TI JanFeb2016 • TPI Q1

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10 TOBACCO INTERNATIONAL JANUARY/FEBRUARY 2016 The New Normal Tobacco's history is rich with tradition. But new ideas and new products, cultural trends, regulations and so much more have influenced the tobacco industry such that it is experiencing a new normal. This new normal comprises change–from a variety of developments to fresh takes on old themes. Take our cover feature on the 22nd Century Group (or XXII Group). Led by tobacco veteran Henry Sicignano, III, this tobacco company's long-term strategy is to create products that reduce the harmful effects of tobacco while embracing the licensing, manufacturing and selling of its proprietary tobacco technology. As we learned from Sicignano, this starts with an understanding of the new normal and the vision to put together a successful strategy. The plan that Sicignano outlines is based on recognizing that overall worldwide tobacco product sales of $800B (pri- marily cigarettes), plus the $1B cessation market in the US, and a $3B global smok- ing cessation market (which may grow as large as $5B by 2020) combine to create pathways to success for XXII. Sicignano believes XXII will thrive by reducing the harm caused by smoking through the sale of Very Low Nicotine cigarettes (Brand A in the US and Magic in the EU), low tar cigarettes (Brand B in the US) and a smoking cessation product (X-22), as well as its extra strength nicotine cigarettes (Red Sun), which offer additional satisfaction per cigarette and thus reducing the consumer's cumulative smoking. It's a great story and we are privileged to be shar- ing it with you in Tobacco International. Across the world, there are other tobacco manufacturers adapting to change and reshaping their own new normal. Take Iran, where smoking is said to be evi- dent everywhere on the streets and in homes and non-governmental workplaces. The most common brands include Caspian, Special Oshno, Bahman, Tir, Farvadin, Zar, Kish and Iranian Original Tomba, all of which are popular with Iranians. The key for manufacturers, Bob Crew writes, is to remain mindful of Iran's history. Elsewhere, following a decision adopted at the end of 2015, the Eurasian Economic Union (EEU) comprising Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan is harmonizing excise rates on tobacco production among its member states with the goal of eroding and eliminating the disparity in rates between coun- tries. This disparity is the economic basis for the market in smuggling cigarettes and the initiative is supported by a majority of manufacturers in the region. We also cover a variety of other tobacco stories including an exclusive fea- ture on leading fumigation manufacturer Degesch America and, on the Tobacco Products International side of the book, the Habanos Festival 2016, Russia's interest in PMI's manufacturing of heat sticks, as well as the long-term effects for interna- tional cigar manufacturers due to the volcanic eruption of Mt. Raung in Indonesia, which devasted that region's 2015 tobacco crop. It's all part of the new normal. We hope you enjoy the issue. publisher Rob Lockwood president Robert M. Lockwood vice president Frederick A. Lockwood circulation manager Jamie Wollberg director of exhibitions Frank B. Schuetze (Germany) accountant Roxanne Cordova Melendez Advertising Representatives austria, france, germany, switzerland, united kingdom Robert M. Lockwood tel: + 1-212-391-2060, ext. 109 fax: + 1-212-827-0945 email: benelux, italy, portugal, south america, spain Frederick A. Lockwood tel: + 1-212-391-2060, ext. 107 fax: + 1-212-827-0945 email: africa, scandinavia, southeastern us, turkey Rob Lockwood, Jr. tel: + 1-212-391-2060, ext. 130 fax: + 1-212-827-0945 email: north america, central america, caribbean Bob Olesen tel: + 1-212-391-2060, ext. 134 fax: + 1-212-827-0945 email: asia (china), eastern europe (sales), middle east, oceania (australia) Kelly Hobbs tel: + 1-212-832-9322 fax: + 1-212-827-0945 email: director of exhibitions (eastern europe, russia) Frank B. Schuetze, tel: + 49 30 645 7212 fax: + 49 30 6409 1350 email: special sales representative George E. Lockwood tel: + 1-413-548-9700 fax: + 1-413-548-9727 email: for sales, subscriptions & other regions contact: Tobacco International Sales 3743 Crescent Street, Second Floor Long Island City, NY 11101, USA tel: +1-212-391-2060 | fax: +1-212-827-0945 sales: — Murdoch McBride, Editor Volume 16, No. 1 TOBACCO INTERNATIONAL (ISSN 0049-3945 print; ISSN 2331-8481 online), established in 1886, is published eight times a year, with four monthly issues and four combined issues (Jan/Feb, April/May, July/August, and Sept/October) plus a directory issue published in January of each year by Lockwood Publications, Inc., 3743 Crescent Street, Second Floor, Long Island City, NY 11101, USA. Officers: Robert M. Lockwood, president and treasurer; Peter Messer, secretary. 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: Intl Surface Mail; US$89 per year; US$139 for two years; US$199 for three years. Intl AirMail; US$129 per year; US$199 for two years; US$289 for three years. Single copy price: US$15. An- nual Buyers' Guide & Directory: US$45 (plus shipping). Copyright © 2013 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. TI EDITORIAL

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