IQOS in America: Will it Work?


I was chatting with Tony from HeatNotBurnUK the other day about how the Heat-Not-Burn industry has been developing lately and it got me thinking about IQOS in America.

It’s coming on one year since IQOS was approved for sale by the FDA,

I was hopeful that maybe, just maybe, IQOS would become the next big thing in the US, thus propelling it, and the HnB industry, into global stardom just like the vape industry, but with that one-year mark quickly approaching I’m coming to accept what I feared would happen all along; IQOS would fail in the American market. It was inevitable.


What the American Market Means

When IQOS was first approved by the FDA back in April of 2019, it was a huge step forward for the industry. Suddenly the door was open to one of the biggest, most influential markets in the world.

As of 2018 approximately 34.2 million Americans smoked cigarettes. This is about 13.7% of the population. Numbers-wise this isn’t nearly as impressive as countries like Bulgaria where almost 40% of the population smoke, but numbers are not the sole factor that attracts companies to American soil. The American market is just as much about status and validation as it is consumer growth.

Conquering the American market is a marker of success. No matter the industry — pop music, food trends, new technology, etc. — being desirable to American consumers is taken as a symbol of validation. Even though the Heat-Not-Burn industry is steadily expanding in other parts of the world — in 2019 IQOS was launched in the GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, Philip Morris, Korea Tobacco & Ginseng just announced a partnership to promote Lil devices, and there are more HnB manufacturers popping up all the time — it hasn’t really gained that validation in America yet.

Why not?

Conquering the American market is a marker of success. No matter the industry — pop music, food trends, new technology, etc. — being desirable to American consumers is taken as a symbol of validation.

Part of this is because of issues we’ve discussed before; regulations of products make it impossible to provide the best selection, restrictions on advertising make it difficult to promote, etc. But I believe that these are not the only reasons.


“Tobacco Nation”

I have no doubt that if IQOS can overcome the issues stated above, it will become wildly successful in places like New York, Los Angeles, San Francisco, Chicago, maybe even Washington D.C. Those big metropolitans, where change is constant, advancement is inevitable, and money runs just a bit more freely. These places will be fertile ground for a device like IQOS.

But outside of these cities, I’m not so sure.

My family is from the Midwest. Michigan (MI) specifically. Tobacco is a big thing in this region of America. Despite smoking regulations, the number of smokers here is still quite high compared to the national average. In fact, Michigan is one of 12 states — along with Alabama, Arkansas, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Ohio, Oklahoma, Tennessee, and West Virginia — that rank the highest for number of adult smokers. Truth Initiative, a staunch anti-tobacco site, has dramatically dubbed this region “Tobacco Nation.”

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While we don’t agree with how Truth Initiative frames their research, their statistical analysis alone is quite accurate. They write:



“Twenty-one percent of Tobacco Nation’s adults smoke, compared with 15% of adults in the rest of the U.S. The region’s youth also smoke at higher rates compared with the average U.S. youth aged 12 to 17 residing in one of the other 37 states (10% versus 6%).

Not only does Tobacco Nation’s youth and adults smoke at higher rates, its residents also smoke many more cigarettes per capita annually (59.2 packs) than those in the rest of the U.S. (32.1 packs). In practice, this could mean that over a given year, a smoker living in Tobacco Nation could be inhaling over 500 more cigarettes than the average smoker in the rest of the U.S. “

SOURCE: https://truthinitiative.org/tobacconation


And these states are not the only ones. Most rural parts of the US have higher rates of tobacco usage than metropolitans, even those outside of Tobacco Nation — think rural North Dakota, Wyoming, South Carolina, etc.

Rural areas generate alot of revenue for big tobacco. Why is that?

Well one reason is that tobacco has historically been grown and processed in most of these states, so people have had easy access to it. Another is that cigarettes, on average, are cheaper in this region. Social acceptance plays a big role as well. If you see your family and friends smoking, there’s a pretty good chance you will too. But it goes deeper than that. There’s a cultural aspect to the way that these areas view tobacco.


The Marlboro Man in the Era of Change

In 1954, Philip Morris introduced America to ‘The Marlboro Man.’ When Marlboro was first launched in the 1920s it was promoted as a cigarette for women, since it had a filter. Due to this perceived femininity few men purchased Marlboro cigarettes, meaning that Philip Morris did not have access to more than half of American cigarette consumers. The Marlboro Man was created to amend that.

The Marlboro Man was a archetypal figure that existed in Marlboro advertisements. Often dressed like a cowboy, the Marlboro man was rugged, hard-working, and free. He was the embodiment of American values at that time, especially for rural Americans. The Marlboro Man was someone that consumers could both to relate to and aspire to be.

As a result tobacco become more than just a product for American consumers. It became a symbol.

The Marlboro Man was someone that consumers could both to relate and aspire to be.

It came to represent the values a person held and the characteristics they possessed. Suddenly, instead of just being a smoker, you were a Marlboro smoker. Men who smoked Marlboro were tough and strong, women who smoked Marlboro were modern and social, youth who smoked Marlboro were rebellious and cool. And these perceptions worked with more than just Marlboro. Other brands of cigarettes and different forms of tobacco also evoked alot of these same ideas.

Tobacco became both about the individual and the community. Tobacco usage almost always started with family or with peers. It was, and is still, used as a way to connect with people. Go to a diner and you could easily make friend with the guy at the next stool smoking a Marlboro Red. Gossip with the girl from HR during your smoke break. Smoke with the kids behind the school and you could join their group. In a weird way tobacco kind of gives people and ‘in.’ It tells you who you were and that you belong

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Some might think that what we’ve discussed no longer applies to American society, seeing as how many tobacco regulations have been introduced since the beginning of the 2000s — graphic warnings on cigarette packs, no more smoking sections in restaurants and bars, etc. Those people would be incorrect. I was in high school less than ten years ago and even then most of my peers believed that chewing tobacco was symbolic of becoming an adult — sort of like a rite of passage. Even now with there being a large population of vape users, traditional tobacco usage is still very visible in rural communities.

Make no mistake, people in rural America are well aware that tobacco can pose a risk to their health but these deep-seated cultural perceptions are hard to change, particularly in places where smoking, and other forms of tobacco usage, are still widely practiced. One study by the University of Southern Maine found that “while both urban and rural students perceived e-cigarettes to cause less harm than cigarettes […] rural students were significantly less likely than their urban counterparts to use e-cigarettes and more likely to use traditional cigarettes.” The same study believed that “cultural norms and values” were some of main the factors that influenced people’s willingness to give up traditional tobacco.


IQOS In America

Like I said above, I’m not completely denying the possibility that IQOS could be popular in the U.S. I just think that it would be difficult for IQOS to reach the same level of success as other harm reduction devices, seeing as the majority of potential IQOS users are located in areas with the least likelihood of actually accepting IQOS.

Not only does IQOS not fit with established tobacco traditions in rural America, it’s also expensive and largely inaccessible. Combine that with the fact that few people in America know about HnB to begin with and we can see the problem forming. If few people know about it, few people can afford it, and few people can get their hands on it; then few people are going to buy it. In rural America, enthusiasm about IQOS is not going to generated unless many people start using it.

If few people know about it, few people can afford it, and few people can get their hands on it; then few people are going to buy it.

So why did Philip Morris launch this way?

Well, unfortunately, alot of it was out of their control. Because the FDA did not full approve IQOS, PMI and their American sister-company Altria, were not able to promote IQOS as being a harm reduction device. IQOS also falls under the same restrictions as cigarettes meaning that the device cannot be promoted with radio or TV advertisements. This poses a real problem in trying to inform the public about IQOS.

The one decision that PMI and Altria had full control over though, was where IQOS would be launched. David Sutton, Altria’s spokesperson, revealed last April that the company chose Atlanta, Georgia as their one test market ” because it’s a tech-focused city with ‘several hundred thousands’ of adult smokers.” Atlanta is a big city, but no where near the size needed to generate a national trend over a new product. Georgia does have a higher smoking rate, but not high enough that it is included in Tobacco Nation. Moreover, out of the entire state of Georgia, Atlanta is the area with some of the lowest rates of adult smoking.

So why choose this area?

My guess is that the companies chose Atlanta, Georgia because it’s neither a metropolis nor is it rural.

I think that Philip Morris was afraid that if they introduced IQOS into a big city like New York or Los Angeles, where trends live and die in an instant and people tend to be alot more health conscious, that it might not get the favorable reception it needed. Then what would they have to show their investors? If they went the other way and introduced IQOS into one of the rural “Tobacco Nation” states, where they’d have a large consumer based, it likely would have tanked because of what we mentioned above. Moreover, if they introduced it into Tobacco Nation, and on the rare chance it was liked, they’d be loosing profits from their traditional cigarette products.

So what’s the compromise? Introduce IQOS into a city just large enough that word will spread, but just small enough that rural populations can still come and access it if they want. Introducing IQOS into Atlanta was a safe bet and, sadly, I think it might have doomed a product that already had little chance of surviving.

Introducing IQOS into Atlanta was a safe bet and, sadly, I think it might have doomed a product that already had little chance of surviving.


But What About Vapes?

Now you might be saying, ‘Hey wait! Vaping is big all across America, including rural America, so why can’t HnB be?’ Great question! Vaping is big across America. In fact many of the “Tobacco Nation”states have huge vape communities. But vaping and HnB are not the same thing.

The key difference between vaping and traditional tobacco usage is that vaping does not try to assume the role that traditional tobacco usage plays in American life.

Traditional tobacco usage — smoking, chewing, etc. — is all about a sense of self and a sense of community. Vaping is really like that. Vaping is not connected to any values, themes, or ideals and it doesn’t necessarily have to be a shared experience. At most, vaping is a way for a person to show that they are cool and trendy, but it does not impart any other characteristics onto the user.

What do we mean by ‘impart characteristics?’ Think of it like an Android device versus an Apple device. They are both cell phones, they both make calls, both offer internet access, both have apps, but we think of Android users and Apple users differently. We impart different characteristics onto them. Android users are often thought of as more simple, maybe even more traditional, whereas Apple users are vibrant and easily embrace change.

Heat-Not-Burn doesn’t impart characteristics either but it does encroach on the ones connected to traditional tobacco usage, particularly smoking. HnB changes the physical act of smoking by replacing the cigarette with a HeatStick and an electronic heating system. Physical differences may not seem important to the cultural tradition of smoking, especially since HnB still uses tobacco, but it is different. All those values linked to smoking would be gone with IQOS. If you replaced John Wayne’s cigarette with IQOS would we still think of him as having all the characteristics of a rugged American cowboy?

This is where vaping and Heat-Not-Burn are perceived very differently. Vaping can exist separately from ideas like The Marlboro Man, self-determination, fitting in to social groups — things that are intrinsically linked to traditional tobacco. HnB and IQOS cannot because they are essentially an advancement on smoking. That is why the success of vaping across both metropolitan and rural America does not necessarily mean the same will be true for IQOS.


My Completely Inexpert Opinion

Right now IQOS is just kind of there. It’s not making waves, it’s not asserting itself in the American market. Yes, it is a hard sell to begin with due to America’s cultural history with tobacco. No, I don’t think it would perform well in Tobacco Nation states. No, I don’t think it will ever reach the level of success that vaping as, but that doesn’t mean IQOS has to fail altogether.

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So what do I suggest as someone who is not a part of the tobacco industry but an avid watcher of it? Like I said above, I think launching IQOS in several large metropolitan areas, it could be a starting point. There would be a smaller number of consumers there than in Tobacco Nation states, but there would still be consumers. At least in metropolitans there wouldn’t be half as much competition with traditional tobacco products and there wouldn’t be nearly as much worry about the cultural aspect. It’s not a guaranteed success, but if picked up by enough people IQOS, and HnB in general, could become the newest trend in harm reduction devices.

More importantly, though, than just how to launch the device, I would suggest to PMI and Altria to start believing in their product. If they are seriously committed to the idea of a smoke-free future, then launch IQOS in a way that enables its success. For if PMI and Altria’s strategy towards IQOS does not change soon, IQOS really will fail and the small chance the entire HnB industry had for success in America, will be squandered.

If [PMI and Altria] are seriously committed to the idea of a smoke-free future, then launch IQOS in a way that enables its success.



Let us know what you think! Am I completely off base in my assessment? Should I have more hope for IQOS? Or is it time we all faced reality?

8 Responses

  1. SenatorX says:

    Any tips for a guy who is trying to get heat sticks. I have found a reliable company based out of Cali, but it is $89 per carton

    • Zach says:

      What is the website selling from Cali if you don’t mind me asking?

    • Heat180 says:

      Hi there, sorry for the late reply! We’d recommend using Personal Shopper Japan. Personally I and the other members of the Heat180 Team find that the Japanese HeatSticks are better than what you get elsewhere in the world. There’s also a larger selection of flavors. According to our experience Personal Shopper knows alot about the flavors and can give recommendations. As well he can purchase the smaller packages (ex. 10 or 20 pack) instead of the 50 packs. We’ve used their services before and have always had really good luck! What’s more if you let him know that you heard about him on Heat180.com you get 888 yen off your first purchase of HeatSticks, which is about $8USD. I hope that helps! Feel free to send us an email if this suggestion doesn’t work out and we’ll be happy to keep looking for you!

      The Heat180 Team

  2. SenatorX says:

    Wow, this post was soooo informative!!! I am currently a recent convert to iQOS and live in Hawaii. As you guys know it is VERY VERY difficult for me to get (unless I know someone traveling overseas). It’s frustrating because seems easier to get illegal drugs than it is to get heat sticks, lol. I was always wondering about Altria’s systematic approach to the US market.

  3. Alex says:

    I think you’re widely off base. It’s been lunched in Atlanta and Richmond as test markets, from which they can lean ahead of broader expansion. This is the approach that has been taken in every single IQOS market. Don’t forget, it only launched in the US in, what, October? In Japan it was initially launched din just Nagoya and, I think, Sendai. In Italy in Milan.

    In the UK, IQOS first launched in London in November 2016 and grew very gradually. Right now it’s not exactly a mainstream brand, but considering that it is at a significant disadvantage relative to e-cigarettes in terms of marketing, I think it’s been a success. I regularly see people using IQOS on the streets of London. Interestingly, the city which has the largest IQOS presence in the UK outside of London happens to be Bristol, which is also expected to be the first city to go smoke-free, so perhaps the interest is not in targeting the biggest smoking markets, but retaining the fastest declining ones.

    • Heat180 says:

      Interesting take. I think test markets are important and I’m not criticizing their choice to launch IQOS in a test market first, I simply believe that they chose the wrong test market. In the biggest smoking market, the Tobacco Nation states, IQOS would probably fail because of the cultural attitude towards smoking. If they chose a fast declining market, big metropolitans like New York or Los Angeles, then they’re taking a gamble. This is why I think they chose a market that is neither the biggest nor the fastest declining. It’s a safe bet.

      I believe that PMI/Altria realize how important the American market is to creating a completely global brand but they’re afraid that what happened in Canada might happen in the US also. IQOS has been available in Canada for some time now but it’s not mainstream in any way. To date, I’ve only ever seen one person using IQOS and that was in a metropolitan city; Toronto.

      Perhaps you’re right and it’s too early to judge, but culture doesn’t change very fast on this side of the pond, especially in rural areas. This is a big obstacle that they are going to have to consider if they do decide to start expanding availability within the US.

      • Alex says:

        Sorry I forgot to reply to this. I concede your point that it is strange not to start with, say, California. If I had to do it, that’s where I would start. At the same time, I think testing it out in a market that isn’t fast declining is also a valuable exercise, ie finding an approach to reach those who are less likely to quit cigarettes.

        I also think that the reason for not launching in California or New York might be more prosaic, these places have extensive indoor smoking bans which may restrict ability to sample the product instore (I could be wrong, perhaps sampling instore is permitted).

        I think the challenges in Canada are very different to those in the US. Canada has a much harsher regulatory environment – in the US they can offer discounts, run print ads (let alone point of sale ads). At the same time, they can’t afford to go too big too soon since, as you point out, the US is huge and it will take time to have the entire market catch-up.

        They haven’t had success overnight in the UK either – latest results had them at just over 1% share in London, this more than 3 years after launching. But I’m definitely seeing more and more people using iqos. I think the UK is quite similar to Canada in terms of a total advertising ban, though Canada goes much further (plain packaging, not store signage).

        Finally, just read today that Martin King is now going to be CEO of the newly created PM America. So I think they have very big plans for the States (else it’s strange to create a new operating division for a country where they don’t even have a presence). https://www.cnbc.com/2020/03/02/philip-morris-creates-new-americas-ceo-role-to-ease-roll-out-of-iqos.html

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