Stefan Bomhard, who joined Imperial Brands as CEO in July 2020, has put in place a plan that will invest primarily in the top five cigarette markets: Australia, Germany, Spain, UK and US. In addition, the plan aims to tailor next-generation products to consumer preferences, strengthen the company’s sales force by attracting new talent, and change incentive structures.
The plan is the culmination of a six-month review and also said the company will exit some smaller markets where no further growth is expected. In addition, Imperial will redefine its Next Generation Product (NGP) strategy to redirect its resources to develop such products in Europe and the United States.
Several e-cig targets have been missed in the past five years
Bomhard said that as heated tobacco products gain traction in Europe and generate higher margins than in the United States, Imperial will focus on its Pulze device in Europe and on developing vaping products in the States. -United. Targets for next-generation products, primarily e-cigarettes, had been lowered after missing several sales targets over the past five years. “The company reduced the value of this business by 124 million pounds ($ 170.02 million) last year after sales fell 27% in 2020,” Reuters reported.
âThe new strategy will place a renewed emphasis on a more focused group of priority tobacco markets and more disciplined execution in NGP,â said Bomhard. “We anticipate that the new plan will provide a trajectory of gradual improvement in net sales over the five years with a compound annual growth rate of 1-2% starting in fiscal year 2020-2025.”
COVID-19 has led to increased smoking rates
Meanwhile, towards the end of 2020, the tobacco company had readjusted its revenue forecast for the full year to reflect the increase in cigarette sales brought on by the ongoing pandemic. A spokesperson for the company said consumers appeared to spend more on cigarettes.
Of course, these numbers are not surprising and are precisely the reason why countless public health experts have argued that shutting down vape shops while leaving regular cigarettes available for sale would be a disaster. A British article published on BJGP Open had in fact warned that the COVID-19 epidemic could increase smoking rates among current and former smokers.
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