2Firsts, reporting from USA by Taco Tuinstra - In the hypercompetitive and heavily regulated market for NGP, success depends largely on a company's ability to identify pain points and address them appropriately. By foreseeing the constraints that surround their operations and their consumers before anyone else does, businesses can unlock them for growth and stay ahead of their rivals.
That was one of the key messages delivered by Chris Gemmell, managing director and founding partner of Elna Limited, during 2Firsts' Global NGP Innovation & Tech Forum 2025, which took place Feb. 20, 2025, in Shenzhen and attracted more than 160 professionals from the new tobacco industry.
Participants included Imperial Brands, numerous leading Chinese e-cigarette companies and representatives from adjacent businesses specializing in areas such analytical testing, along with the organizer of the Dubai World Vape Show, Quartz Business Media.
A veteran of the fast-moving consumer goods and NGP businesses, Gemmell is well-versed in the topic of product development. Prior to founding his business in September 2024, he was global head of innovation portfolio strategy and product lifecycle management at British American Tobacco.
During his nearly 12 years at BAT, Gemmell led teams across innovation portfolio management, new product introduction and invention strategy to identify, prioritize and deliver growth initiatives.
As global head of innovation transformation for new categories, he was responsible for a holistic innovation transformation program. In his function as interim global head of R&D for new categories, he directed innovators in creating groundbreaking consumer products and developing solutions to productivity, sustainability, patent or regulatory challenges.
Gemmell also served as president of the American Snuff Co., senior vice president operations excellence at R.J. Reynolds Tobacco Co., vice president for BAT's operations and leaf for Mexico, Canada and Central America, and operations director of the company's unit in Romania.
As one of the leading players in the NGP business, BAT has invested heavily in reducing the health impact of its business by developing a greater choice of enjoyable and less risky products, a strategy that requires a profound understanding of the constraints facing consumers and businesses.
According to Gemmell, each group must cope with a distinct set of constraints. Consumers want products that are simple, affordable and convenient. In addition, products must be sustainable, safe and accessible, and fit users' lifestyles. Companies, meanwhile, face technical, budgetary and time constraints, along with legal, physical and ethical limitations.
"How we understand, interpret and address these constraints is a key growth driver for all our businesses," said Gemmell. "By removing consumer constraints, we remove barriers to adult consumers for choosing our product versus an alternative."
Balancing Act
Yet navigating the various constraints requires a careful balancing act. "Even if we have time constraints as a business, we shouldn't compromise on product safety," said Gemmell. And the environmental impact of disposable vapes should be weighed against their significant contribution to helping smokers transition from deadly cigarettes to potentially less harmful alternatives.
At the same time, responsible innovation requires companies to exercise constraint in product development, especially in an era of unprecedented technological possibilities, "Just because you can doesn't mean you should," said Gemmell, showing a slide of a gold-covered Ferrari. The trend among NGP manufacturers to incorporate displays into their products has merit if those screens display relevant information—data that addresses consumer anxieties about the remaining battery charge or puff count, for example.
But when those displays are used for gimmicks such as dancing flowers, the developer ventures into risky territory. "This is an adult product," said Gemmell. Companies should also focus on solving real problems rather than imagined ones. A vaporizer with integrated headphones may be a creative combination, but it doesn't address any of the issues that users most care about, such as reliability and hassle-free operation.
Philip Morris International understood this clearly as it worked to improve its IQOS heat-not-burn device. One of the key constraints in the product's first generation was blade breakage and the need for cleaning, which over time created an unpleasant odor. "So rather than let somebody else or another product solve the problem, the team at PMI fixated on those constraints to develop the Smartcore induction technology we see today in the Iluma platform," said Gemmell.
The success of IQOS can partly be explained by PMI's relentless efforts to eliminate shortcomings. "Those outside PMI tend to focus on what makes IQOS so good," observed Gemmell." Those inside PMI obsess what's not working. They are constantly asking themselves, "how can we make it better?"
But while in products constraints are challenges to be overcome, in product development constraint is a virtue to be exercised. Among other things, this means keeping things simple. Engineers love technical features, but most consumers just want products that are easy to use. BAT learned this the hard way when it launched Glo Sens, an early hybrid using liquid and tobacco, in Japan in 2019.
According to Gemmell, it was a fantastic product offering good taste and a high degree of satisfaction. But Glo Sens did not land well with consumers because it was too complex at a time when the category was still new, and users struggled to understand its workings.
Gemmel believes that all such experiences are opportunities to learn. The lesson for BAT was that products must be intuitive. "Consumers shouldn't have to work to figure out a product," he said. "If they do it will be difficult and prevent commercial success."
Other constraints
In addition to making their products safe, reliable and easy to use, companies must ensure they are accessible. After all, even the best device will fail to reach its potential if users are unable to purchase it. Affordability presents a considerable constraint especially in low- and middle-income countries, where most of the world's 1 billion smokers live. "A $30 tobacco heating product is not accessible for many smokers worldwide," said Gemmell.
Another constraint restricting the sector is lack of awareness. Many smokers are misinformed about the comparative risks of NGPs. So, education and affordability are key to growth. "Get the two together you have a winning formula," said Gemmell.
Looking ahead, the NGP business will face increasing regulatory constraints. In 2025, there will be more restrictions on single-use products and flavors, for example, along with greater enforcement in key markets, such as the United States. Gemmell believes these constraints will drive new developments. He expects more pod innovation, continued shift to chargeable closed systems and more adult-oriented, regulatory compliant flavors, along with innovation on the cost and supply base.
The vapor industry, he predicted, will face unprecedented pressures through tariffs, margin compression and taxes. "Sustainable profitability will be key, companies need to get leaner and smarter," said Gemmell. Not all suppliers will withstand the regulatory onslaught. "There will be casualties this year," he warned. "Those who survive will be the ones that are quickest to adapt and most innovative in the new realities."
On the bright side, according to Gemmell, many consumers are staying within a repertoire of NGPs rather than going back to combustible cigarettes. Consumers, he said, are more closely assessing the value and merit of the product range—closed system vaping products, HNB products or oral nicotine products—and feeling proud that they have made the transition away from smoking. "In the near future, I hope to see a liquid-based product that consumers are just as proud of having on the table as they are of an IQOS product," he said.
Sales of nicotine pouches, meanwhile, have been accelerating at a compound annual growth rate of up to 30 percent, according to Gemmell. Pouches, he noted, are becoming more normalized in many nontraditional markets as consumers are getting accustomed to their unfamiliar sensations.
Going forward, Gemmell encouraged NGP suppliers to study the experiences of other rapidly evolving industries. Like NGP companies, electric vehicle (EV) manufacturers are solving the challenges that come with converting huge populations to new technology platforms.
"The EV sector is teaching us a lot now—not necessarily in terms of technology but in the way they are understanding and addressing consumer pain points, such as range anxiety, speed of charge, engine sound," said Gemmell. "There will also be lessons to learn on over-stocking and inventory challenges, which vapor is already facing."
He also urged suppliers to move on from "workarounds". In the past couple of years, he said, many innovations had focused on regulatory grey areas. Instead, he would like to see real innovation that has regulatory sustainability.
Wrapping up, Gemmell cautioned against what some might consider the biggest constraint of all—complacency. "That feeling of satisfaction that prevents us from trying harder," explained Gemmell. "Yet there are still 1 billion smokers," he added. "This is no time to relax." Of course, that state of self-satisfaction also represents an opportunity for the more ambitious players. "If someone is complacent," he said, "this is when someone else can surprise them."
The Global NGP Innovation & Tech Forum 2025 was one in a series of increasingly popular and influential 2Firsts events aimed at educating professionals about industry trends and best practices.
Earlier this year, the organization successfully hosted the 2Firsts Open Day, which looked ahead at 2025, and the Global NGP Compliance Development New Year Symposium. These forums brought together leading international tobacco companies, top-tier supply chain enterprises and globally renowned experts. Each gathering attracting nearly 1,000 participants in-person and reached more than 100,000 industry professionals worldwide through 2Firsts' extensive global media network.
On March 21, 2Firsts will host its Global NGP Brand & Market Development Forum in Shenzhen. Themed "Building Trust, Driving Change: Shaping the Future of NGP Brands," this forum will focus on global brand development strategies, key market trends for 2025 and innovative marketing techniques.
