Tobacco Business Overview

A global business

The JT Group has grown its tobacco business globally, marketing and selling our brands in some 120 countries. To achieve further growth, we will continue to make long-term investments, carry out focused marketing initiatives, improve product quality and strengthen our cost competitiveness and sales channels.

Supporting sustainable growth through investments from long-term perspective

Countries and regions where the JT Group sells its products

The JT Group has reinforced its business base through M&As such as RJR Nabisco's non-US tobacco operations in 1999 and Gallaher in 2007, and has also expanded its product variety by acquiring two e-cigarette companies, Zandera in 2014 and Logic in 2015. In 2016, we acquired the Natural American Spirit business outside the US, which allowed the JT Group to enlarge its brand portfolio to meet various needs of consumers. In addition to M&A, we have invested heavily in our brands from a mid- to long-term perspective and expanded our geographical coverage. We will continue our investments for further growth.

Growing our brands around the world

We develop new products based on the dynamics of individual markets, with a view to meeting the diverse demands of consumers around the world. Our Global Flagship Brands* (GFBs), such as ‘Winston’, ‘Camel’ and ‘Mevius’, have a strong presence in major markets across the globe. We will continue to enhance the product power of our GFBs by updating our product and package designs.

* 'Winston', 'Camel', 'Mevius', 'LD', 'Benson & Hedges (B&H)', 'Glamour', 'Sobranie', 'Silk Cut', and 'Natural American Spirit'

Innovation beyond conventional thinking

To meet the diverse and changing preferences of consumers, the JT Group has been working not only to improve product quality in the taste and flavor of our conventional cigarettes but also to develop new types of tobacco products. The emerging products category has been growing in recent years, and we now offer various products in European and US markets. In Japan, we have launched ''Ploom TECH*'', a new type of tobacco vaporizer** for enjoying smooth and clear tobacco taste with no combustion and no direct heating. We will continue to take on innovation challenges beyond conventional thinking as we constantly strive to achieve high consumer satisfaction.

* We refer to the mist-like substance that contains ingredients derived from tobacco leaves as ''tobacco vapor''
** ''Ploom TECH'' has been launched online nationally and at certain stores in several areas in Japan.

Sustainable growth based on diverse human resources

Our business thrives on the diversity of our employees, and we grow our business by developing our talent. We promote training for personal development, provide opportunities for international assignments within the Group, and strive to make continuous improvements to the workplace environment. JT International (JTI), leading the JT Group's international tobacco business, employs people of more than 100 nationalities. We create value by encouraging collaboration among people with different cultural backgrounds and views. The diversity of our human resources is a key source of sustainable growth.

A strong presence in Japan

The JT Group earns around 40% of its operating profits in the Japanese domestic tobacco market. JT products account for approximately 60% of the Japanese tobacco market. We have achieved this through the strength of our product brands - our greatest assets - and our world-class technological know-how. We use the latest innovation to develop, manufacture and market our tobacco products. With such a major competitive advantage, the domestic tobacco business will continue to play its role as the JT Group's platform of profitability.

Leading the market through strong brand portfolio

The Japanese domestic tobacco business is an important market in which the JT Group earns around 40% of its operating profits and has secured around 60% market share. We have achieved this on the strength of our brands - our most valuable assets.
Among our key brands, 'Mevius,' which is Japan's No.1 brand,* has a strong presence in Japan and many other countries in Asia and remains popular following the name change from 'Mild Seven' in 2013. We have also achieved robust sales of 'Winston,' another key brand that integrated 'Cabin' and 'Caster' in 2015. We will continue to maintain our market superiority and further generate profit through our competitive brands.

* Source: Tobacco Institute of Japan

Supporting our trade partners to help them meet consumers' needs

We are helping to maximize the potential of stores to enhance customer satisfaction, by offering a wide selection of products according to customer demands as well as the market dynamics of individual sales areas and retail channels. Our trade marketers work with retail stores across Japan, providing marketing support according to the characteristics of each store. This includes providing advice on range and store layout to help consumers easily find and buy the brands they want. Our support for our trade partners demonstrates our commitment to achieving a high level of consumer satisfaction.

Delivering quality goods to consumers

We are constantly improving the quality of our products. In order to ensure a stable supply of quality tobacco leaf, the principle raw material for our products, we provide support to tobacco farmers to help them improve their productivity. We also focus on building an optimal manufacturing system to ensure an efficient and timely supply of quality products to the market. We will continue to strive for quality improvement throughout the process from procurement to manufacturing and marketing, so as to deliver quality and reliable products that meet consumer demand.

Creating new value through R&D

Through our global R&D network, we develop products for consumers worldwide through research and technological development carried out in Japan. Our R&D activity is focused on speed and flexible collaboration with other teams in the business, making use of the diverse expertise and individuality of each one of our employees. We are constantly challenging ourselves to create new value to meet the varied and evolving demands of our consumers.

Nurturing understanding and respect between smokers and non-smokers

Toward the goal of creating a society where smokers and non-smokers can coexist in harmony, in Japan, JT has been carrying out various activities, such as calling for better smoking manners and promoting separation between smoking and non-smoking areas. By doing so, we will aim to create a society comfortable for both smokers and non-smokers.

Promoting better smoking etiquette

"Pick Up Litter and You Will Love Your City" initiative

Awareness-raising activities aimed at better smoking manners.

JT has been encouraging a community clean-up campaign.

Promoting smoking area separation

Prevention of smoking by minors

JT consults on and promotes separation between smoking and non-smoking areas.

We will further strengthen cooperation with related organizations and tackle this challenge more vigorously.