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

The Wrong Brief

After more than a decade of heated tobacco product (HTP) innovation, a hard truth remains: the industry still hasn’t created a product that most smokers want to switch to. While the latest systems are technically impressive, they fail to address the most fundamental need of adult smokers: a safer product that replicates the experience of the one they’re used to.

Despite billions in investment and notable successes such as IQOS, adoption remains limited. Why? Because the tobacco industry is solving for compliance, not experience. It’s focused on technology and regulation, while largely ignoring the sensorial, emotional, and habitual drivers behind smoking. The result: over-engineered products that don’t deliver the simplicity, satisfaction, or ritual that smokers still crave.

A History of Missed Opportunities

Heated tobacco products have evolved significantly from early products like RJ Reynolds’ Premier and Eclipse in the late 1980s and early 1990s, which failed due to a number of issues, including poor sensorial delivery. PMI’s later device-based products, Accord and Heatbar, were technological advances but still fell short on user experience.

The real commercial breakthrough came with IQOS around 2015. PMI reports approximately 34 million global users¹ as of mid-2025, with around 10 million in Japan, where HTPs are now used by nearly 48% of smokers. South Korea has also seen substantial uptake, growing from 2.2% in 2017 to 18.4% in 2024². Meanwhile, the UK market remains smaller and less transparent, and in the US, IQOS only recently resumed rollout, targeting a 10% market share by 2030. But let’s not forget, in the grand scheme, that 34 million is only approximately 2.5% of the global smoking population of 1.2 billion.

Moreover, most IQOS users remain dual users. A 2025 feature by BBC Future highlighted the challenge³. even among those who adopt HTPs, many continue to smoke. So, although HTPs are indeed commercially successful in some regions, the category is still far from delivering on its full public health promise.

Designing for Smokers, Not Regulation

Ask smokers what they want, and they’ll say the same thing they’ve said for 40 years: ‘a safe cigarette’. Not a vape. Not a gadget. Not a complicated ecosystem. They want familiarity, not friction.

Every deviation from that, every step that adds complexity or reduces satisfaction, creates a barrier to switching. And while regulators may reward harm reduction, smokers care only about the experience. Until the industry designs for that, it will continue to miss the mark.

The Real Challenge is Physics

In a nutshell, the issue is simply that all current HTP systems heat too much tobacco at once. Solving this requires a rethink of thermodynamics: how we heat small portions of tobacco sequentially, to mirror the way a cigarette behaves.

However, this isn’t just an engineering challenge around miniaturization and precision. It’s also a product design challenge that demands a radically simpler user experience.

Innovation Alone Won’t Fix It

We’re often asked why newer technologies like induction, infrared, or nanomaterials aren’t the answer. They do offer advantages – cleaner heating, faster startup times, and reduced maintenance – but they fail to address the core issue: these systems still heat all the tobacco at once⁴ and, as a result, the user experience still suffers from the same inconsistent delivery⁵ that ultimately disappoints smokers.

Without a shift in how the product works at its core, we’re just making sleeker versions of the same flawed idea. True innovation means rethinking the entire experience – not just refining the tech.

Manufacturing at Scale Without Sacrifice

A redesign can’t be just technically elegant. It needs to be manufacturable at cigarette scale of 20,000+ sticks per minute and cost-competitive with existing products. It must avoid materials that create ESG risk (like metal strips or embedded electronics) and minimize complexity across the supply chain.

Right now, many device-dependent systems rely on Chinese OEMs for production. That introduces cost, IP dependency, and geopolitical fragility. A next-gen solution should be simple, scalable, and ideally, device-free.

Sustainability That Doesn’t Compromise Experience

Most smokers don’t care deeply about sustainability. But regulators, governments, and public sentiment do. So, the next generation of HTP needs to build ESG principles into the core of the product without asking users to compromise.

That means no hard-to-recycle materials, minimal electronics, and biodegradability wherever possible. It’s possible to design a satisfying, cigarette-like experience that doesn’t create new environmental liabilities. But it requires going back to the fundamentals.

Conclusion: It’s Time to Start Again

The truth is simple. Smokers don’t want devices. They want a safer cigarette. Heated tobacco products, as they exist today, don’t deliver that. But they could.

With the right brief, the right team, and a fresh look at the physics, we can build something that finally makes switching make sense.

But Can One Company Solve it Alone?

Here’s the hard truth: this isn’t a challenge that one organization can fix in isolation. Developing a next-generation HTP product that delivers a consistent, satisfying, and cigarette-like experience while also being scalable, sustainable, and compliant demands a level of investment, cooperation, and shared standards that the industry isn’t used to. The future of heated tobacco won’t be built by one player. It will be shaped by shared platforms, harmonized standards, and industry-wide collaboration, much like the models already proven in the EV and pharma markets. It will be shaped by those who are bold enough to work together.

Receive further news from our THR team at CDP

References

1. Marking the 10-year anniversary of PMI’s HTP development efforts): “Philip Morris International (PMI), 2024. Celebrating 10 years of smoke-free progress. [online] Available at: https://www.pmi.com/our-progress/celebrating-10-years-of-smoke-free-progress [Accessed 3 Sept. 2025].
2. IMARC Group, 2025. Heated Tobacco Products Market Report by Product (Stick, Leaf), Category (Regular, Flavored), Distribution Channel (Online, Offline), and Region 2025-2033. [online] Available at: https://www.imarcgroup.com/heated-tobacco-products-market [Accessed 21 Aug. 2025].
3. BBC Future, 2025. Are heated tobacco products a new health risk? [online] Available at: https://www.bbc.co.uk/future/article/20250501-the-truth-about-heated-tobacco [Accessed 3 Sept. 2025].
4. Farsalinos, K.E., Yannovits, N., Sarri, T. and Voudris, V., 2018. Nicotine Delivery to the Aerosol of a Heat-Not-Burn Tobacco Product: Comparison with a Tobacco Cigarette and E-Cigarettes. Nicotine & Tobacco Research, 20(8), pp.1004–1009. [online] Available at: https://academic.oup.com/ntr/article-abstract/20/8/1004/3868870 [Accessed 3 Sept. 2025].
5. Truth Initiative, 2024. Quitting Tobacco: Facts and Stats. [online] Available at: https://truthinitiative.org/research-resources/quitting-smoking-vaping/quitting-tobacco-facts-and-stats [Accessed 3 Sept. 2025].

The Paradox of Progress

It’s been over a decade since the new generation of tobacco and nicotine Reduced Risk Products (RRPs) hit the market as part of a rethought ‘harm reduction’ approach. These include everything from sleek tobacco heating products (THPs) like IQOS and Glo, to the myriad of e-vapour devices (vapes) offered by the likes of Vuse and Juul, and the modern oral nicotine formats (pouches) from brands that include Zyn and Nordic Spirit. And yet, despite being billed as the answer to the ‘smoking problem’, global adoption is disappointingly low.

PMI proudly states they’ve converted over 30 million smokers to IQOS, and that is a very significant achievement, but in the grand scheme, that’s approximately 0.25% of the global smoking population of 1.2 billion. Even if you look at key developed markets like Italy and Japan, where IQOS is dominant, it’s still less than 15%* of smokers, on average. And it’s a similar story for vaping and nicotine pouches.

*It’s difficult to provide accurate figures because manufacturers’ estimates and those provided by independent research differ significantly. Moreover, it’s clear from both sources that the majority of IQOS users still smoke (‘dual use’). Consequently, we are using an average from both for smokers who only use IQOS (‘solus use’).

Why This Question Matters Right Now

Whilst Big Tobacco companies say they are happy with the progress they have made so far towards a future beyond combustible tobacco products, other stakeholders aren’t so convinced.  Regulation is tightening in every RRP category and there are increasing moves towards new forms of prohibition. Disposable vapes are getting banned in the UK and some European countries appear likely to follow. Public health watchdogs and regulators are taking aim at youth access, ‘child-friendly’ flavours, and even the sustainability of devices around batteries and recyclability of consumables. Investors are beginning to ask harder questions about long-term profitability in a world that’s slowly but surely closing down more and more RRP options on the basis that they’re just too risky.

This isn’t just a theoretical challenge – it’s a business imperative.

The Elephant in the Smoking Room

So, what’s really stopping most smokers from making the switch?

It comes down to a simple truth: these RRP products are not what smokers really want. Smokers have been clear for a long time that they want a safe (or at least much safer) cigarette. That hasn’t changed much in the past 3 decades, (except for the more recent request that it’d also be good if the secondhand smoke didn’t bother other people).

But why don’t THPs and vapes provide the desired ‘safer cigarette’ experience? Let’s start with the ‘taste’. Not satisfying – especially when benchmarked against that first cigarette of the day with a cup of coffee. And smokers aren’t just looking for a nicotine fix. They’re after a much more holistic experience, but one that is also convenient and flexible enough to fit the needs and the environments in which each smoking ‘moment’ takes place. This is where device-centric THPs and vapes fall flat for anyone except a minority of smokers.

Devices need to be turned-on, programmed and activated with screens and buttons. And they also need to be charged, maintained and cleaned. It’s tech, not tobacco. And devices don’t easily lend themselves to the creation of satisfying rituals. Think about all the behaviours around unwrapping a fresh pack of cigarettes, peeling back the foil, lighting-up, the satisfaction that comes from the familiar taste, the throat hit, the sensation as the nicotine is absorbed into the body, the slow, measured burning-down of the stick, the final, decisive stubbing-out. These interactions and cues are what define each moment. And the moments matter – they define the rhythm of the smoker’s day.

One of the other important (though largely underappreciated) differences between THP or vape products and cigarettes is the commitment. Smokers might be loyal to brands, but they could always say that they were no more invested in the category than their last purchase of a pack of 20. This is arguably one of the defining characteristics of a FMCG product. THP and vape products, on the other hand, typically require consumers to invest in a system that locks them into a limited range of product options and reinforces the idea that the RRP user is now committed.  It’s one of the key reasons disposable vapes and nicotine pouches are so appealing.

Socially, smoking may be stigmatised, but RRPs haven’t managed to win over the court of public opinion either. If anything, vapes have generated their own controversies concerning youth uptake or the misinformation around the health risks of e-liquids (and nicotine pouches are increasingly being singled out for similar reasons). Regulators are lumping everything together under one dark cloud. Even well-intentioned alternatives that aren’t appealing to underage consumers or irresponsibly marketed are being treated as the same.

Basically, each type of RRP offers a different trade-off in terms of satisfaction, usability, and social acceptability. But most smokers don’t want a new experience. They want the old one, just safer (and ideally more considerate).

The China Question

So how did an industry with huge resources, world-class capabilities and decades of insight into what consumers wanted get caught out?

Perhaps Big Tobacco got distracted. Combustible innovation had long been incremental. Product development cycles grew longer and more risk averse. Meanwhile, disruptive innovation came without much warning from outside the industry and tobacco firms, more accustomed to the slow grind of regulatory sparring, found themselves scrambling to catch up with more agile Chinese competitors who didn’t play by the rules.

And when they did react, Big Tobacco focused on reinventing the product but also quickly moved away from trying to better replicate the smoking experience in favour of matching what the upstart vape manufacturers were doing. More recently, it has focused on volume over value – switching to buying off-the-shelf solutions versus the unpredictability of trying to create new products from scratch. Instead of reimagining how to replicate or improve on the smoker’s experience, it opted for me-too and copy-paste.

Focus on the Experience.

So what can be done?

Start by remembering what smokers want: a simple, convenient, low-commitment product (remember the FMCG point) that feels familiar but doesn’t harm them or others. That means designing for ritual. For anticipation. For satisfaction (oh, and it probably shouldn’t involve an electronic device…). The first use should be intuitive, not intimidating. And whilst many RRP users like the new world of non-tobacco flavours, the remaining majority of smokers still crave something that better replicates the overall sensorial experience of the thing they want to stop using. Look to the alcohol and coffee industries. People don’t just drink – they seek-out meaningful, real experiences. These categories build consumption around peak moments. Big Tobacco can do the same, if it stops chasing gadgets and starts seeking human connection built around much simpler products.

Break Free from the Tech Trap

The race to create device-centric THP and vape systems has had the unintended consequence of handing the advantage to Chinese contract manufacturers. When your key suppliers control what you offer your consumers, innovation is going to suffer. The focus on hardware has also created an IP arms race. One reason PMI dominates THP (apart from the billions it invested in building its IQOS brand), was its successful ring-fencing of key IP around more efficient THP heating technology. That leaves its competitors boxed out.

But that doesn’t mean they should throw in the towel. We believe new technologies and innovation can still unlock new, potentially more competitive market positions – if it’s aimed in the right direction.

Rather than chasing better hardware, focus on better, more convenient experiences. More engaging rituals. Products that resonate emotionally, not just functionally. Understand the nuance, the feel, the moment.

The Clock Is Ticking

Time is running out. Regulation is clamping down. Consumers are having doubts. And investors are asking for more than good intentions.

There’s still a window to make RRPs what they were always supposed to be: viable, scalable, appealing alternatives to smoking. But only if the industry rethinks and shifts gears.

The question isn’t whether RRPs can work. It’s whether Big Tobacco companies will come round to an approach that should be less about ‘safer tech’ and more about FMCG fundamentals.

Receive further news from our THR team at CDP

REFERENCES:

[1] PMI IQOS user data: https://www.pmi.com/investor-relations/reports-filings
[2] Disposable vape bans: https://www.bbc.co.uk/news/articles/cd7n3zyp114o
[3] Vaping youth uptake: https://www.cdc.gov/tobacco/about-data/surveys/national-youth-tobacco-survey.html