Last year the Spanish boyband Dvicio was riding high after their latest album topped the charts. The “boys” — by now all in their late 20s or early 30s — were the summer’s cover stars for Like!, a tween magazine. Despite the pandemic, the band was still touring Spain. But these were gigs with a difference.
The concerts were sponsored by British American Tobacco (BAT), one of the world’s largest cigarette companies. At an exclusive gig in Madrid, the front rows were full of influencers there to promote Glo, BAT’s new heated tobacco product. Behind them sat people who had won tickets via a lottery on Glo’s Instagram account. For those who missed out, there was another chance to see Dvicio at the Starlite festival in Marbella — also sponsored by Glo.
BAT has told regulators around the world that its new products, including heated tobacco and oral nicotine, are for current adult smokers. But as these sponsorships make clear, it has launched an aggressive £1 billion ($1.4 billion USD) marketing campaign that leans heavily on social media, concerts and sporting events, which could have the effect of encouraging young people to pick up a potentially deadly tobacco habit that still kills 8 million people a year, notwithstanding long-established rules aimed at preventing this.
The bureau can reveal that several of these tactics, employed in different countries around the world, have attracted a new generation including non-smokers to highly addictive nicotine and tobacco products — and that this seems to be a consequence of BAT’s plans for yet more growth.
These tactics include:
- Presenting nicotine products as cool and aspirational in a glossy youth-focused advertising campaign.
- Paying social media influencers to promote e-cigarettes, nicotine pouches and tobacco on Instagram, notwithstanding the platform’s ban on the practice.
- Sponsoring music and sporting events, including an F1 e-sports tournament that was streamed live on YouTube and could be watched by children.
- And an international free samples offer for nicotine pouches and e-cigarettes that appears to have attracted underage people and non-smokers.
BAT told the bureau:
“All marketing activity for our products will only be directed towards adult consumers and is not designed to engage or appeal to youth … All our marketing is done responsibly, in strict accordance with our International Marketing Principles, local laws, legislation and platform policies … We only use influencers in some countries where it’s permitted, and social media platform policies allow.”
Glo is part of the latest salvo of “next-generation products” launched by BAT in an attempt to diversify away from cigarettes and — experts fear — addict the next generation to nicotine or tobacco.
Despite claiming these products are aimed at adults who already smoke, in part to help them quit cigarettes, there are clear signs the business also wants to attract new customers. Alongside its slogan “A Better Tomorrow,” BAT’s mission is “stimulating the senses of new adult generations.”
In investor presentations, BAT has said it wants to increase the overall size of the nicotine market. Its own research shows that at least half of adult vapers and those using nicotine pouches were not using nicotine before — i.e., had never smoked.
It is very clear that these corporations are spending huge amounts of money in developing new products,” said Martin McKee, professor of European public health at the London School of Hygiene and Tropical Medicine. “This makes no sense whatsoever if these are [meant to be] cessation products that will be used for a short while.
“The only rationale for putting this amount of effort into the design is to create a new generation that is addicted to nicotine.”
The young and the beautiful of Sweden are posting about a new craze: ice-white nicotine pouches that you put between your gums and teeth. Called Velo (or Lyft in some markets), they come in various flavors. Adverts emphasize them as discreet.
A hashtag for the pouches, #LyftSnus, has clocked nearly 13m views on TikTok. In an earnest video, one fan lip syncs to a meme after showing her followers a container of pouches: “People think I’m obsessed with this, but I’m okay with it — I am obsessed with it, but I think it is an obsession that doesn’t hurt anyone.”
The facts suggest otherwise. Nicotine is toxic to the developing adolescent brain. BAT was forced to withdraw its nicotine pouches in Russia, where products made by other brands have been blamed for a number of teenage hospitalizations and linked to one death. Unfortunately, that does not appear to have stopped BAT from seemingly setting its sights on younger generations in other markets.
One 18-year-old Swede who spoke to the bureau said half the girls in his class were using Lyft, which they found much more appealing than snus, a similar product made with tobacco. “Lyft has got this super-cool, Södermalm-trendy, influencer-aura about it,” he said. “It’s become trendy to use Lyft. Old-man snus has that entire association with Norrland and EPA-tractors and not everyone wants to get on that train.”
He added: “If you just take a look at the packaging: the bottom part’s transparent, so that’s a bit futuristic, and then the lid’s white with a different color for each taste. It’s like going into a sweet shop. The packaging looks a lot more festive than packaging that looks like it’s from the 1800s. Lyft’s aware of what they’re doing and they do it well.”
Paul Lageweg, director of new categories at BAT, has boasted of the appeal of nicotine pouches among adult Gen Z and millennials (Gen Z refers to those born between 1997 and 2012). He identified Pakistan and Kenya as key trial markets for Velo, calling it BAT’s most exciting opportunity.
In Pakistan, the bureau discovered that samples of BAT’s Velo nicotine pouches have been given away free. This seemed to be part of a large-scale campaign where young brand reps, working on commission, handed out samples at parties, shopping malls, tea shops, restaurants and tobacconists.
There are concerns that the brand has also actively encouraged non-nicotine users to take up Velo. One man in Pakistan told an official Velo social media account that he was using nicotine for the first time in the form of Velo. Velo responded by saying it was “so excited” and asked for feedback. “Lit af” [Lit as fuck], the man responded. BAT denies carrying out any inappropriate marketing activity in Pakistan.
One 17-year-old in Pakistan told the bureau that they were offered a free sample without being asked for proof of age. A similar incident was recorded in the UK last October, when a 17-year-old in Bath was offered a free sample of BAT’s Vype e-cigarette without verifying their age or if they smoked. BAT said it hands free samples only to adult smokers.
In Kenya, the alleged availability of Lyft pouches through vending machines at major shopping centers prompted the Ministry of Health to write to the Pharmacy and Poisons Board. In the letter, the ministry described the practice as “contrary to the law.”
“Our Kenyan subsidiary, BAT Kenya, strongly denies it has ever sold Lyft pouches in automatic vending machines in Kenya. BAT Kenya has confirmed this in writing to the Pharmacy and Poisons Board and Ministry of Health. BAT’s guidance to its retailers requires them to ensure that the product is only physically accessible by the retailer.”
In the opinion of Anne Kendagor, head of Kenya’s Tobacco Control Division: “The industry has been saying that the product was meant to help smokers quit but it was being marketed to non-smokers, the youth … which means it was not serving its purpose.
“It should be sold to cigarette smokers only. Our surveillance showed that it is new entrants, the young people are the ones starting to use it.”
In response to the bureau’s inquiries in Kenya, BAT’s PR agency asked our reporter “what is your price” to hand over our research. The agency told the bureau it “has a zero-tolerance policy towards any form of bribery”, is carrying out an investigation and in the meantime had suspended the employee. BAT said it had dropped the agency.
“The tobacco industry has a very long and storied and horrible history of targeting young people,” said Taylor Billings, associate media director of the campaign group Corporate Accountability. “So to now all of a sudden think because they have a new marketing campaign they may not be using some of the same tactics they have used for the last 20 years is a bit naive.”
A social media addiction
The target may not have changed, but the tactics have been updated for the digital age.
In Pakistan, BAT turned to TikTok for its #OpenTheCan ad campaign for Velo. Elsewhere the company used online influencers; data analysis by the Campaign for Tobacco-Free Kids shows that Facebook and Instagram posts from 40 influencers using Velo’s hashtags have been viewed 13.1 million times and have a potential audience of over 181 million.
As the pouches contain no tobacco they escape regulation under most countries’ tobacco laws and advertising regulations. Facebook’s own rules specify that influencers cannot post branded content promoting tobacco and e-cigarette products across any of their platforms, although the bureau still found dozens that had slipped through the cracks.
A Facebook spokesperson said: “We don’t allow adverts or branded content that promote tobacco-related products on Instagram, and we removed the violating content brought to our attention.”
BAT said all the influencers it works with provide validated evidence that the vast majority of their followers are adults.
Billings said the posts indicated BAT had been targeting a young audience. “The tobacco industry is too well resourced for things to be a coincidence,” she added. “They are not accidentally placing shiny adverts on a platform that have a vast percentage of its users as Gen Z or young millennials.”
Paid promotion by Kenyan influencers gave the Lyft brand a glamorous, aspirational appeal. On Jumia, a shopping site popular with Kenya’s young middle class, BAT sold Lyft under the party category. (The bureau learned this month that BAT has since pulled Lyft from sale in Kenya.)
Beside pictures posed on the tarmac, one influencer left the caption “Fast cars and kaftan dreams … #LYFTxMcLaren.”
Back on the track
It was a nod to another marketing tactic updated for BAT’s new products — F1 sponsorship.
Tobacco advertising on F1 cars has been prohibited since 2006, but BAT and Philip Morris International — Ferrari’s sponsor — technically follow the rules by promoting their nicotine brands or slogans instead.
BAT returned to F1 in 2019 for the first time since the ban was introduced, having previously funded the team British American Racing. The company’s new McLaren sponsorship deal includes Vuse e-cigarette and Velo nicotine pouch branding on drivers’ uniforms and “highly visible” locations on the McLaren cars, alongside its trademarked “A Better Tomorrow” tagline.
The company also sponsors F1 e-sports events that are streamed live on YouTube. Although viewers had to register as over-18 on YouTube to watch, during one tournament several viewers revealed that they were underage.
The sponsorship campaign even stretches to a deal with Rudimental, the drum and bass band, for a series of livestreams on the Vuse YouTube channel, the first of which marked the end of the F1 season.
BAT said its partnership with McLaren “is appropriate, responsible, and compliant with all laws and regulations and with our International Marketing Principles.”
The sponsorship splurge and influencer campaign is paying dividends in terms of the brand’s reach and recognition. BAT recently told its investors that it had seen social media engagement grow over the course of the pandemic.
It found almost 90% of online mentions of oral nicotine were for Velo/Lyft, and that audience had almost tripled in size compared with the previous year.
It is not just aspects of BAT’s marketing that recall an earlier era; so do the products. Despite their on-trend gadget-like appearance, heated tobacco devices like BAT’s Glo have a long history.
The first patent for heated tobacco was filed by Canadian inventor WJ McCormick in 1935. In the 1960s BAT developed devices under codenames including Mad Hatter and Ariel, but it would not be until 1988 that RJ Reynolds, a subsidiary, launched a product to market.
Stephan Risi, author of an academic paper on project Ariel, claims it was the “moment when a tobacco company first grappled with the idea that they were selling not tobacco or cigarettes but an addictive drug: nicotine.”
Allegedly project Ariel was shelved over fears it would damage cigarette sales. Now, after decades of public health measures have affected cigarette sales, BAT is aggressively marketing heated tobacco and nicotine-only products.
An internal BAT document from 1984 about another experimental product shows the company has long considered how to replace older adult smokers with new customers. Assessing an oral tobacco pouch — similar to Lyft/Velo’s nicotine-only pouches now — the company noted the earning potential of “smokeless products.”
“Anti-smoking propaganda at schools may well mean that the industry cannot expect future generations to take to the smoking habit at the rate of previous ones,” the BAT document reported. “Single-portion smokeless products could provide [us] the opportunity to make new profits rather than cannibalize existing profits from cigarettes.”
Dr Ruediger Krech, director of the department of health promotion at the World Health Organization, said: “The tobacco industry is constantly introducing new products to attract the next generation of addicts to harmful nicotine and tobacco.”
Tobacco companies argue that they are offering heated tobacco to improve public health, as exemplified by BAT’s “A Better Tomorrow” slogan. There is some evidence that heated tobacco is less harmful than cigarettes.
However, experts suggested that rather than leading smokers to less harmful products, some new customers may switch from pouches or heated tobacco to cigarettes.
“Any time you get someone addicted to nicotine they are going to be more likely to use other nicotine delivery products and stick to them if they find them more satisfying to their addiction,” said Eric Lindblom, a former director of tobacco control at the U.S. Food & Drug Administration (FDA).
In Italy, for example, traditional tobacco use fell every year for the past three decades. That is until 2010, when the introduction of e-cigarettes began driving up demand, said Silvano Gallus, an epidemiologist from the Mario Negri Institute for Pharmacological Research in Milan, Italy.
Gallus added that the arrival of heated tobacco in Italy in 2014 had encouraged young people who would not have otherwise smoked to take up conventional cigarettes. BAT told the bureau: “Making adult smokers aware of new products will inevitably mean some non-smokers will also hear about them. However, we believe that it is better for adult consumers who choose to enter the nicotine category, to choose a potentially reduced-risk product, rather than cigarettes.”
BAT has made no secret of its desire to increase the overall size of the nicotine market. Its own research shows that at least half of adult vapers and those using nicotine pouches were not using nicotine products before.
Thanks to tax breaks, the new products are also more profitable: BAT’s gross margins on Glo heated tobacco and Velo nicotine pouches are 78% and 70% respectively, compared with 67% for cigarettes.
These findings seem to contradict what BAT has said to the FDA in the US, regulators in the European Union, and in its own materials in at least three other countries, which state that the purpose of new products is to provide adult smokers with credible and viable alternatives to smoking.
Across the globe regulators have struggled to keep pace with the explosion of alternative nicotine products on the market. Many health experts believe that stricter laws are necessary in order to prevent these products causing a net harm to public health.
“Governments need to effectively regulate these products, such as nicotine pouches, like they have tobacco products,” said Krech. “Otherwise young people could become addicted to products that have not been out long enough to fully understand the extent of harm.”
Across the world responses have been mixed. Pakistan’s light-touch approach to nicotine pouches contrasts sharply with the strict regulation being pushed for in Kenya, where officials have expressed concern about how popular they are with young people.
Many countries are likely to take their cue from the FDA, as they did with e-cigarettes. The FDA took tough action against the vape business Juul after its marketing was blamed for a teen vaping epidemic.
However, BAT’s rival Philip Morris has recently been celebrating the FDA’s decision to allow its heated tobacco device iQOS to be marketed as a “modified risk tobacco product.” This is thanks in part to research that suggests it reduces exposure to 15 harmful or potentially harmful chemicals, when compared to cigarettes.
Despite this, the product is not “FDA approved.” In fact, in its ruling, the FDA stated: “It is important to note that these products are not safe, so people, especially young people, who do not currently use tobacco products should not start using them or any other tobacco product.”
Eric Lindblom believes the agency’s decision to allow several alternative tobacco products to be marketed as a “modified risk” products did not fully consider all their potential harms.
“FDA’s attitude seems to be that we are not allowed to do anything unless we have a crisis,” he said. “They are not willing to shut the barn door until the cows have already escaped, that seems to be their attitude in their [modified risk tobacco product] orders because there are a lot of very reasonable preventive measures they could take that they just have not.”
Lindblom suggests allowing nicotine products to be marketed at self-declared smokers only. “My view is there is certainly a gateway risk and let’s figure out how to close that risk, rather than spend ten years trying to figure out how big and harmful that risk is,” he said. “Let’s just get rid of it through good policies.”
BAT said it is “committed to building A Better Tomorrow by reducing the health impact of our business through offering a greater choice of enjoyable and less risky products for our consumers.”
It added: “Our multi-category approach provides the widest choice of potentially reduced-risk alternative nicotine products to adult smokers who want to switch from cigarettes.”
“This rebrand is just getting to the core of what they have always sold, which is an addictive product that is harmful for your health,” said Taylor Billings of Corporate Accountability.
Cigarettes kill about 15 people every minute; it is not hard to see why a less deadly alternative appeals to Big Tobacco. But former smokers still represent a dwindling market.
“It is not a benefit to the industry that its products kill its users, so if they can claim to have a healthier product that will open the gateway to many people to then try a product. And all of a sudden you have teenagers with nicotine addictions and corporations ready to cash in.”
Originally published by The Bureau of Investigative Reporting.