Why so few smokers have transitioned to Reduced Risk Products (and what the industry can do about it)

This article summarises our recent analysis of why so few smokers have transitioned to reduced-risk products (RRPs). More importantly, it moves beyond diagnosis to set out a clear strategic roadmap for what must now change if RRPs are to become a credible alternative rather than a solution that has yet to live up to expectations.

Where Are We Today?

Market Reality

• Despite over a decade of innovation and major investment, global RRP (heated tobacco, vapes, and nicotine pouches) adoption remains low (c. 2.5% of 1.3B smokers). Most smokers continue to favor cigarettes.
• Even in mature markets (e.g., Japan, Italy), sole use of RRPs rarely exceeds 15% – well below expectations. Dual-use (RRP + combustible) dominates, further diluting harm-reduction objectives.
• Governments are increasingly sceptical of RRPs due to youth uptake concerns. Disposable vapes face bans; nicotine pouches and e-liquids are under intense scrutiny.
• Despite resilient industry share prices, investors are increasingly demanding proof of value and scalability for RRPs, not just good intentions.
• Cigarettes offer clear barriers to entry (brands, supply chains, regulation). RRPs lack comparable moats, leaving Big Tobacco exposed to nimble competitors and margin erosion.

Root Problem

• There remains a fundamental misunderstanding of smoker psychology: RRPs aim to reduce harm, but fail to replicate the emotional, sensory, and ritualistic satisfaction of smoking and its convenience.
• Most smokers don’t want a new product – they want their existing experience made safer (and more socially acceptable).
• Device-centric solutions miss the emotional core of smoking, disrupt familiar rituals, and add friction via charging, cleaning, and unintuitive tech interfaces.
• More recently, innovation has focused on fixing RRP friction rather than delivering a superior smoking alternative.

Systemic Missteps

• Device-centric innovation ceded control to Chinese OEMs and fractured the consumer understanding of inhalable categories (heated tobacco, vapes).
• An IP arms race between Big Tobacco players limited consumer choice and reduced overall appeal of RRPs.
• Industry underestimated the impact illicit products and poorly enforced trading standards would have on regulatory sentiment.

So, What Can The Industry Do About It?

The first order of business is to develop a new ‘Strategic Roadmap’.

Big Tobacco needs to reclaim RRP product leadership by returning to what the industry knows best: FMCG agility, consumer insight, and emotionally resonant brands.

Firstly this means thinking less like Samsung and more like Starbucks: going back to focusing on creating emotionally satisfying alternatives in key smoking ‘moments’, not one-size-fits-all functionally safer gadgets.

Secondly this means remembering that smokers crave familiarity in terms of ‘taste’, satisfying nicotine delivery, hand-to-mouth gestures, and ritual. Big Tobacco should concentrate on replicating ‘the cigarette experience’, not reinventing it.

Thirdly, Big Tobacco needs to grasp the nettle and decide whether it’s going to leverage the trust and value of established tobacco brands to make RRPs more relevant or try and create new brands from scratch that are unlikely to have any meaning to smokers.

The next thing Big Tobacco should do is get very clear on the key technical & development JTBDs.

The first is that to innovate a superior inhalable product that delivers FMC-like nicotine, ‘taste’, and delivery profile, new technologies are required that overcome the fundamental issues of heated product physics (thermodynamics / thermokinetics) and heater control. This can be done.

The second is how to make suitable consumables at the scale, speed, and cost required – ideally with enhanced ESG. Again, this is not rocket science.

The third is to work out how to deliver the whole experience in a product that is familiar and reassuring to smokers. This means designing intuitive, non-device-centric RRPs that fit seamlessly into a smoker’s life, mimic the rituals they value, and offer meaningful, low-friction, FMCG-like accessibility.

This is not just about traditional ‘look and feel’ considerations but also, crucially, which additional design elements (product semiotics and brand cues) are required to deliver a truly appealing consumer offer that can serve as a genuine alternative to cigarettes.

To achieve a step change in the rate and overall number of smokers transitioning to RRPs requires truly disruptive ideas that are also brilliantly executed and presented.

And Finally

Big Tobacco needs to get on with it! The window to regain RRP leadership is closing. Big Tobacco is losing the RRP argument with regulators. Additionally, Chinese OEMs are poised to take over. For industry examples outside tobacco, look at Green Technology, BEVs, Rare Earths, and AI.

In the increasingly fast-moving RRP categories sector, hesitation is a liability. If you are a senior leader serious about maintaining or regaining your competitive edge and avoiding costly regulatory missteps, you must act quickly.

Let’s schedule a high-priority discussion to ensure your next move is your best move.

Receive further news from our THR team at CDP