British American Tobacco (BAT) is advancing its business transformation with smokeless products expected to become the company’s predominant offering by 2035, CEO Luis Tadeu Marroco told Arabian Business in an interview.
“We have a clear ambition to become a predominantly smokeless organisation by 2035,” Marroco said. “The beauty behind that is the fact that we’ll be able to offer consumers who want to continue to use nicotine through these different products that we call smokeless products.”
The company is already seeing results from this strategic shift, with smokeless products now accounting for 18 per cent of total revenue. BAT is channelling significant financial resources from its traditional cigarette business to drive innovation in new categories.
“What we are doing is using most of those financial resources to fund the transformation towards these new products,” Marroco said.
“We have to create new capabilities as we transform along… We have to invest a lot behind science, we have to invest a lot in terms of innovation, in terms of data analytics, in terms of intellectual properties.”
The Middle East has become a key regional hub for BAT’s operations, hosting over 2,500 employees from more than 40 nationalities.
“It’s strategically very important for BAT, the Middle East region,” Marroco said. “We see the consumers are very progressive. They want to experiment and try these new products.”
The region’s duty-free market has shown particular promise for the company’s Velo brand.
“What we are seeing worldwide is a tremendous growth of nicotine pouches, even in place where there is no oral tradition,” Marroco explained.
“The brand equities is growing because it’s a product that wherever we are launching is gain leadership in the market.”
Marroco praised regional government initiatives supporting innovation. “I’m very impressed with all the efforts done by the government to incentivise artificial intelligence development, innovation technology,” he said.
“These are all raw material for us to feed into our transformation.”
(Source: ArabianBusiness YouTube channel)
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