The Brand Doctor … Philip Morris, the world’s largest tobacco company, with brands like Marlboro, has said it’s giving up cigarettes, and is already 41% smoke-free … How should PMI reinvent itself?

June 20, 2025

Each month The Brand Doctor, business expert Peter Fisk, takes a global brand that has lost its way, and considers how it could reinvent itself. If it’s your brand, do you have the courage to change? If not, what would you do, and how could you apply these ideas for reinvention to your own business?

Philip Morris International

PMI is a company of contradictions. It is the largest publicly listed international tobacco company, with 2024 revenues of around $35 billion, and market cap of $250 billion.

For over a century, PMI has made billions selling products universally recognised as harmful. Marlboro, Virginia Slims, Benson and Hedges, and other iconic brands are woven into the social fabric of countless nations, a shorthand for glamour, rebellion, and ritualised indulgence.

Yet, the world has changed. Smoking rates are declining in developed markets, regulations are tightening, and public health narratives are increasingly uncompromising.

PMI’s declared goal of a “smoke-free future” is ambitious, even necessary—but it raises questions few executives dare to ask: can a tobacco company truly reinvent itself as a health and wellness organisation? Can it persuade its loyal consumers to follow it on that journey?

Smoke-free future

Jacek Olczak, CEO of PMI, has articulated a clear vision for the company’s future: to transition from a traditional tobacco company to a health and wellness enterprise. This transformation is encapsulated in PMI’s commitment to achieving a “smoke-free future,” aiming to replace cigarettes with scientifically substantiated, reduced-risk alternatives.

Since his appointment as CEO in May 2021, Olczak has consistently emphasised PMI’s commitment to transitioning away from traditional cigarettes and focusing on smoke-free alternatives. He has emphasised that PMI is not merely diversifying its product portfolio but is fundamentally reimagining its business model. The acquisition of Vectura, a UK-based inhaler business, underscores this shift towards health-oriented products. By investing in inhalation technologies and respiratory therapies, PMI seeks to leverage its expertise in nicotine delivery systems to address broader health concerns.

PMI aims to generate more than two-thirds of its revenue from smoke-free products by 2030 and continues to reduce its combustible cigarette shipment volume.

However, this strategic pivot is not without its complexities. The challenge lies in reconciling the company’s legacy as a leading tobacco producer with its aspirations in the health sector. The Marlboro brand, synonymous with smoking, presents a particular hurdle. While PMI has introduced IQOS, a heated tobacco product, and other smoke-free alternatives, the question remains: can these products, and the brands associated with them, be redefined in the public’s perception as health-conscious choices?

Current progress … 41% smoke-free

As of mid 2025, PMI reported that approximately 41% of its total global net revenues were derived from smoke-free products. This marks a significant increase from previous years, reflecting the company’s successful expansion into alternative nicotine products. Notably, in 25 markets, smoke-free products now account for more than 50% of total net revenues, indicating strong consumer adoption in these regions.

IQOS, PMI’s flagship heated tobacco product, continues to drive growth in the smoke-free segment. By the end of 2023, IQOS had approximately 28.6 million users, with an estimated 73% having switched from traditional cigarettes. This user base is expected to have grown further in 2024 and 2025, contributing significantly to the company’s revenue.

In the first quarter of 2025, smoke-free products accounted for 44% of PMI’s total gross profit. This indicates not only strong revenue growth but also improved profitability in the smoke-free segment. The company’s ability to achieve higher margins in this area is a positive sign for the sustainability of its transformation strategy.

Brand evolution … from Marlboro to wellness

Reimagining brands

The Marlboro brand, with its deep-rooted association with smoking, presents both an opportunity and a challenge in PMI’s transformation. While the brand’s recognition and loyalty among consumers are undeniable, its legacy may hinder its repositioning in the health and wellness sector.

One potential strategy is to introduce sub-brands or product lines under the Marlboro umbrella that are explicitly aligned with health and wellness. For instance, PMI could develop nicotine-free inhalers or wellness-focused products under the Marlboro brand, thereby leveraging its existing consumer base while signaling a shift towards healthier alternatives.

Alternatively, PMI could consider retiring the Marlboro brand in certain markets and launching new brands that are more congruent with the company’s health-oriented vision. This approach would allow for a clean break from the past but may risk alienating existing customers who identify with the Marlboro brand.

Evolving with consumers

Maintaining the loyalty of existing consumers during this transition is crucial. PMI must ensure that new products not only meet the health and wellness criteria but also resonate with the lifestyle and identity of its current customer base. This could involve offering products that replicate the sensory experience of smoking, such as nicotine-free inhalers that mimic the hand-to-mouth action, or creating wellness experiences that align with the social aspects of smoking.

Additionally, PMI could implement loyalty programs that reward consumers for transitioning to smoke-free products, thereby incentivizing the shift and reinforcing brand loyalty.

Strategic options for the future of PMI

The challenge is not merely to stop selling cigarettes, but to decide what to sell instead — and, more importantly, what role it wants to play in people’s lives. Having built its empire on habit and desire, PMI must now build one on health and hope. Its transformation could unfold along three broad, but profoundly different, strategic trajectories.

Option 1. The Nicotine Science Company … Owning the Transition

The first path is evolutionary: to remain within the nicotine ecosystem but reformulate it as a legitimate, controlled, and increasingly medicalised category. Here, PMI becomes the science company of inhalation — moving from combustion to clean aerosol delivery, from dependency to harm reduction, from mass addiction to precision pharmacology. This is the world of IQOS, Zyn, and the acquisition of Vectura, the British maker of respiratory therapies.

In this scenario, PMI’s credibility depends on evidence. It must build trust through clinical trials, transparent data, and partnerships with healthcare systems. The brand would shift from swagger to science — from cowboy cool to clinical competence. The Marlboro Man gives way to the laboratory coat. PMI could evolve into something resembling a cross between AstraZeneca and Dyson: a research-driven company engineering controlled inhalation for health, focus, or relaxation.

The advantage is continuity: PMI already understands the biology of nicotine and the psychology of ritual. But the danger is moral dissonance. Can a company that made billions from lung disease credibly claim to cure it? Investors might applaud the margins; society may not applaud the motive. Its success would depend on radical transparency, humility, and perhaps new brands free from the taint of tobacco.

The challenge for Philip Morris International is not merely to stop selling cigarettes, but to decide what to sell instead — and, more importantly, what role it wants to play in people’s lives. Having built its empire on habit and desire, PMI must now build one on health and hope. Its transformation could unfold along three broad, but profoundly different, strategic trajectories.

Option 2. The Lifestyle Energy Company … Owning the Moment

A more audacious option is to leave nicotine behind entirely and reinvent PMI as a consumer vitality company: selling focus, calm, pleasure, and recovery — not as chemicals, but as experiences. Think of it as “owning the moment” rather than the molecule. PMI could pivot from the science of addiction to the design of wellbeing: creating a portfolio of lifestyle products that meet the same emotional needs as cigarettes once did — ritual, release, and reward — but through healthier forms.

Imagine Marlboro reborn as an energy and recovery brand — drinks, teas, or natural stimulants positioned around clarity and control, not chaos and compulsion. Or IQOS reinterpreted as a personal wellness device — a “digital inhaler” for mindfulness, aromatherapy, or performance breathing. The idea is not to moralise away the cigarette, but to reimagine its essence: that fleeting pause, the sensory focus, the social connection — delivered in ways that heal rather than harm.

The risk, of course, is credibility. Can a nicotine company become a wellbeing icon? It might, if it embraces design, psychology, and culture as fluently as it once mastered chemistry. The lesson from brewers who created alcohol-free beers, or confectioners who made protein snacks, is that reinvention succeeds when it enhances — not denies — human pleasure. PMI could yet become a brand of modern calm: sophisticated, sensory, and sustainable.

Option 3. The Human Sustainability Company … Owning the Purpose

The boldest path is to transcend nicotine, energy, and consumer goods altogether — and reinvent PMI as a human sustainability company. This is not about selling products at all, but about enabling people to live longer, breathe better, and experience wellbeing as a right, not a purchase. It would mean harnessing PMI’s scientific, logistical, and commercial muscle to pioneer clean air, respiratory diagnostics, or preventative health technologies.

The company’s future purpose could be nothing less than to undo the harm of its past — to become a net contributor to global health. It could fund urban air quality initiatives, develop home purification systems, or commercialise respiratory monitoring platforms. Its Vectura and OtiTopic acquisitions give it a credible start in respiratory technology; its global supply chain could deliver access to health solutions at scale.

The advantage of this vision is moral clarity: it positions PMI not as a repentant smoker, but as an active reformer. It could become the corporate equivalent of the ex-addict who now mentors others — credible precisely because of its history. The disadvantage is strategic dislocation: it would require abandoning most of its existing brands and customer base, and building a new identity almost from scratch. But then again, great reinventions rarely come from comfort zones.

Which to choose? … continuity, credibility, and connection

Each path offers different value to shareholders — and a different story to society. The nicotine-science route promises margins and defensibility, but risks moral backlash. The lifestyle-energy route taps into culture and consumer engagement, but tests credibility. The human-sustainability route wins reputation and purpose, but demands reinvention at an almost existential scale.

In truth, PMI’s future may blend all three. It could continue its nicotine-science journey in the short term, evolve toward lifestyle vitality as a medium-term play, and ultimately redefine itself as a sustainability-driven wellness conglomerate. The secret will be coherence — ensuring that each step feels like evolution, not opportunism; progress, not public relations.

The company that once sold escape must now sell endurance. It must move from habit to health, from addiction to agency. And if it succeeds, PMI could offer not just a smoke-free future, but a lesson in corporate redemption: that even the darkest legacies can breathe new life — if they are willing to change what they mean to the world.

Reinventing brands … from addiction to aspiration

If the technology of PMI’s reinvention lies in IQOS and inhalable science, the psychology lies in its brands. Marlboro, Parliament, and L&M remain among the most recognisable consumer names on Earth — shorthand for freedom, rebellion, and the cool detachment of twentieth-century modernity. Yet they also carry the stigma of death, addiction, and manipulation. The central brand question is therefore existential: can a company so defined by its past ever detoxify its identity?

There are two strategic routes available. The first is evolution: to reinterpret existing brands for a new era, just as Dunhill transformed from cigarettes into luxury fashion and leather goods, and Davidoff evolved into a lifestyle marque spanning fragrances, watches, and spirits. Those brands carried the elegance and poise of the smoker’s ritual into broader realms of pleasure and sophistication. Marlboro, with its deep emotional equity, could in theory follow a similar path — re-imagined not as a tobacco brand but as a symbol of personal freedom, relaxation, or social vitality. In a world that values mindfulness and balance over hedonism, the “Marlboro Moment” could evolve from lighting a cigarette to taking a breath — of clean air, of calm, of focus.

The second route is reinvention: to start afresh with new names, audiences, and propositions. This path might be more credible to regulators and new consumers, particularly younger generations who associate legacy tobacco brands with manipulation and harm. PMI has already hinted at this with its VEEV and Zyn labels — names that sound more like wellness tech than vice. A future PMI might manage a portfolio more akin to Unilever or L’Oréal: a stable of purpose-driven brands across wellbeing, mental focus, respiratory health, and lifestyle performance. In that context, the PMI name itself might fade into the background, serving as a holding company for a constellation of new identities that express vitality rather than dependence.

Ultimately, brand evolution will determine whether PMI’s transformation feels authentic or opportunistic. Consumers are not naïve; they can accept change, but not hypocrisy. The challenge is to preserve emotional connection while re-anchoring meaning. To move from the freedom to smoke towards the freedom to live well. Some legacy brands may make that leap; others may need to be retired gracefully. The courage will lie not only in technological innovation, but in brand reinvention — in building trust, desire, and relevance for a generation that has never known the Marlboro Man.

Lessons from parallel markets

There is precedent for such radical change. Across consumer markets, established players have learned to turn existential threats into engines of renewal. The non-alcoholic beverage industry, for instance, has grown from niche abstinence to mainstream aspiration, as companies like Heineken, Guinness, and Diageo redefined their purpose from selling alcohol to selling social experiences — from intoxication to inclusion. By investing in flavour innovation, lifestyle marketing, and wellness credentials, they created a new growth curve that complemented, rather than replaced, their heritage brands.

Likewise, the food industry’s pivot to meat-free proteins shows how a legacy sector can reimagine its contribution to health and sustainability. Nestlé’s Garden Gourmet and Unilever’s The Vegetarian Butcher have leveraged deep R&D capabilities and consumer trust to enter markets once dismissed as fringe. These companies prove that disruption can be harnessed rather than feared — that existing consumer bases can be guided towards new habits if the experience feels authentic and the benefit personal.

Fashion offers another parallel. Luxury houses once built on exclusivity and excess — from Stella McCartney to Gucci — are now repositioning sustainability as the new status symbol. Circular design, resale platforms, and regenerative materials have turned environmental responsibility into a creative and commercial opportunity. The most successful transformations have not disowned their origins; they have reinterpreted them.

For PMI, these examples are instructive. The company cannot erase its history, but it can rewrite its meaning. Just as the brewers sold “moderation,” the food giants sold “better choices,” and the fashion leaders sold “sustainable beauty,” PMI could sell wellbeing and empowerment through nicotine innovation, clean inhalation, or respiratory health. Its challenge is not to abandon consumers, but to take them on a journey — to convert habit into health, ritual into responsibility. Investors will judge not just the scale of this ambition, but its sincerity.

Investor perspectives

For investors, Philip Morris International’s reinvention is both a story of conviction and contradiction. Markets admire its audacity: to pivot one of the world’s most notorious cigarette makers towards a future in which its own past becomes obsolete. The numbers, too, lend credibility. In mid-2025, around 41 per cent of PMI’s global revenues were derived from smoke-free products — primarily IQOS and Zyn — a figure expected to surpass the 50 per cent mark by 2026. Analysts at Stifel and Barclays praise the firm’s operational discipline and consistent earnings growth, noting that the company has “delivered on the smoke-free promise more convincingly than any rival.” PMI’s share price has risen steadily as investors reward the company for higher margins in reduced-risk products, strong cash flow, and a clear strategic direction.

Yet beneath the enthusiasm sits an unmistakable tension. Around 60 per cent of revenues still depend on combustible cigarettes, meaning the transformation is incomplete and exposed to the decline of traditional tobacco. Fitch recently revised PMI’s outlook to Negative, citing high leverage and execution risk. Regulators remain unpredictable, and the company’s reputation — a cigarette giant reborn as a wellness brand — invites scepticism. Some analysts fear the valuation already reflects much of the good news; others believe the pivot could take longer and cost more than expected. The consensus, in other words, is cautiously optimistic: PMI is praised for being bold, but it must now prove it can be both smoke-free and sustainably profitable.

Still, investors recognise that few companies in any sector attempt a metamorphosis of such magnitude — one that demands not only new technologies but new moral legitimacy. If PMI succeeds, it will not just have changed its products; it will have changed its social contract.

Choosing a better future

Philip Morris International stands at a pivotal juncture in its history. The company’s commitment to a smoke-free future is commendable, but the path to achieving this vision is fraught with challenges. The Marlboro brand, while iconic, may not seamlessly transition into the health and wellness sector without careful rebranding and strategic alignment.

To successfully navigate this transformation, PMI must prioritize consumer education, transparent communication, and innovative product development. By understanding and addressing the needs and concerns of its existing customer base, PMI can foster loyalty and facilitate a smoother transition to smoke-free alternatives.

Ultimately, PMI’s success in becoming a health and wellness company will depend on its ability to authentically align its products and brand with the values and expectations of today’s health-conscious consumers. This requires a bold vision, unwavering commitment, and a willingness to challenge the status quo.

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