CELEBRATING 10 YEARS
OF SMOKE-FREE PROGRESS
To mark the 10th anniversary of our leading heated tobacco product (HTP), we’re releasing a compelling series of films capturing the journey of innovation behind our transformation—and the future progress required to achieve our smoke-free ambitions.
“PMI: A Story of Innovation” consists of five episodes, to be released weekly, featuring senior leaders and PMI experts reflecting on the launch of our HTP, our successes to date, and opportunities for further growth.
Full of candid revelations, you’ll discover how we approached solving the problem of smoking, the early challenges we faced developing our flagship product, and the learnings we applied to propel us forward.
Episode 3 – “We’re Going to Launch”
Focusing on getting IQOS ready for launch in Japan—including agreeing on a suitable name for the product—and the pain points of the Italy pilot, where consumer uptake was slow.
Episode 3 – “We’re Going to Launch”
André Calantzopoulos, Chairman of the Board, Philip Morris International (PMI), sitting in an office, speaking to camera:
We overestimated our capabilities to commercialize this product
and underestimated all the things that may go wrong.
Music rises and graphics appear showing early designs and the evolution of PMI's heated tobacco products from 1990 to 2023.
Text shows title of video: PMI - A Story of Innovation - #03: We’re Going to Launch
Bin Li, Chief Product Officer, PMI, speaks:
How do we turn a brilliant innovation into a real, reliable consumer product?
Moira Gilchrist, Chief Communications Officer, PMI, sitting in an office, speaking to camera:
André Calantzopoulos went to investors in one of the investor calls
and told them that we would be launching our heated tobacco product
the following year on the market for real consumers to buy.
We felt we did not have a chance to be able to make it happen.
But I think, looking back now, he did that very purposefully
because we were tweaking everything and we would never have been satisfied.
So, I think he put a stake in the ground to say it would be done in the following calendar year.
Scott Coutts, Senior Vice President, Operations, PMI:
We’re going to launch and we’re going to make mistakes,
and we need to be able to do that in a small enough scale in each of the different launch markets,
but at the same time having the ability to be able to quickly turn on the overall supply chain, to be able to react to that.
Graphic appears showing a rocket drawing and an on switch.
Text reads: We’re going to launch in a small enough scale. Ability to be able to quickly turn on the overall supply chain.
Stefano Volpetti, President Smoke-free Inhalable Products & Chief Commercial Officer, PMI, speaks:
When you are trying to do something that nobody has ever done before,
the probability that you will fail, the probability that it will be two steps forward, one step backwards, is very, very high.
Lisa Hook, Member of the Board of Directors, PMI, speaks to camera:
In the real world, in the operating world, we knew that these products
were so compelling that it was just a matter of time before they succeeded.
Serge Maeder, Global Head of RRP System Innovation, PMI, sitting in an open-plan office, speaking to camera:
And I think, when we finally put this product on the market,
it was a big relief to everybody because, the day you on are the market, this is no longer confidential.
Graphic appears showing for sale sign and text reads: The day you on are the market (FOR SALE) = no longer confidential.
Graphic appears showing the Cube, PMI’s R&D center in Neuchâtel, Switzerland,
Text reads: We can finally explain what we were doing!
Serge Maeder, voice over graphic:
And we can talk to anybody about what we do.
We can finally explain to our friends and family what the hell we were doing in this Cube.
Moira Gilchrist, speaking to camera:
And we made it… and we made it with three months to spare.
So, I'm pretty happy about that.
Video cuts to the Cube
André Calantzopoulos speaks:
It has been very difficult to find a name.
Jean-Claude Schneider, Global Head, New Business Opportunities, PMI, sitting in an open plan office, speaks to the camera:
What is a name, word that can be really international?
Urs Bringold, Vice President Content & Owned Media, PMI, speaks:
We had a name that was promising and interestingly it was not IQOS…
it was a couple, but it was IQO. Just completely made up names, right?
They don’t stand for anything, but you could associate something with it.
And then we started to add letters in front of it –
and at the end, so BIQO, IQOT, and we ended up with IQOS.
That was the birth of the name then that stayed till today.
Graphic shows first propositions of device names before IQOS.
Text reads: We started to add letters… IQOS… the birth of the name.
Video cuts to Mount Fuji and busy Japan
André Calantzopoulos speaks:
We actually launched commercially in Japan.
Why Japan?
For a very simple reason: Japan had a history of consumers accepting innovation.
Graphic shows Mount Fuji, Japan. Text reads: Japan had a history of consumers accepting innovation
Scott Coutts says:
Consumers demand innovation to be relevant.
So, they have this expectation of product innovation, creativity, bringing new things.
Shea Lih Goh, President, PMI Japan, speaks to camera:
There is a very strong culture of being very considerate to others.
These are the kind of the product benefits that really resonated with Japanese consumers.
Mimi Kurniawan, Chief Diversity Officer, PMI, speaks:
When people saw the product, people said, ‘This is truly the difference that drives us to achieve our bold vision.’
Graphic shows IQOS product.
Text reads: This is truly the difference that drives us to achieve our bold vision.
Shea Lih Goh speaks:
Plus, also, we had a favorable regulatory environment,
which allowed us to do a lot of communication and a lot of trials with the consumers at the start.
Karlygash Bismeldinova, AGC, Commercial Development Law, PMI, speaks to camera:
We didn’t know what would be the reaction.
Yes, of course we did studies.
We tried to test and see what consumers would think about it. But you never know.
You cannot be sure until you launch.
Moira Gilchrist speaks:
We were sent photographs and videos of what was happening on the ground and,
oh my goodness, we were in tears to see consumers queuing round the block to get into the store and find out about this product.
And then we moved our focus and attention to Italy, which had been the second pilot launch market.
And it was an utterly different story.
Graphic shows the Colosseum in Italy and a scooter.
Text reads: It was an utterly different story. 2nd pilot launch market.
Video cuts to Milan Cathedral and busy streets.
Jacek Olczak, CEO of PMI, sitting in an office speaking to camera:
In the early days in Milan when we started, were, I mean,
from today’s perspective, they were pretty bumpy.
Moira Gilchrist speaks:
It was really hard to make communications in Italy
because it’s not permissible due to the regulation.
Scott Coutts speaks:
It took time, it took patience to be able to bring new-to-world products to the market
and have adult consumers actually understand, ‘What's in it for me?’
‘How do I use the product?’
Moira Gilchrist speaks:
So, of course, there wasn’t the replication of what we had seen in Japan right on our doorstep in Italy.
So, we were like, ‘What is going on here? What’s wrong?’
André Calantzopoulos speaks:
What we had understood less is how in actual use by hundreds of thousands of people, what problems may occur.
Graphic appears showing the text: In the next episode.
Stefano Volpetti speaks:
We will go smoke-free and this is the direction, no way back.
Serge Maeder speaks:
It was a very, very bold move.
Shea Lih Goh speaks:
There were a lot of articles criticizing us.
Moira Gilchrist speaks:
The wait, I have to say, was excruciating.
Philip Morris International logo appears with text underneath reading:
Episode 4 coming soon!
Episode 2 – “We Never Wavered”
Episode 2: “We Never Wavered”
André Calantzopoulos, Chairman of the Board, Philip Morris International (PMI), sitting in an office, speaking to camera:
The moment you can, you have a good chance to address the problem of smoking,
then you should try.
Obviously, there were much more question marks over whether this is feasible.”
Music rises and graphics show early designs and the evolution of PMI’s heated tobacco products from 1990 to 2023.
Text shows title of video: PMI - A Story of Innovation - #02: We Never Wavered
André Calantzopoulos continues:
At the beginning, we had a number of projects.
Serge Maeder, Global Head of RRP System Innovation, PMI, sat in open-plan office with mountains in the background, speaking to camera:
We had examples of products that heated tobacco,
but didn’t really work or didn't meet consumer expectations,
so we really needed to invent something new.
André Calantzopoulos, speaking to camera changing to voice over graphic showing cigarette photo and text:
For me it was more promising. Looks like a cigarette.
For me, it was more promising if we could get the product that looked like a cigarette.
Urs Bringold, VP Content & Owned Media, PMI, speaks:
There were attempts before to construct things:
Cigarettes with charcoal tips and all that,
and they were all a complete commercial failure.
André Calantzopoulos:
We kept this project alive for many years, hoping we will find a solution.
Serge Maeder:
So, IQOS as it is today, was more a plan B
in case the effort to develop something like a stick fails.
Video cuts to the outside of The Cube research and development center in Neuchâtel, Switzerland.
Bin Li, Chief Product Officer, PMI, speaks:
The beautiful Cube in Neuchâtel was built for the sole purpose
of developing IQOS in a protected environment.
Moira Gilchrist, Chief Communications Officer, PMI, sat in an office, speaking to camera:
So, we were this little funky group of people
working on this project that nobody in the company really knew about.
Jean-Claude Schneider, Global Head, New Business Opportunities, PMI, sat in open plan office, speaks:
Having engineering, science and product development together
in the same kind of a college campus or co-location is essential.
Video shows interior of The Cube.
Mimi Kurniawan, Chief Diversity Officer, PMI, speaks:
It’s the center of the future.
It’s also a center of our innovation.
Graphic shows The Cube in Neuchâtel and text reads: It’s the center of our innovation.
Scott Coutts, Senior Vice President, Operations:
Really, this is the heart of PMI.
Video cuts to The Cube.
Bin Li, Chief Product Officer, speaks:
You will be super lucky if you only try one idea, and it works.
No, in scientific research, in technology development, more often than not you need to try with several iterations.
While Bin Li is speaking, video cuts to Jean-Claude Schneider handling previous PMI heated tobacco products
Jean-Claude Schneider, speaks showing first commercialized proposition of IQOS:
One of the first propositions, which we commercialized,
the first reaction was, ‘Are you joking? It’s way too big.’
It was big because the battery was very big.
So, the breakthrough of IQOS development was, ‘Can we separate the two?’”
Graphic appears showing first IQOS proposition separated into the device and the battery.
Text reads: Breakthrough of IQOS development
Moira Gilchrist speaks:
The thirst for information in the broader company became almost insatiable.
So, we made quite a deliberate decision to start internally explaining what we were doing, explaining the early scientific results.
Jacek Olczak, CEO of PMI, sat in an office speaking to camera:
During meetings, people were asking about,
‘Is there anything we haven’t asked you?’
And I said, ‘Yes, you haven’t asked us about the innovation.'
And everyone was like, ‘Innovation in the cigarette industry? what do you want to innovate?’
Graphics appear showing a light bulb and then IQOS
Text reads: You haven’t asked us about the innovation. What do you want to innovate? This!
Jacek Olczak voiceover graphics:
And I was showing IQOS, and I was showing the product.
André Calantzopoulos speaks:
It was a fun time actually, for me.
And yeah, I was amongst the first ones to have the product.
And we kept this tradition.
We were always amongst the first to try new products in the company.
Urs Bringold speaks:
There was a point in time where almost everybody in senior management was using that product.
André Calantzopoulos speaks:
It’s not a guinea pig.
it’s a privilege to be in a position to be so close with the product development.
Video cuts to scientists in a lab.
Moira Gilchrist speaks:
We had a small pilot clinical study that we got some results from.
And the results were, frankly, for us they were astounding.
They were so different to cigarettes.
Jean-Claude Schneider speaks:
So that is a kind of a wow moment.
We have the sensory, now the clinical.
Serge Maeder speaks over video of scientists looking at a computer.
We have reduced toxicants.
We don’t have solid particles. All these major, major differences.
Stefano Volpetti, President, Smoke-free Inhalable Products & Chief Commercial Officer, PMI, speaks:
Science is extremely important because we are in the business of
transforming the trajectory of public health globally.
Graphic appears showing a drawing of the globe
Text reads: Transforming the trajectory of public health globally.
Shea Lih Goh, President, PMI Japan, speaks:
When we started the journey to be supported with strong science evidence,
I think it was something that was very consistent across the world.
Jacek Olczak speaks:
You have the science.
But at the end of the day, you want observations.
Do you feel better? Then you really trust the science.
Video cuts to The Cube
Lisa Hook, Member of the Board of Directors, PMI, speaks to camera:
You have to remember this is a radical transformation.
How many companies say, ‘We’re going to go into a business that could completely cannibalize the core?’
Graphics appear showing early designs and the evolution of PMI’s heated tobacco products from 1990 to 2023.
Text on graphic reads: How are we going to make this transformation?
Scott Coutts speaks
For everyone, it was quite inspiring.
But at the same time, it was also terrifying.
How are we going to make this transformation?
And I think what André did was to really unify the company to say, ‘No, this is about us as PMI.
'We are one company.’
Karlygash Bismeldinova, AGC, Commercial Development Law, PMI, speaks to camera:
But I don't know how he managed to convince investors.
Lisa Hook speaks:
The investors didn’t flee.
Why didn’t they flee?
Because they are sticking with this team and this vision.
André Calantzopoulos speaks:
It took probably three or four years more than I had originally thought,
for very many good reasons.
But the good thing is we all believed in this product, so we never wavered,
but now we have to go to the market.
Graphic appears showing the text: In the next episode.
Scott Coutts speaks:
We’re going to launch and we’re going to make mistakes.
Moira Gilchrist speaks:
We were nowhere near ready.
Stefano Volpetti speaks:
The probability that you will fail is very, very high.
Scott Coutts speaks:
It took time. It took patience.
Karlygash Bismeldinova speaks:
We didn’t know what would be the reaction.
Moira Gilchrist speaks:
Oh, my goodness, we were in tears.
Philip Morris International logo appears.
Text reads: Episode 3 coming soon.
Episode 1 – “A Genius Idea”
Episode 1 – “A Genius Idea”
Background music begins.
André Calantzopoulos, Chairman of the Board, Philip Morris International (PMI), sitting in an office, speaking to camera:
The industry had said in the late nineties
and admitted openly that cigarettes
cause disease and premature deaths.
What do you do to resolve the problem?
Music rises
Graphics appear showing early designs and the evolution of PMI's heated tobacco products from 1990 to 2023.
Text shows title of
video: PMI - A Story of Innovation - #01: A Genius Idea
André Calantzopoulos continues:
Eliminating the combustion, hence 'smoke-free', is the solution
and the answer to the problem.
Serge Maeder, Global Head of RRP
System Innovation, PMI, sat in open-plan office, speaking to camera:
At the beginning all the options are available.
So you have a full blank sheet with no specification,
just a desire to develop a good product
Jean-Claude Schneider, Global Head, New Business Opportunities, PMI, sat in open plan office, speaks to camera:
That can, on one hand, address the issue of combustion,
the issue of burning, but in the meantime,
making sure that smokers can find pleasure
and therefore have an alternative that is viable.
Moira Gilchrist, Chief Communications Officer, PMI, sat in an office, speaking to camera:
We'd had a previous product before, that frankly didn't work
very well,
that was heated from the outside.
Serge Maeder:
But these products were commercial failures.
André Calantzopoulos:
And I think the consumer readiness also was not as high as later on.
Voiceover
of Jean-Claude Schneider as he walks through PMI's Research and Development Center in Neuchätel.
You don't figure it out at the beginning. You start and day in, day out, you build your level of confidence.
But the first
day you cannot figure out how many issues, how many challenges you're going to face and how are you going to do each and every step.
Serge Maeder:
So we started from the point where we knew the technology was possible.
So by heating tobacco,
you can actually reduce toxicants
that are created by combustion…
Graphic showing a thermometer and the words spoken by Jean-Claude Schneider.
Maeder continues:
but we didn't have any example of
a successful product.
So the challenge for us was to say, can we push and develop this technology
to a point where it becomes acceptable to adult smokers?
Footage of Serge Maeder in the laboratory assessing heated tobacco products
Moira Gilchrist speaks:
It took us a while to figure out that you need to have a very different approach.
And they came with this genius idea that if we figure out a way to put the heater in the inside,
then we could make it much more efficient.
Animated infographic showing the development of a heated tobacco product with the heater on the inside of the product.
Jean-Claude Schneider speaks:
But that was not the first question.
The first thing: to hire people.
Different music starts and clips of people in open-plan offices discussing and laughing.
Jacek Olczak, CEO of PMI, sat in an office speaking to camera:
So, in movies it is called magic, but in real life you need hundreds, thousands
of people.
André Calantzopoulos speaks:
As you know, it's not only one person or five or ten, it is the whole company
that achieved this.
And I think everybody can be perfectly proud of what we have done.
Moira
Gilchrist:
When you're a scientist, it's not often you get to work on a subject
that has the potential to change the lives of a billion people.
Bin Li, Chief Product Officer, PMI, sat in an open plan office, talking to camera:
We
want to do harm reduction.
We want to deliver benefits to consumers.
That process of explaining what we want to do, it’s not easy.
Karlygash Bismeldinova, AGC, Commercial Development Law, PMI, speaks to camera:
I was like,
'Wow, we are going to see a completely different product.
We will learn a lot of things. We will be developing as an organization.'
Shea Lih Goh, President, PMI Japan, speaks to camera:
It was unimaginable.
And to be honest, I was one of the few skeptical people
because we had failed a couple of times before.
Urs Bringold, VP Content & Owned Media, PMI, speaks:
There were people that said: 'This is the end of Philip Morris.'
Lisa Hook, Member of the
Board of Directors, PMI, speaks to camera:
We have to innovate to cannibalize our core business.
Mimi Kurniawan, Chief Diversity Officer, PMI, speaks:
The fact that we came up to disrupt our industry.
Graphic
appears showing text: We came up to disrupt our industry.
Mimi Kurniawan continues:
…unless we do it, no one is going to start it.
Lisa Hook speaks:
I think it's the most extraordinary achievement
I've ever seen
any corporation accomplish.
Video cuts to scientists in a lab.
Moira Gilchrist speaks:
So, give Philip Morris International a huge and frankly scary goal
and everyone will point towards it and do everything they possibly can
to achieve that goal.
Stefano Volpetti, President Smoke-free Inhalable Products & Chief Commercial Officer, PMI, speaks:
We have that passion, that drive to go in the right direction of smoke-free.
And, we are delivering on it and
we will deliver on it.
Moira Gilchrist speaks:
So, I never really had a doubt that we could do it.
The question was: how long would it take?
New music begins and video cuts to The Cube.
Jean-Claude Schneider speaks:
So, since day one, André was very supportive,
very helpful in the development.
André Calantzopoulos speaks:
I think having a technical background has helped me understand a bit of the technological challenges,
but it was not me who developed the product.
Let's be realistic.
Jean-Claude Schneider speaks:
I always remember his message: Don't make any shortcuts.
Graphic appears showing text: We’re gonna have one chance to justify.
It continues, showing early designs and the evolution of PMI's heated tobacco products from 1990 to 2023.
Jean-Claude Schneider speaks:
We're going to have one chance to justify this next-generation-type of product,
so we have to make
it right.
Scott Coutts, Senior Vice President, Operations:
If we hadn't have done it,
we probably would be viewed in a much more skeptical light.
Jacek Olczak speaks:
I think we did the right thing.
And I was so happy that, you know, in order to enjoy the great things in life,
you need a bit of luck beyond your skills.
And the luck is coming that you were in the right moment, in the right place.
And you could enjoy this terrific journey.
André Calantzopoulos
speaks:
That's how it all started.
And back in 2003, 2004, there was a lot of thinking behind this,
but the decision was taken and that’s how the journey started.
Graphic appears showing the text: In the next episode.
Andre speaks:
We all believed in this product,
so we never wavered.
Scott Coutts speaks:
It all starts here.
Serge Maeder speaks:
We really needed to invent something new.
Jean-Claude Schneider
speaks:
Can we separate the two?
André Calantzopoulos speaks:
It’s not a guinea pig, it is a privilege.
Moira Gilchrist speaks:
The results were astounding.
They were so different to cigarettes.
Philip Morris International logo appears with text underneath reading:
Episode 2 coming soon!
PMI: A Story of Innovation
PMI: A Story of Innovation
Jacek Olczak, CEO, Philip Morris Internation (PMI), speaks:
So, in the movies it is called magic,
but in real life you need hundreds, thousands of people.
Mimi Kurniawan, Chief Diversity Officer, PMI, speaks:
Unless we do it no one is going to start it.
Bin Li, Chief Product Officer, PMI, speaks
It's not easy and it takes a long time.
It takes a lot of effort from the whole company.
Shea Lih GoH , President PMI Japan, speaks:
It was unimaginable.
Scott Coutts, Senior Vice President, Operations, PMI, speaks:
It all starts here.
Serge Mander, Global Head of RRP System Innovation, PMI, speaks:
From the point where we knew the technology was possible.
Jean-Claude Schneider, Global Head, New Business Opportunities, speaks
So that is kind of a wow moment.
Moira Gilchrist, Chief Communications Officer, PMI, speaks:
And they came with this genius idea.
Andre Calantzopoulos, Chairman of the Board, PMI, speaks:
Eliminating the combustion, hence ‘smoke-free,’ is the solution and the answer to the problem.
Karlygash Bismeldinova , AGC, Commercial Development Law, PMI, speaks:
I was like, ‘Wow. We are going to see a completely different product.’
Lisa Hook, Member of the Board of Directors speaks
We have to innovate to cannibalize our core business.
Stefano Volpetti, President Smoke-free Inhalable Products & Chief Commercial Officer, PMI, speaks:
The most important courageous move was already done.
The declaration that there is only one way forward: ‘smoke-free.’
Urs Bringold , Vice President, Content & Owned Media, PMI, speaks:
There were people that said, ‘This is the end of Philip Morris.’
There were voices out there.
Andre Calantzopoulos speaks:
But the decision was taken and that’s how the journey started.
Music rises
Graphics appear showing early designs and the evolution of PMI’s heated tobacco products from 1990 to 2023.
Text appears: PMI A Story of Innovation - full series coming soon.
Jacek Olczak speaks
I think we did the right thing.
Graphic shows PMI logo
Text read: Live on 17th October.
A DECADE THAT DELIVERED
In the 10 years since we launched the first version of our HTP, we’ve made significant progress toward delivering our vision of a smoke-free future. We have remained committed to our ambition of replacing cigarettes with scientifically substantiated better alternatives as quickly as possible.
We have continuously developed and expanded our portfolio of pioneering smoke-free products, investing USD 12.5 billion to develop, scientifically substantiate, and commercialize smoke-free products since 2008.
Reflecting on the past 10 years of innovation at PMI provides us with an opportunity to celebrate the progress we’ve made so far. These are the strides that are driving our ambition for smoke-free products to account for over two-thirds of our total net revenues by 2030—and, ultimately, to phase out cigarettes entirely.
