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Big Tobacco Unveils a Safer Cigarette

Reynolds American created statements by proclaiming the intended release of the Revo, a "safe" cigarette that heats tobacco rather than burning it. Philip Morris International has a corresponding product in the manufacturing for sale internationally.

Reynolds American unveiled a very close product 20 years ago, but it never raised funds to much.

Smokeless cigarettes work in approximately the same way. Tobacco is heated rather than burned, and a smoker inhales a comparatively harmless nicotine-infused vapor rather than a cloud of smoke.

E-cigarette Smoking

The advantage of the Revo is that it appears to be more like traditional cigarettes than its electronic rivals do. Revo is a branded cigarette sold in a pack that can be marketed at a value, not a common container of refill fluid.

One of the factors that Revo's forerunner has been unsuccessful was that a number of states sued Reynolds American for declaring that it was less dangerous than a regular cigarette. Those statements were unconfirmed by actual researches. So, Reynolds will have to be attentive in how it sells Revo today around the wrath of government bodies. But neutering the advertising will make it a lot difficult to create a following among smokers.

In a best case conditions, Revo might take a little market share from regular cigarettes and slow down the long-term drop of the industry. But that is the best case, and even under this situation Big Tobacco volume sales would continue to fall. The more likely conditions is that Revo is a advertising flop that is neglected in a year or two.

Reynolds American deals for 21.5 times trailing annual revenue. The numbers for local competitor Altria are 22.5.

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