. …[Now] we must be emphatic that youth should not use any nicotine-containing product. Nicotine is addictive. it is not risk-free, and it poses particular risks for adolescents. I’m the CEO of Philip Morris International (PMI) and a parent. I am clear with my children: Do not use any nicotine-containing products. Alongside parents, public health professionals and regulators, makers of tobacco and nicotine products must do their part.
F
never advertise or promote any tobacco products, said Zielinski. “Mission Winnow is not about what, it is about how and why.” Why PMI supports FCTC on illicit trade PMI recently responded to the WHO FCTC Protocol to eliminate illicit trade in tobacco products. A condensed version of the response follows. If tackling illicit tobacco trade is to be done effectively, strategies must be articulated and they must address the following six points: • Product tracking and tracing based on open and recognized international standards.
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At PMI, we envision a smoke-free future—a world without cigarettes. For the hundreds of millions of men and women globally who will otherwise continue to smoke, our goal is to switch them to nicotine-containing products that are substantiated as better choices than continuing to smoke. Globally, our innovative products are available in more than 40 countries. To be clear, we do not sell or market any tobacco or other nicotine containing products in the U.S., but we have submitted applications to the FDA seeking authorization to commercialize our electrically-heated tobacco product. We know that great care must be taken to achieve our smoke-free goal. The focus must be on providing better choices to the men and women who smoke today, including the 40 million Americans who do so.
• • • • •
Effective control and monitoring of Free Trade Zones. Enhanced international cooperation. Application of deterrent sanctions to illicit traders. Licensing regimes that focus on tackling illicit trade. Meaningful due diligence and record-keeping.
With approximately one out of 10 cigarettes smoked globally stemming from illicit trade, parties to the protocol should take a collaborative approach to tackling the problem of illicit trade. Available on PMI’s website, the position paper proposes effective strategies for tackling the illicit tobacco trade, aligned with key provisions of the Protocol. “The Protocol is a significant and crucial global tool to tackle the serious issue of the illicit tobacco trade,” said Alvise Giustiniani, Vice President of Illicit Trade Prevention at PMI. “We strongly support the objectives and principles of the Protocol, as well as the Meeting of the Parties, which is an important step in tackling the multi-faceted and highly complex problem of illicit tobacco trade.” The PMI position paper says the Protocol brings together countries against the scourge of illicit tobacco trade. It will have a key role to play in helping to defeat the illegal tobacco market. Collaboration will be a key element of its success: national governments, international organizations and civil society working to fight illicit tobacco trade together. Comprehensive information about PMI’s efforts and initiatives in the fight against illicit tradecan be viewed on the dedicated website the company maintains at StopIllegal.com.
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FDA
Altria, Imperial, and PMI all Look to Dodge the Vapor Regulatory Bullet Major U.S. companies scramble to avoid the ire of an FDA that increasingly dislikes vaping. By Christopher Bickers n September, the U.S. Food and Drug Administration (FDA) announced a number of additional steps to address underage use of e-vapor products. These included asking several companies to provide plans to address underage use of e-vapor products. Altria said it was one of the targeted manufacturers and welcomed FDA’s action. In a letter to the F.D.A., Howard A. Willard III, chairman and chief executive of Altria Group, express alarm at the epidemic levels of youth e-cigarette use. “Although we do not believe we have a current issue with youth access to, or use of, our pod-based products, we do not want to risk contributing to the issue,” Willard wrote. But e-cigarettes are an important alternative for adults who want to stop smoking. “The current situation with youth use of e-vapor products, left unchecked, has the potential to undermine that opportunity,” Willard said. Representatives of Altria met with FDA Commissioner Gottlieb in October
I
to discuss actions that could be taken. Then in late October, Altria announced its affiliate Nu Mark would: • Remove MarkTen Elite and Apex by MarkTen pod-based products until these products receive a market order from the FDA or the youth issue is otherwise addressed; • For the remaining MarkTen and Green Smoke cig-a-like products, Nu Mark will sell only tobacco, menthol and mint varieties. Nu Mark will discontinue the sale of all other flavor variants of its cig-a-like products until these products receive a market order from the FDA or the youth issue is otherwise addressed; and • Altria will support federal legislation to establish 21 as the minimum age to purchase any tobacco product. Approximately 80 percent of Nu Mark’s e-vapor volume in the third-quarter of 2018 will remain on the market after the announced market withdrawals. The company reiterat-
22 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
ed that it has long supported efforts at retail to prevent youth access through identification checks, retailer training and other age verification practices. Similarly, it employs strong age-verification technologies and practices on our ecommerce sites to sell only to adult consumers age 21 and older. Altria stated it believes that the current youth issue is driven, in part, by “social access”—the purchase of tobacco products by consumers of legal age for use by minors. “We believe, in the face of these current e-vapor and youth-related concerns, now is the time to support federal legislation to increase the minimum legal age to purchase tobacco products to age 21 and to set a national standard.” Only the U.S. Congress can increase the minimum legal age nationally, and Altria said it will engroucage encourage Congress to consider the change as part of their tobacco-related
Altria has removed its MarkTen Elite (top) and Apex pod-based systems (above) from the U.S. market to await a market order from FDA.
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FDA legislative priorities. The company said it also supports requiring user fees for e-vapor products, banning vaping in schools and prohibiting selfservice displays at retail. Imperial Brands, Fontem Ventures: “We aim to comply” Imperial and its Fontem Ventures subsidiary in the US, to support their insisted in October that it too would maintain compliance with FDA rules on the
marketing, sale and distribution of vaping products in the US. “We fully recognize the challenge faced by the FDA in balancing the positive public health potential of vapor products with legitimate concerns regarding youth access and responsible marketing,” Imperial and Fontem announced in a joint statement. ” Imperial Brands and Fontem are committed to creating something better for the world’s smokers. Vaping provides a unique op-
portunity to switch smokers to a healthier alternative, but this can only be achieved by responsible businesses operating in appropriately regulated markets.” The statement concluded, “We will continue to engage with the FDA and other regulators around the world to shape the regulation that will encourage smokers to switch, focusing on issues including youth access prevention, product standards, harm reduction and responsible marketing.”
PMI LAUNCHES NEXT-GEN HEAT-NOT-BURN PRODUCTS: IQOS 3, IQOS 3 MULTI hile Altria adjusted its U.S. strategy in light of FDA scrutiny, Philip Morris International Inc. (PMI) went in another direction in October, launching a new generation of its heatnot-burn product, IQOS. The new IQOS 3 and IQOS 3 MULTI integrate extensive consumer insights and feedback for improving design and user experience. At the same time, they retain the signature taste, sensory attributes and ritual of the original version, according to the manufacturer. The new versions aim to encourage smokers to switch, to the benefit of their health, public health and, ultimately, society. T h e n e w i t e r a ti o n s w e r e launched October 22 in Tokyo, Japan, the “birthplace” of IQOS. The iconic brand offers the best in taste and satisfaction in the category, and almost six million adult smokers (more than half in Japan) have already quit cigarettes. “Our dream was to create a better alternative for smokers, and IQOS has made this dream a reality,” said André Calantzopoulos, PMI’s chief executive officer. “It’s a revolution for the 1.1 billion people who smoke. IQOS consumers know
W
André Calantzopoulos, CEO Philip Morris International (above left), introduced PMI’s new IQOS 3 (above right, shown with the available range of case colors) and IQOS 3 Multi (far right) in Tokyo, Japan—the world’s biggest market for heated tobacco. Improvements focused primarily on design and ergonomics.
that this product changes many things in their lives—we thank them, and we thank Japan for leading this positive change.” IQOS produces an aerosol that contains on average 90 percent lower levels of harmful chemicals than cigarette smoke. The totality of PMI’s preclinical and clinical evidence indicates that switching completely to IQOS presents less risk of harm than continued smoking. Evidence also shows that IQOS does not negatively affect indoor air quality. On average, 70 to 80 percent of IQOS users have quit cigarettes, which makes IQOS the most compelling smoke-free alternative today.
24 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
PMI has filed a Modified Risk Tobacco Pro duct Application (MRTPA) for IQOS with the U.S. FDA, but the U.S. FDA has not yet completed its review of the company’s data. IQOS is currently not for sale in the United States.
A Passion For Excellence
info@starag rite ch.co m
www. st a ra grit ec h. c om
SCIENCE
Quest for Testing Procedures for Heated Tobacco Products Tests currently in use were not wholly applicable. tandards for testing combustible cigarettes have been well defined for many years, but for e-cigarettes and next generation products, less so. Rigorous tests for water, nicotine and nicotine free dry particulate matter (NFDPM) were already in place for combustibles, but corresponding test categories for e-cigarettes and e-liquids were very limited. Now, Tobacco Heated Products (THP) have broken new ground. They were ground breaking when they were first introduced to the market; the heat sticks were designed with longer filter lengths, unique configurations, new materials and relatively low draw resistance. Also, the filter components were able to achieve relatively low filtration whilst maximising vapour temperature reduction. With this in mind, it became apparent that the current tests were not wholly applicable and new methods and tests themselves for THP products would have to be developed. Essentra, the leading global supplier of filters and analytical testing, recently conducted an intensive study in its Essentra Scientific Services to discover the best methods to test THP and ensure that the tests provided useful and accurate data. Various areas were explored, including: • How to enable a THP to be smoked on a standard linear smoking machine ; • What the most appropriate smoking regime is to adopt for THP; • How to develop a method to measure vapour temperature; • Understanding ‘NFDPM’; • Understanding the function of the filter element and its individual elements; In deciding what smoking regime
S
to use, it was important to consider the length of time a heating device was active, which system was best to produce the most accurate data, and the ways to collect enough material to analyse the water, nicotine, NFDPM and carbon monoxide. Though the creation of a new smoking standard was considered, a recognised industry smoking method was ultimately chosen. The Canadian intense smoking method—where a 55ml puff is taken over two seconds every 30 seconds—was used for analysis, smoking four channels, three heat sticks per channel with six puffs per heat stick. The use of six puffs was settled upon to ensure that the 44mm Cambridge filter pad, which has a limit of 150mg of material, did not overload. In addition, the analysis of water and nicotine was conducted using the standard ISO method 4387, resulting in the NFDPM. NFDPM is very different in a THP— you can see the difference in colour, which most likely results from the reduced constituents in ‘smoke’ due to the lack of combustion. THP-heating devices have a core temperature in excess of 200°C. The filter element without tip ventilation needs to reduce the vapour temperature to a level
NFDPM (THP) Above: A typical set of results for testing of a THP product Left: How a Cambridge Pad looks following ‘smoking’ of (left) a THP product and (right) a conventional cigarette.
26 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
acceptable to the consumer (normally about 35–50°C). Thermal measurement of vapour proved to be the most challenging with existing smoking machine setups due to the difficulty in observing the vapour being drawn from the heat stick at the point of smoking. In order to measure the vapour temperature during the smoking cycle, Essentra designed a device which enabled the measurement of the temperature emitted from the end of the heat stick during smoking. This also offers the capability to measure each individual filter segment, allowing an understanding of the filtration and thermal performance of different filter styles and materials, and the impact on ventilation in THPs. The study required the modification of a linear smoking machine and the development of a device to measure the filtration and thermal performance of the heat stick, it helped to enhance Essentra’s knowledge and understanding of the topic. By developing its bespoke filter solutions for THP, Essentra may be able to widen its portfolio further in the future, including simpler filter assemblies and biodegradable filter components.
HEAT STICK ANALYSIS TPM NFDPM Nicotine Co Water
mg/cig mg/cig mg/cig mg/cig mg/cig
37.93 17.30 1.22 0.40 19.10
(Source: Essentra)
NFDPM (CIGARETTE)
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LEAF NEWS
Heavy rains beginning in September wreaked havoc on this Bluegrass field and many others in Kentucky.
UNITED STATES Can American farmers fill the needs of its leaf customers? RALEIGH, NORTH CAROLINA—The
pressing question in American farming circles as November began was, will this country be able to fill the needs of buyers who depend on it? The weather in tobacco areas from mid-September on made this a very realistic question. Heavy and persistent rains in Virginia and western North Carolina turned tobacco fields in those areas into a muck. The results were even worse for eastern North and South Carolina when Hurricane Florence blew in in mid-September, drowning some tobacco and whipping much of the rest with savage winds. Farmers were only arguably recovered when Hurricane Matthew arrived in early October. The general damage again was mainly in the eastern Caro-
linas but since most of the tobacco in those areas was harvested or abandoned by that time, Matthew had little effect there. But the heavy rains it created proved to be a problem in the N.C. and Virginia Piedmont, where tobacco was still in the field. A report on the effect of the storms of later 2018. FLUE-CURED—The estimates of loss in N.C. vary widely among the various observers, with the leader of the N.C. Tobacco Growers Association placing it at 128 million pounds. But as the weeks padded that was generally regarded as a “top” figure, with 100 to 110 million pounds seeming a more realistic projection. Almost all of that came in the Eastern Belt and most was the result of Florence. But Michael had a catastrophic effect in the Piedmont, where some
28 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
flue-cured was still being harvested on October 4. An auctioneer described how even where tobacco survived the hurricane, the production calendar was jumbled badly buy the rain. “On late-planted tobacco, we saw some harvested just once, then all the rest was stripped,” said Dennis White, owner of the Old Belt Tobacco Sales, which operates a warehouse near Winston-Salem. That harvesting schedule did not contribute to best quality. But at his auction, he still got good sales, and all leaf offered found a home. But the character of the leaf offered definitely changed, with much more than usual graded as Smoking Leaf or H leaf. “H5K is a grade we see a lot,” White said. The price did not go up substantially after the hurricanes, he said. “It falls in the $1.50 to $1.65 range,” he said in
www.universalcorp.com
LEAF NEWS late October. The practical top has been around $1.85. In the Virginia Southside, excessive rainfall began in late August and continued when storms began to amass in September and October. Up to that point, the crop had been estimated at 50 to 52 million pounds of flue-crop. “I would guess that we lost 10 to 12 percent of that total,” said David Reed, Extension tobacco agronomist. “In the eastern (segment of the tobacco-growing) area, the loss is probably in the area of five percent, but might have approached 15 to 20 percent in some areas of Pittsylvania and Halifax Counties.” A few growers made their contracted pounds, but most will fall short, Reed said. Although South Carolina experienced perhaps the worst of the winds of the two hurricanes, they didn’t suffer much damage to their tobacco, because
very little tobacco remained in the field when Florence blew through. Area Extension agronomy agent William Hardee estimated that only 200 to 400 acres still had leaf to be harvested at that time, almost all of it tip leaf. He predicted that none of it would be salvageable. BURLEY—The burley crop in Kentucky took a significant hit from rains in September, said Bob Pearce, Kentucky Extension tobacco specialist. “Statewide. I would estimate losses of 20 to 30 percent. In the bluegrass region, the losses may have been up to 40 percent in the bluegrass region.” He thinks burley production for Kentucky lost 20 to 30 million pounds and might be down to a total of around 80 million pounds.” Uncharacteristically heavy rains Southern Ohio in August, September
30 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
and the first half of October left burley tobacco in a “mess.” Some farms in Adams County reported around 18 inches of late-season rain, said David Dugan, Ohio Extension Educator. “Several acres were under water as result of heavy rains over the Labor Day weekend. Some producers harvested less than half of their crop as a result. The Gallia County area is probably 60-70 percent harvested—the rest was lost. The quality of what was harvested was impacted. “But I am not sure to what extent,” he said. “I would think Ohio is looking at a minimum of a 50 percent loss in volume (because of the late season weather).” But burley in Tennessee was not seriously affected by the rains that struck Kentucky late in the season. “There was a small percentage affected. maybe five percent,” said Eric Walker, Tennessee Extension tobacco
specialist. Overall, the crop turned out pretty good. A small percentage of the tobacco was hit late with significant foliar leaf spot diseases, mainly frogeye leaf spot and some target spot.” Rather than the weather, factors other than the weather have significantly reduced the size of the burley crop this year. “I expect acreage to be down 35-40 percent from last year, and that may be a little conservative,” said Walker. “Estimates of pounds are always hard, but I think we will have somewhere around 12 million pounds.” DARK—Finally, the dark-producing area of western Kentucky and Tennessee perhaps had the best fortune of any of the states in September and October. It avoided almost completely the storms that damaged burley the crop in the bluegrass area. “We have a good crop,” said Andy Bailey, Kenturcky Extension dark tobacco specialist. He thinks there will be around 56 million pounds of dark fired and around 19 million pounds of dark air cured.
Cuban President Díaz-Canel Bermúdez seen visiting tobacco seedbeds in Pinar del Río on Oct. 10 during his tour of the region’s recovering efforts following damage inflicted by Hurricane Michael on the western-most province of Cuba. Photo: Granma
covering more than 30,000 hectares nationwide.
JAPAN Plantings to rise 4.8% in 2019 TOKYO—Plantings
for the 2019 Japanese tobacco crop have been set at 6,886 hectares, a decrease of 4.8 percent compared to the previous year, according to Japan’s Leaf Tobacco Deliberative Council. The grower price will be set at an average of ¥1,912.32 per kilogram for all leaf types, an increase of 1.33 percent compared to the previous year.
CUBA Hurricane Michael Damage Minimal in Cigar Tobacco Area PINAR DEL RIO , CUBA —Hurricane Michael touched the western end of Cuba but damage to the tobacco crop was manageable, said the president of Tabacuba, Justo Luis Fuentes. “We have the necessary resources to repair the damaged crops,” he said in La Prensa. “We can move forward and we have already started planting in many areas and it will gradually spread throughout the province.” According to preliminary reports, about 60,000 nurseries, some planted hectares and 12 tobacco houses were lost in Pinar del Río, mostly in the region of Vuelta Abajo. The 2018–2019 tobacco campaign officially began on October 10 in Cuba,
MALAWI Has Malawi’s burley gotten a boost from short U.S. crop? BLANTYRE—In
what could be a harbinger of things to come, Malawi’s burley revenue rose 60 percent this marketing season, which ended in August. In addition, reliable reports from dealers in the U.S. indicate that buyers have been searching out uncommitted burley in Malawi wherever they could. It seems reasonable to assume that the market thinks that U.S. burley will fall short of industry needs and that Malawi is the best substitute. A report issued by Auction Holdings Limited and the Tobacco Control Commission of Malawi said revenues for 2018 reached $337.5 million, up substantially from $212.4 million in 2017. OCTOBER/NOVEMBER 2018 TOBACCO INTERNATIONAL
31
CALENDAR OF EVENTS November 28–29, 2018 ISmokeExpo Rosemont, Illinois, USA Web: internationalsmokeexpo.com
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2018 BUYERS’ GUIDE & GLOBAL DIRECTORY
February 11–13, 2019 TPE 2019 International (Tobacco Plus Expo) Las Vegas Convention Center, Las Vegas, Nev. Contact: Trade Show Logic, (Attendees) Caroline O’Carroll, Tel: (617) 680-2554, Email: cocarroll@ tradeshowlogic.com; (Exhibitors) Hilary Manning, Tel: (805) 744-4216, Email: hilarymanning@tobaccoplusexpo. com, Web: tobaccoplusexpo.com. February 17–22, 2019 12th Annual ProCigar Festival La Romana and Santiago de los Caballeros, Dominican Republic. Premium cigar festival. Contact: ProCigar, Web: procigar.org.
March 17–21, 2019 TAA 51st Annual Convention Casa de Campo, La Romana, Dominican Republic. Contact: Tobacconists’ Association of America, Tel: (770) 597-6264 Email: info@thetaa.org, Web: thetaa.org.
The Murky Future of Vaping and Cannabis
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AUSTRIA SCRAPS ITS BAN ON SMOKING IN BARS & RESTAURANTS
PLUS: • HOW FAR WILL THE U.S. BURLEY MARKET FALL? • THE FUTURE OF NICOTINE COULD BE TOBACCO FREE • WHICH WAY ALLIANCE ONE?
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ADVERTISER INDEX AircoDIET .................................................................. 31
Independent Leaf ....................................................... 20
Arkote ........................................................................ 16
JTI ............................................................................... 3
BMJ......................................................................... 4, 5
Socotab ..................................................................... 21
Bobst ......................................................................... C2
Star Agritech ............................................................. 25
Boegli-Gravures.......................................................... 27
SWM International ..................................................... 23
delfort group ...................................................... 7, 9, 11
TSAL ......................................................................... 17
Hampshire Tobacco Machinery Services (HTMS) ........ 30
Universal Leaf ........................................................... 29
Imperial Tobacco ....................................................... 13
U.S.Tobacco Cooperative .......................................... 19
32 TOBACCO INTERNATIONAL OCTOBER/NOVEMBER 2018
THE AUTHORITY ON TOBACCO DISTRIBUTION AND RETAILING
Quarter 3, 2018
INTERTABAC MARKS 40 YEARS Dortmund trade fair continues to expand its global reach and merchandise depth.
PLUS: • James J. Fox Brings La Casa del Habano to Harrods
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The Dominican Republic’s association of leading cigar makers, Procigar, hosted the 11th Annual Procigar Festival where it welcomed Royal Agio Cigars as its newest member.
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Quarter 3, 2018
INTERTABAC MARKS 40 YEARS Dortmund trade fair continues to expand its global reach and merchandise depth.
PLUS: • James J. Fox Brings La Casa del Habano to Harrods
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FESTIVAL DEL HABANO AT 20
Excitement at Cuba’s Habanos Festival 20 Años was boosted by strong Habanos S.A. financials for 2017, thanks to the surging Chinese market. PLUS: • Arnold André is Once Again 100% Family Owned • Cohiba Atmosphere Opens in Sofia, Bulgaria
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{Contents} 6
TOBACCO PRODUCTS INTERNATIONAL » Q3 2018
FEATURES
{ EDITORIAL }
{ TRADE FAIRS }
6 InterTabac 2018 Trade Fair Marks its 40th Anniversary InterTabac 2018 posted noticeable growth in both emerging categories, as well as traditional tobacco, as international participation continued to rise. » STAFF REPORT
DEPARTMENTS Industry News .......................................4 Showcase............................................. 16
E. EDWARD “TED” HOYT III Editor ROBERT M. LOCKWOOD Publisher & President { ART & PRODUCTION } MELINDA AYALA Production Coordinator ROXANNE CORDOVA MELENDEZ Accountant
12
{ ADVERTISING REPRESENTATIVES } ALL REGIONS
Robert M. Lockwood TEL: + 1-212-391-2060, x109 FAX: + 1-212-827-0945 EMAIL: robert@lockwoodpublications.com SPECIAL SALES REPRESENTATIVE
George E. Lockwood TEL: + 1-413-775-0005 FAX: + 1-413-775-9010 EMAIL: lockwood.george@gmail.com
{Editor’s Letter} InterTabac’s Domination of Global Tobacco Trade Fairs Continues to Grow While the InterTabac trade fair at the Messe Westfalenallen Dortmund continues to
Tobacco Products International Lockwood Trade Journal Co. Inc., 3743 Crescent Street, Second Floor Long Island City, New York 11101 U.S.A. Tel: +1 (212) 391-2060 Fax: +1 (212) 827-0945 SUBSCRIPTION SERVICES:
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solidify its position as the flagship international tobacco event, organizers have made
EDITORIAL SUBMISSIONS/INQUIRIES:
no small effort to accommodate not only closely-related tobacco accessories, but all
editor@tobaccoproductsmag.com
releated market segment, fully embracing vapor, hookah, and other tobacco products. Marking its 40th year in 2018, the event has grown particularly rapidly in recent years, enhanced by organizer’s decision to simulataneously host an industrial exhibition for the suppliers of equipment and products used in the manufacture of consumer tobacco goods, piggy-backing on. It was a brilliant move, given that the competing field of supply exhibitions are split among a number of other organizers, held in a varieties of changing locales, and rarely on an annual basis. InterSupply offers a synergistic magnet to draw an even broader, vertical slice of the industry to a well-established fair. This year, InterTabac hit 12,500 participants, and continues to become more inter-
AD INDEX Durfort Holdings, S.A. .................. 5 Custom tobacco products, private labeling and manufacturing services. durfortholdings.com Tobacco Products International ..... C2
national in its reach, branching well beyond its historical origins as a German trade fair serving the German market, and nearly dominating the entire Messe Dortmund facility.
» Ted Hoyt, Editor
Tobacco Products INTERNATIONAL
Tobacco Products International
TPI 3
{Industry News} Gurkha Cigars Adds First Branded Lounge in Europe Gurkha Cigars opened its first lounge in Europe on September 12th at Miguel Private Cigars in Berlin, Germany. The opening was a private ribbon-cutting event attended by over 50 VIP clients. “In our lounge, you get an excellent selection of fine cigars for every palate including two versions of
James J Fox, La Casa del Habano Partner to open La Casa del Habano in Harrod’s
the Lounge Exclusive Gurkha Dragon
UK cigar retailer James J Fox has partnered with Harrods and the leading global cigar
cigar lounge, which seats 20 people,
purveyor La Casa Del Habano to create a state-of-the-art cigar department in the
can be rented for private events.
world’s most iconic department store in Knightsbridge, the heart of Central London. The walk-in humidor designed by Europe’s leading humidor expert DeArt. Crafted
Cigar,” said Torsten Reich, owner of Miguel Private Cigars. The English-style
Miguel Private Cigars reopened in June following five months of
entirely from the best quality Spanish cedar wood, provides the ideal environment for
renovations under new owner Reich,
the entire Habanos portfolio, from the beloved classics to the rare, aged and limited
and was officially inaugurated by
editions and the sought after La Casa Del Habano exclusive lines.
the ambassador of the Dominican
Martin Brudnizki Design Studio created an opulent setting for the widest selec-
Republic in July. It features a
tion of premium accessories in the UK, including S.T. Dupont’s Art of Fire and their
20-square-meter walk-in humidor
made to order Haute Couture lighters, or, Elie Bleu’s stunning hand crafted humi-
stocked with cigars from all regions,
dors, to name a few.
including Cuba and Central America.
Cigars can be sampled
Gurkha has 20 exclusive lounges
on premises in a refined
worldwide and plans to continue
and intimate sampling
expanding in the coming year.
room featuring compli-
Recently, the company added distrib-
mentary refreshments
utors in Mexico and Italy and antici-
and a cutting-edge air fil-
pates rapid expansion in Europe and
tration system, designed
Asia. “The German market has been
by Swiss-based experts
very receptive to Gurkha and really
Airkel, to produce superb air
understands and appreciates the
quality through continuous extraction of smoke and the diffusion of clean air into the space. A limited number of Spanish cedar wood cigar lockers will be available exclusively to Cigar Club members, which includes an account via a dedicated website to manage locker inventory and check humidity and temperature levels, either online or via the mobile application. Among other benefits, Cigar Club members will have an exclusive opportunity to book a table or the lounge for private events, the opportunity to pre-order any exciting new releases. These and many more services will be available via personally tailored cigar advice, in person, via telephone or email, by a dedicated Cigar Club Manager.
TPI 4
Q3 2018
> Juan Lopez, Gurkha Director of Sales; Martina Kleinlagel of Klaus Kleinlagel distributors; and Torsten Reich, owner Martin Private Cigars.
{Tradeshow Roundup}
InterTabac 2018 Fair Marks 40th Anniversary InterTabac 2018 posted noticeable growth in both emerging categories, as well as traditional tobacco, as international participation continued to rise. » STAFF REPORT
T
Morocco, Egypt, and Nigeria. Asian visitors came from countries including China, India, Indonesia, and Hong Kong. The Middle East was represented by visitors from Israel, Saudi Arabia, and the United Arab Emirates. There were also visitors from Australia and New Zealand. European markets, of course, were widely represented with visitors from France,
he 2018 InterTabac trade show
for the production of tobacco goods
Great Britain, Italy, Austria, Poland, and
looked back on a 40-year history
and e-cigarettes—was co-located in
the Benelux countries.
this year, one that has firmly
Hall 3B for the fourth time. InterTabac
In addition to the many international
placed it in the leading market position
itself occupied more exhibition halls than
guests at the fair, there were also once
among global tobacco trade fairs.
ever before and, for the first time, the
again trade visitors represented from
Westfalenhalle event arena.
almost all German states. Larger visitor
A total of 625 exhibitors from 54 countries showcased their products
Since its founding, InterTabac has
groups came from, for example, Lower
and services at the Dortmund Exhibition
grown from local to regional in scope,
Saxony, Bavaria, Baden-Wurttemberg,
Centre from 21 to 23 September, an in-
and in recent years has expanded mark-
Hesse and Rhineland-Palatinate.
crease of about 12 per cent compared to
edly into an international forum of the
InterTabac caters strongly to the pur-
the previous year.
industry. In 2018, 45 per cent of all trade
chasing and information needs of the
“InterTabac is today the world’s flag-
fair visitors came from abroad, and the
industry. Within the scope of a visitor
ship trade fair of the industry and con-
percentage of foreign visitors has never
survey conducted by an independent ex-
firmed that again in 2018,“ said Sabine
been higher. It again increased by four
hibition market research institute, 91 per
Loos, CEO of Westfalenhallen Dortmund
percentage points in 2018 compared to
cent of the trade visitors stated that their
GmbH, which hosts the event every
the previous year.
visit to InterTabac was worthwhile. The
September. In all, 12,500 trade visitors
Trade visitors to Dortmund came
percentage of visitors who rated InterTa-
from representing every continent were
from a diverse range of markets includ-
bac even better than the year before
guests in the exhibition halls. Besides
ing the USA, Canada, Brazil, Chile, and
increased, expressing satisfaction with
InterTabac, InterSupply—the trade fair
Colombia, as well as Africa, including
the presence of market leaders.
TPI 6
Q3 2018
The largest visitor groups in 2018 again came from the retail sector, followed by the wholesale and industrial sectors. The largest professional groups were again entrepreneurs, managing directors, and departmental managers, with nine out of ten declaring involvement in purchase decisions at their companies in an advisory, co-deciding, or decision-making capacity. The range of products and services at InterTabac is one of the trade fair’s hallmarks, and product preferences were reflected by InterTabac’s extended range in the halls covering Next Generation Products (NGP) this year. In 2018, visitors were mainly interested in: cigarillos/ cigars/cigarettes, e-cigarettes/e-shishas,
Above: Per Georg Jensen, Mac Baren Tobacco Company’s pipe tobacco expert and master blender, discusses blends with visitors at the stand of the company’s German importer, Arnold André.
liquids, smoking accessories and ciga-
“It is good to know that the trade
tobacco to shishas, new tobacco heaters
rette paper, Next Generation Products,
fair takes the industry’s growth into ac-
and e-cigarettes shows a lively and highly
and fine-cut tobacco.
count,” said Dustin Dahlmann, Chairman
innovative industry that offers the right
In fact, InterTabac 2018 showcased
of the Board of the German Alliance for
product for all sorts of smoking and vap-
NGPs on a record-sized exhibition area
Tobacco-Free Enjoyment (Bündnis für Ta-
ing enjoyment desires.”
extending across the Westfalenhalle
bakfreien Genuss). Jan Mücke, Managing
More attendees also visited InterSup-
event arena and Halls 2 and 3A. Visitors
Director of the German Association of the
ply, featuring 114 exhibitors from 35 coun-
were also able to access the trade fair
Cigarette Industry (DZV), said, “InterTa-
tries exhibiting, primarily interested in raw
directly from the main entrance of the
bac was able to grow again this year. The
tobacco, flavours and additives, packaging
Westfalenhalle event arena if they want-
ever-increasing product variety ranging
materials and machines for the production
ed to get straight to the NGPs.
from classic cigarettes, cigars and pipe
of ecigarettes and tobacco goods.
2018 Cigar Trophy Winners
TPI
During the month of June, Cigar Journal readers were asked to nominate their top candidates in five categories
The 2018 Cigar Trophy Awards, which are among only a few
of cigars, and to then vote for a winner from the finalists in
in the industry determined by consumer voting, were pre-
eadh of those categories. The 2018 winners were:
sented by Cigar Journal Magazine on Friday, Sept 21, at the 2018 InterTabac Trade Fair in the presence of the biggest
Best Brand, Cuba: Bolívar
names of the industry. Only four of a total of 18 awards were
Best Brand, Dominican Rep.: Davidoff Winston Churchill Late Hour
determined by the Cigar Journal jury, and those honors were
Best Brand, Honduras: Alec Bradley Prensado Lost Art
not directed at specific cigars or brands. The winners were:
Best Brand, Nicaragua: Perdomo Reserve 10th Anniversary Conn. Best Brand, U.S.A.: Cornelius & Anthony Cornelius
Charity & Community: Pronica, initiated by Sasja van Horssen and Joya
Best Cigar, Cuba: Montecristo 80 Aniversario
de Nicaragua, donates to charities a portion of proceeds per cigar sold.
Best Cigar, Dominican Repupblic: La Flor Dominicana La Volcada
Outstanding Art: Subculture Studios, the artists’ collective founded by
Best Cigar, Honduras: Plasencia Cosecha 146 Toro
Drew Estate, was distinguished for its “aesthetic accentuation.”
Best Cigar, Nicaragua: Padrón 1964 Anniv. Series Presidente Maduro
Ambassador: The German city of Lorsch, whose tobacco project is bring-
Best Value, Dominican Repupblic: Kristoff Original Maduro
ing the cultivation and processing of tobacco back to the center of society,
Best Value, Honduras: Asylum 13 Corojo
The award for the promotion of cigar culture.
Best Value, Nicaragua: Oliva Serie O
Lifetime Achievement: Carlos Fuente Jr. received this prestigious
Best Cigar Accessory: PerfecDraw
award in recognition of his life’s work.
Best Cigar Lounge: BURN by Rocky Patel, Pittsburgh, U.S.A.
Tobacco Products International
TPI 7
{Showcase}
Wookah Hookah: Artistic, Handcrafted Wooden Hookahs from Poland Wookah aims to create shisha that are unlike anything else available on the market, with attention to every detail, connection, seal, and joint as well as the quality of materials, inspiring the company’s founders to use wood. Each Wookah (wooden hookah) is individualized by the unique nature of its particular wood and selected in a very strict quality control process. The company’s offerings include
Cigar Knives from Les Fines Lames
different types of wooden bodies made of natural exotic (imported) and European
Designed and made in France by skilled
(domestic) wood including oak, meranti, iroko, merbau, walnut, padouk, teak,
craftsmen, the White G10 Limited Edition
wenge, nox, and tenebris, which makes each piece unique. A variety of vases
cigar knife from Les Fine Lames is the
are also offered, from wooden to crystal (clear and colored) and smooth. Some of
latest release in the French company’s al-
the wooden bodies have undergone special treatment and also differ in finishes,
ways-changing portfolio of knive finishes.
such as the colored series. The whole production process takes place in Poland.
Every piece of this edition is num-
the varying nature of handcrafting. They are handmade products, made of wood
Other materials used include stainless steel, natural leather, crystal glass, glass
bered, out of a total production of 50.
and ceramic. Glues, lacquers, and the company’s “secret material” used for
The handle material is made from G10,
the hookah interiors are certified to use with potable water. The waterpipes are
a high-pressure fiberglass laminate
chiefly handmade, but more detailed pieces are made using CNC machines.
composite material especially used to
Wookah, Mielec, Poland, Email: info@wookah.pl, Web: wookah.pl.
make handles for knives, grips for firearms and other tools. Its high strength,
Xikar Introduces HP3 High Performance Triple Jet Lighters
durability and moisture absorption make
The streamlined appearance of
properties.
the High Performance Triple Jet
G10 a very well known and praised material in knife making for its impressive The blade is made using MOX27Co
Flame Lighter (HP3) from Xikar
steel, a top-tier cutlery stainless steel
is engineered for performance
made in France. Its 60HRC tempered
and precision. The trademarked,
hardness make the blade virtually
oversized double EZ-View red fuel
impossible to dull. Its registered design
windows allows users to easily inspect the remaining butane levels in the
allows it to be used either as a knife or a
tank, while a quick turn of the oversized adjustment wheel, centrally located
cigar cutter, without ever dulling the ci-
at the base of the lighter, allows users to fine-tune the desired flame height.
gar cutting part of the blade. It delivers a
The series is available in a choice of four finishes: Matte Black, G2, Daytona
razor sharp cut and won’t damage cigars
Red, and Burnt Yellow.
Les Fines Lames, Aix-en-Provence,
Xikar, Inc., Kansas City, Mo., U.S.A., Email: info@xikar.com, Web: xikar.com.
France, Web: lesfineslames.com.
TPI 8
Q3 2018
