Phillip Morris COO: Juul's overseas expansion hasn't hurt the cigarette giant
Upstart Juul’s entry into Europe and Asia doesn’t have legacy smoking company and major overseas player Philip Morris International (PM) too hot and bothered.
“We have not seen any impact on our business [from Juul’s international rollout] at least at this stage,” said Philip Morris International Chief Operating Officer Jacek Olczak on Yahoo Finance’s ‘The First Trade.’
Armed with a $12.8 billion capital infusion from now 35% owner Altria (MO), Juul hasn’t hidden its desire to take its mostly U.S. brand international to drive sales. In the past four months alone, Juul has debuted in the Philippines and South Korea.
That comes on the heels of Juul entering England and Scotland last summer.
“The way we are looking at this is that Juul is just offering another alternative to smoking. There are many other manufacturers of e-cigarettes, including our own electronic cigarette platforms. I think there is plenty of room for a number of solutions which I believe if properly designed and manufactured and marketed, do offer a great choice for adult cigarette smokers,” Olczak said.
Taking on Juul in the US
Philip Morris’ e-cigarette product IQOS is marketed in Europe, Japan and other international markets primarily under the HEETS label. The company said it finished the second quarter with 11 million people using IQOS and that it grew market share in the e-cig category versus the first quarter.
After receiving approval by the U.S. Food & Drug Administration on April 30, Philip Morris will soon launch Juul rival IQOS in the U.S. The initial launch market is expected to be in Atlanta.
“So we expect the U.S. to perform quite well,” Philip Morris Chief Financial Officer Martin King told analysts on a mid-July earnings call about IQOS in the U.S.
Added King, “I mean, we would expect it to be faster on average than the EU has developed. I mean I think you have to be realistic. I wouldn't assume that it’s going to take off like Japan did or Korea initially et cetera, but we expect U.S. to have very solid results.”
Brian Sozzi is an editor-at-large and co-host of The First Trade at Yahoo Finance. Follow him on Twitter @BrianSozzi
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