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Philip Morris Readies
LAUSANNE, Switzerland -- Sitting in his office overlooking Lake Geneva, Philip Morris International Chief Executive André Calantzopoulos takes a long drag from an unusually short cigarette. Called Marlboro Intense, the product has been shrunk down by about a half inch, and offers smokers seven potent puffs apiece, versus the average of eight or so milder draws.
The idea behind Intense is to appeal to customers who, due to indoor smoking bans, want to dash outside for a quick nicotine hit but don't always finish a full-size cigarette. Pointing to his lit Intense, the CEO says there are "possibly 50 markets that are interested in deploying it."
Marlboro Intense is likely to be part of an aggressive blitz of new smoking products PMI will roll out around the globe once the company -- now a unit of New York-based Altria Group Inc. -- becomes a standalone entity. That change will be set into motion tomorrow, when the Altria board is expected to approve a long-awaited decision to split PMI from Philip Morris USA. The move would free the tobacco giant's international operations of legal and public-relations headaches in the U.S. that have hindered its growth.
The separate entity, for example, would be exempt from U.S. tobacco regulations and out of reach of American litigators. Importantly, its practices would no longer be constrained by American public opinion, paving the way for broad product experimentation. By as early as March, PMI could be operating as an independent company -- the third most profitable consumer goods concern in the world after Procter & Gamble Co. and Nestlé SA. The move will make it easier for the tobacco behemoth to market an array of new smoking concepts, each targeted to different foreign populations, who, collectively are expected to smoke 5.2 trillion cigarettes this year.
Among the new products in test phase is a hand-held electronic smoking device called the Heatbar, which emits less smoke than a regular cigarette. Another is Marlboro Wides -- an extra-thick cigarette whose package flips open from one side. To appeal to customers in some emerging markets, the company is making sweet-smelling cigarettes that contain tobacco, cloves and flavoring -- with twice the tar and nicotine levels of a conventional U.S. cigarette.
While smoking rates in developed countries have slowly declined, they have shot up dramatically in some developing counties, where PMI is a major player. These include Pakistan (up 42% since 2001), Ukraine (up 36%) and Argentina (up 18%).
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