The Art of Making: Philip Morris International on Delivering a Smoke-Free Future
4 minutes read
Introduction by: Peter Marshall
During a recent visit to the extraordinary Philip Morris International (PMI) Manufacturing and Technology facility in Bologna, I met with four executives driving the company’s mission toward a smoke-free future.
Dedicated and passionate, they spoke with conviction about innovation, agritech, and the latest heat-not-burn, vaping, snus and nicotine pouch products. I hope this multi-media feature gives you new insights into how PMI are delivering their vision for a smoke-free future.
https://www.pmi.com/video/its-time-to-make-smoking-history
Pasquale Frega, Presidente e Administratore Delegate, Philip Morris, Italia: From Tobacco Tradition to Technological Transformation
In Italy’s Emilia-Romagna region – home to Ferrari and world-class engineering – PMI has built more than a factory: it has built a symbol of transformation.
“To understand what this site means, you have to go back to 2014,” said Pasquale Frega. “That’s when we launched our first smoke-free product, IQOS, in Milan and Japan, and decided to invest in Bologna.”
That decision marked a turning point for the company – the €1.5 billion investment becoming Italy’s largest industrial project of the century. The site now exports to more than 70 countries, generating almost €2 billion annually.
What makes Bologna remarkable is its automation. “No one touches the product, operators manage everything digitally. It’s 21st-century manufacturing – driven by AI, data, and precision,” Pasquale said.
In 2022 PMI opened the Institute for Manufacturing Competencies, bringing universities and startups together to accelerate innovation. “We’re not only transforming ourselves, we’re creating an ecosystem that spreads innovation across the region.”
Mircea Scaunasu, Vice-President Commercialisation Heat-not-Burn: On Building the World’s Leading Smoke-Free Brand
For Mircea Scaunasu, IQOS represents both technological and cultural change. Since its 2014 debut, more than 34 million adult smokers have switched completely, with IQOS now “the world’s leading heated-tobacco brand.”
The science underpinning that success is decades in the making. “As early as the 1980s, researchers identified that most smoking-related diseases came from the chemicals created by burning tobacco,” Mircea noted. “Remove combustion, and you remove the source of those harmful compounds.” That insight led to PMI’s smoke-free platforms – heated tobacco, vaping, and oral nicotine.
PMI now operates in 95 markets, with 16 factories producing smoke-free consumables. “Where consumers understand the alternatives, conversion rates are much higher,” Mircea said. “That’s why we work with regulators and health stakeholders to help adult smokers make informed choices.”
At PMI’s R&D center in Neuchâtel, hundreds of scientists and physicians expand this portfolio. “There are still over a billion smokers globally – we need multiple solutions,” he added.
Mykhailo Shurinov, PMI President e-Vapor on The Responsible Vaping Vision
For Mykhailo, the company’s approach to this rapidly evolving category is guided by one principle: responsibility.
“The vaping industry is flooded with products, but not all are designed with adult smokers in mind,” he said. “We see ourselves as the ‘adult in the room.’”
PMI’s vape brand, VEEV, now operates in 44 markets, with a focus on quality, taste, and safety. “Flavour satisfaction is key,” Mykhailo said. “Like in food and beverage, flavour determines enjoyment – and helps adult smokers make the switch and stay smoke-free.”
He described five pillars behind PMI’s ‘Make Vaping Right’ commitment:
- Product quality and design, ensuring appeal only to adults.
- Responsible marketing
- Premium, user-friendly design for easy conversion.
- Youth access prevention
- Sustainability.
“These aren’t just words. 80% of our product materials are recyclable. And across all markets, VEEV does not appear among products used by underage consumers – a testament to our teams’ vigilance.”
Only years after launch, VEEV is already the leading closed-pod vape in six markets. “We’re setting standards for how vaping should be done.”
Jacob Preisler PMI Vice-President Oral Smokeless: A Heritage of Innovation – Reimagined in ZYN
If vaping is the new frontier, oral smokeless products are a rediscovered one. Jacob explained how PMI’s oral nicotine brand, ZYN, builds on a long Nordic tradition.
“Snus has existed for centuries,” he said. “Over time, it evolved, from loose tobacco to pouches, and now to modern nicotine pouches containing only food-grade ingredients and nicotine.”
The appeal is clear: convenience, discretion, and vastly reduced risk. “Nicotine pouches eliminate combustion, and with that, over 99% of the toxicants found in cigarettes,” he noted. “Sweden, where oral smokeless use is high, now has just 5.3% smoking prevalence.”
PMI entered the category in 2022 through its acquisition of Swedish Match, creator of ZYN, now the world’s leading nicotine pouch brand. “In 2024 we sold 640 million cans, mostly in the U.S., where growth rose 51%, internationally, 75%.”
To meet demand, PMI is expanding capacity in the USA, Czech Republic, and elsewhere. “ZYN was the first pouch brand to receive FDA authorization as a modified-risk tobacco product, a validation of its harm-reduction potential.”
Pasquale Frega: Skills, Sustainability, and the Italian Ecosystem
PMI’s transformation from cigarette manufacturer to consumer-technology company requires new skills. “We needed engineers, data scientists, automation experts. That’s why we chose Emilia-Romagna, home of Ferrari and a hub for mechatronics and advanced engineering.”
The company’s supply chain has evolved too. “We collaborate with 8,000 companies, including 1,100 farms,” Pasquale said. Through its Digital Farmer Program, developed with Italian universities, PMI has helped modernize local agriculture. 87% of PMI partner farms now use agritech, compared to 22% nationally.
PMI’s Center for Industrial Excellence unites 500 specialists relocated from Switzerland to work alongside production teams. “It’s where innovation meets execution,” said Frega. “We produce not only products, but also the next generation of manufacturing solutions.”
Emotion and Experience: The Future of Smoke-Free Brands
Despite all the engineering, PMI’s leaders agree the transformation is emotional as well as technological. “When IQOS reached $10 billion in annual revenue – faster than Amazon or Tesla – it showed that innovation and consumer trust can coexist,” Mircea Scaunasu said.
https://www.pmi.com/video/the-future-reimagined
“But it’s not just about growth. It’s about connecting with people,” he added, citing PMI’s collaborations with artists at Milan Design Week. “We want smoke-free living to be aspirational and culturally relevant.”
The Bologna site embodies that unique mix of heritage and innovation – a place where industrial craft meets digital design, and where an industry once defined by combustion is now led by curiosity and science.
As PMI continues to evolve, that emotional connection – anchored in science, technology, and responsibility – may just be its most powerful driver.
