1. Cigarette companies’ final days:
This article last week from the Associated Press, “U.S. health experts predict…a cigarette-free America,” highlighted the release of a 900-page report on smoking from the U.S. surgeon general. “Though the goal of a cigarette-free America has long seemed like a pipe dream,” the AP noted, “public-health leaders have started throwing around phrases like ‘endgame’ and ‘tobacco-free generation.’”
Smoking has declined significantly in the United States in the five decades since the surgeon general’s first report pinpointing the dangers of cigarettes. It is still a multibillion-dollar industry, however, that sells more than 300 billion cigarettes a year here.
Yet smoking rates continue to decline as the evidence of tobacco’s lethal effects becomes accepted wisdom. At the same time, venues forbidding smoking have become nearly universal, even as the sale of smoking products becomes more constricted. CVS’s decision two weeks ago to stop selling tobacco is the latest example. (I wrote about that here.) Several states are now considering raising the legal age for buying cigarettes to 21.
So, how is the industry fighting -- or preparing for -- that endgame?
How quickly are the big three players -- Philip Morris, Reynolds American, and Lorillard -- diversifying by betting on e-cigarettes? And what are the real prospects for those products, as well as the related health issues?
Are the big tobacco companies diversifying completely into other industries?
Are they having better luck with the core product abroad? If so, how and why?
The potentially juiciest part of the story might be that they are moving to diversify into another smoking product that’s been in the news a lot lately: marijuana. Tobacco companies going into pot (presaged by the Showtime series Weeds) seems a logical move, but not one that these Fortune 500 companies would be talking about much because pot is still illegal in most of the country.