An interview with Jacek Olczak, CEO of Philip Morris International, and Matthew Swift, Co-Founder, Chairman & CEO of Concordia
For a company with a deep history in the tobacco industry, a future in which cigarettes are obsolete may seem problematic. But for Concordia Patron Member Philip Morris International (PMI), it’s quite the opposite—in fact, the company (ranked #107 on the Fortune list in 2020) is actively working to create a smoke-free future. At its helm is tobacco industry veteran Jacek Olczak, recently-appointed CEO and former COO, who is leading the shift towards the company’s smoke-free future, replacing cigarettes with better alternatives as soon as possible. He recently sat down with Concordia’s Matthew Swift to discuss his professional trajectory, share his vision for the company, explore how to combat misinformation, and more.
When former PMI CEO André Calantzopoulos set out the company’s vision for a smoke-free future in 2016, it was met with skepticism and surprise by many. But for PMI a future in which cigarettes are obsolete makes sense—not only for smokers, but for the public, the company, and its shareholders. Over recent years, PMI has leveraged science and technology to create smoke-free products that are vastly better than cigarettes for adults who smoke, according to the company. What’s more, the science behind these products is scalable and has been assessed by a number of independent scientists and regulators around the world. For example, the U.S. Food and Drug Administration authorized PMI’s alternative heated tobacco product system as a modified risk tobacco product with reduced exposure information in 2020.
“It makes sense that if you have a product that is vastly better than the previous product, you just go for the full replacement,” Jacek Olczak, CEO of Philip Morris International
PMI passed a significant milestone in 2020, with nearly a quarter of the company’s total net revenues coming from non-combustible products. This led the company to announce in February of this year that its new 2025 target is for more than half of its total net revenue to come from smoke-free products and at least $1 billion USD of its revenue to come from non-nicotine products. These targets have put the company on the path to no longer being a cigarette manufacturer much sooner than many believed possible. As a leader in the tobacco industry, PMI has set ambitious, but attainable, targets. This is how you drive change in the world, believes Olczak.
“I believe with today’s speed of innovation, technology, ability to scale up fast, we will completely solve the problem of combustible smoking for good,” Jacek Olczak, CEO of Philip Morris International
But just as we’ve witnessed with the development, rollout, and response to COVID-19 vaccines, the need to combat misinformation remains of utmost importance to realize the vision of a world in which cigarettes are obsolete. Despite the fact that an estimated 14 million people around the world have already fully switched to PMI’s smoke-free products and stopped smoking, mistrust toward the tobacco industry remains prevalent. According to PMI, this mistrust translates to restrictive regulation that prevents many more smokers from learning about and accessing better alternatives to cigarettes.
So, how do you communicate at this critical juncture in a way that transcends mistrust and combat misinformation while addressing the valid concerns that many people have around these new smoke-free products? As outlined by Olczak, you have to be transparent about the product and the science, while also listening and fully addressing the concerns of those expressing hesitancy.
According to PMI, around the world in 2021, hundreds of millions of adults continue to smoke and many now find themselves hesitant to switch to a better choice because of misinformation. To address this, the company relies on the fact that its products are based on “robust scientific methodologies” (as stated by Olczak), which are publicly accessible. By using independent scientific research to verify its approach, PMI is contributing to the global dialogue and demonstrating that the company’s vision benefits adult smokers and society at large. Olczak believes that by presenting the public with the facts, you’re equipping people with the knowledge needed to make informed decisions and ultimately prevent the spread of misinformation.
“As the leader in the industry, I believe part of our job is to set a very ambitious, but attainable, target. This is how you drive change in the world,” Jacek Olczak, CEO of Philip Morris International
And, taking it one step further, companies must take responsibility for their words, which are—hopefully, in most cases—backed by scientific evidence. For PMI, it’s abundantly clear that its smoke-free products are developed for—and commercialized to—adults who would otherwise continue to smoke. Of course, smoking is unhealthy for people and the best-case scenario for those who smoke is that they quit entirely. However, for those who do not quit and would otherwise continue smoking, the next best outcome is that they switch as fast as possible to products that are vastly better than smoking. As the bearer of this message, PMI—the only traditional tobacco company within the industry that has committed to going completely smoke-free by encouraging a full switch of adult smokers to better alternatives than continued smoking—is often viewed skeptically. However, as highlighted by Olczak, if you remove the owner of the message and focus on the verified facts, it’s almost impossible to disagree with the fact that these alternative products are better choices for adult smokers that would otherwise continue to smoke. So, yes the messenger is the tobacco industry, but if it’s acting in a responsible manner, it should be listened to.
“It’s so easy these days to misinform the public. Unfortunately, there are many people who are more interested in exploiting the problem of smoking instead of solving it. People, I believe, should always have the right to make choices based on complete information and facts rather than on one-sided opinions and ideology,” Jacek Olczak, CEO of Philip Morris International
With ESG front and center of many private sector companies, PMI is focusing on its impact on society as a whole. While first and foremost addressing the problem of smoking through replacing combustible products with smoke-free alternatives, the company is also making tremendous progress in a wide range of ESG considerations including achieving carbon neutrality, reducing plastic waste, ensuring gender equality, advancing its diversity & inclusion practices, and more.
In 10 to 15 years’ time, PMI hopes to have delivered a smoke-free future in many countries if societal support is given to drive the change. In the words of newly-appointed CEO Jacek Olczak, “I hope we’ll have a growing group of stakeholders who are willing to collaborate with us so that we can put our resources together and jointly achieve a world free of cigarettes.”
Concordia is a forum that believes impact can best be delivered when you have as many key players as possible at the table. For many of the SDGs, from health to agriculture supply chains to inclusive workspaces, that includes companies like PMI. The only traditional tobacco company that has committed to going completely smoke-free, PMI is actively changing the industry from within, and Concordia is proud to provide a platform through which to elevate this meaningful work. Concordia will continue to challenge Members and non-Members alike to be held accountable to the commitments they make.
“We’re the tobacco industry leader and I believe we’re acting as a leader in a highly-responsible way. We know that better alternatives for adult smokers exist, and I believe that it is our duty to carry that message to consumers, regulators, and scientists, and ultimately allow people to make vastly better choices than continuing to smoke,” Jacek Olczak, CEO of Philip Morris International
“Adult smokers who would otherwise continue smoking deserve a better alternative than they are being offered today […] The faster we grab the opportunity, the better it is for everyone,” Jacek Olczak, CEO of Philip Morris International