February 1, 2021
Imperial Brands, owner of vape brand Blu, is “resetting” is next generation products strategy with a focus on heated tobacco in Europe and a particular focus on vape in the US market.
The move comes after disappointing vape sales in the first half of 2020 which led to a strategic review of the company’s next generation products. First half of results (ending 30 September), saw net revenue from Imperial’s next generation products declined by 43 percent, followed by a more modest decline in the second half of the year of nine percent. This meant an overall fall for 2019/2020 of 27 percent.
In a report released last week, the company said: “Our investment will be disciplined and based on detailed market testing. Our aim is to develop a sustainable NGP business that supports our ESG agenda by making a meaningful contribution to harm reduction.”
Imperial Brand’s oral nicotine business will remain focused on its existing markets within Europe.
Meanwhile the company announced it will refocus investment on key combustible cigarette markets, including US, Germany, UK, Australia and Spain. The company says it has “developed highly detailed brand and market plans to support this approach and will increase investment behind a focused set of operational levers to strengthen performance and unlock value”.
Stefan Bomhard, chief executive of Imperial Brands said: “We have undertaken a comprehensive strategic review, examining all opportunities for unlocking value. This process has reinforced my view that the group has solid foundations on which we can build a better and stronger business. Our new detailed five-year plan sets out clear strategic priorities, which will drive targeted investment behind those markets and brands with the greatest opportunities for value creation. We have put the consumer at the centre of everything we do and are beginning to reshape our culture to support the new strategy. This will improve our ways of working and create an agile, collaborative and performance-based business that will deliver a stronger, more consistent performance.”