The Heat-Not-Burn (HNB) tobacco market has been experiencing explosive growth over the past few years, with big names like Philip Morris International (PMI), British American Tobacco (BAT), and Korea Tobacco & Ginseng (KT&G) leading the charge. With global expansion in full swing, the HNB industry is expected to hit new milestones soon, with projections pointing toward a market size of around $30 billion by the end of 2024. This growth has been fueled by evolving consumer preferences, shifting smoking habits, and technological innovation. But what's really behind this tobacco revolution, and what does it mean for the future of vaping?
The global HNB tobacco market is expected to surpass $30 billion in 2024, with a compound annual growth rate (CAGR) of 24% since 2019. According to industry reports by TobaccoIntelligence, this rapid growth will continue with an 8% year-over-year increase. While markets like Europe and Asia are currently dominating the sector, the competition is intensifying, and new players are stepping into the game.
Globally, there are a handful of companies that currently control the lion’s share of the HNB market. These are the giants: PMI (with its Iqos brand), KT&G (with its Lil device), BAT (with Glo), Japan Tobacco (JT, with Ploom), and Imperial Brands (with Pulze). For example, Iqos, PMI's flagship device, is available in 70 countries worldwide, while Glo is now present in 31 countries, and Ploom is operating in 16 markets. The race for market dominance is far from over, though, as these brands innovate and expand at an accelerating pace.
It’s hard to believe, but the concept of heat-not-burn tobacco devices has actually been around for decades. Back in 1988, American tobacco company RJ Reynolds launched Premier, the first smokeless cigarette. Despite a promising start, the product failed to gain traction and was withdrawn from the market after only four months. Fast forward to 1996, and RJ Reynolds tried again with a revamped version called Eclipse. But the product didn't hit the mark either and was pulled by 2014.
Meanwhile, PMI also entered the HNB game in 1988 with its Accord device, which was discontinued in 2006 after disappointing sales. In the years that followed, other companies would also try their hand at innovating the tobacco experience. For instance, in 2007, PMI tested a similar device called Heatbar in Austria and Switzerland, but that too failed to make an impact.
But the real turning point came in the 2010s. By this time, technology had caught up, and the big players were ready to take another shot at this revolutionary concept.
The big names started getting serious about HNB tobacco in the 2010s. In 2011, Japan Tobacco International (JTI) invested in a San Francisco startup called Ploom, which had been developing alternative tobacco products. This partnership would eventually give birth to JTI’s Ploom line of devices, which were initially aimed at markets like Japan and Austria.
In 2014, things heated up when PMI launched its Iqos device, the product that would ultimately define the modern heat-not-burn category. Iqos represented over a decade of R&D and an eye-watering investment of $6 billion. This device marked a significant leap forward, and PMI quickly began expanding into international markets. By 2016, Iqos had reached 15 countries, and by 2017, it had entered 18 new markets, including South Korea, a key player in the HNB game.
PMI’s leadership in the HNB category was no accident. By 2017, Iqos was well-established and continuing to expand rapidly. From 2018 to 2021, PMI increased its footprint by entering countries like the Philippines and Mexico, two markets with massive populations.
Today, PMI’s Iqos brand accounts for a staggering 75% of the global market share. This is no small feat, considering the number of competitors vying for a piece of the HNB pie. As part of its continued push, PMI recently introduced the Iqos Iluma device, which follows a familiar product launch strategy — target key markets first and then roll out globally.
While PMI has been riding high, the competition is catching up quickly.
BAT's Glo entered Japan in 2016 and rapidly expanded into several markets where Iqos was already established. Similarly, KT&G launched its Lil device in South Korea in 2017, and by 2020, thanks to a strategic partnership with PMI, it was available in 28 countries. KT&G’s aggressive expansion and alliance with PMI have set the stage for even bigger moves in the years ahead.
JTI followed suit, introducing the Ploom S device in 2019. The company’s strategy is to expand into 40 markets by the end of 2026, a bold but achievable goal given its successful track record in Japan and Korea.
Imperial Brands, with its Pulze device, entered the game in 2019. Focused primarily on Europe and select markets in Asia, Imperial is tapping into the growing demand for alternatives to traditional smoking.
One key factor that has contributed to the rapid adoption of heat-not-burn products is the introduction of unique and diverse flavors. Flavored tobacco products have long been popular, and many consumers see HNB devices as a way to experience those same satisfying tastes with fewer harmful side effects.
For example, Super Fog Vape and Foger Switch Pro Vape have exploded onto the market with their innovative products, giving users a range of flavors that appeal to younger consumers. With options like tropical fruit blends, menthol, and even candy-inspired notes, these vapes are proving to be just as popular among adults as they are with teens.
While some countries have introduced flavor bans to curb teen vaping, many markets still allow a wide range of flavor options, making the HNB segment even more appealing to a broader audience.
Looking toward the future, the HNB market is poised to grow even more, but challenges remain. Key to this expansion will be the successful introduction of these devices into two massive markets: the U.S. and China.
The United States: After facing patent disputes with RJ Reynolds and Ongoing issues with the Food and Drug Administration (FDA), PMI has been in a holding pattern when it comes to the American market. However, 2024 is set to be the year that changes. PMI has announced that it will relaunch Iqos in selected states, starting with a test run in four cities. If all goes well, the device could be available nationwide by 2025, pushing the global market value to new heights.
Global Expansion: As of 2024, the global HNB market could exceed $30 billion. With ongoing expansion in key regions, it’s clear that these products are here to stay. However, markets like the U.S. and some European nations still face regulatory hurdles, making it unclear when HNB products will be fully embraced worldwide.
The future of HNB products seems bright, especially as tech companies continue to innovate and release new devices. For example, Foger Vapes has already established a solid presence in regions like Southeast Asia, and with their forward-thinking approach, they’re likely to continue making waves. Their Foger Switch Pro Vape, with its cutting-edge design and reliable performance, is a perfect example of how these brands are pushing the envelope to create a better smoking experience.
The heat-not-burn tobacco industry has gone from being a speculative niche market to one of the most exciting segments in the global tobacco industry. While PMI continues to dominate with its Iqos line, the competition is fierce, and the market is growing fast. With increased innovation, more flavors, and broader market access, devices like Super Fog Vape and Foger Switch Pro Vape are ensuring that consumers have more choices than ever before.
As the market continues to evolve, the future of HNB looks bright, with technological advancements on the horizon and a steadily growing consumer base ready to embrace the next generation of smoking alternatives.
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