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[KH Interview] Korea central to BAT's smokeless pivot: COO
London-based tobacco giant targets 50% of sales from non-combustibles by 2035
British American Tobacco, one of the world's largest tobacco firms, is reinforcing its commitment to South Korea as a strategic hub for its smokeless transformation, positioning the country as both a key innovation testbed and a competitive frontline for next-generation nicotine alternatives, according to the group's top executive.
BAT Group Chief Operating Officer Johan Vandermeulen said Korea's value to the London-based group extends far beyond immediate sales, speaking in an exclusive interview with The Korea Herald at the headquarters of the group's Korean unit, BAT Rothmans, in Seoul on June 20.
'Korea offers a unique blend of sophisticated consumers, cutting-edge technology and a dynamic regulatory environment that makes it an ideal testing ground for our next-generation products,' said Vandermeulen, a 30-year BAT veteran who assumed the role of global COO in 2023. He visited Korea as part of an Asia tour that also included Japan and China.
Korea was the second market globally to launch BAT's tobacco heating product Glo in 2017, and is currently the second-largest heated products market globally — two signs that reflect BAT's confidence in Korea as a proving ground for innovation, he said.
Since then, the Korean heated tobacco market has become one of the most competitive in the world, with nearly every major global player vying for market share.
BAT is aiming to stay ahead by focusing on product innovation, localization strategies and technology enhancements tailored to Korean consumers, who Vandermeulen described as 'distinct and trend-sensitive.'
'BAT Rothmans here possesses exceptional capabilities, and our manufacturing facility in Sacheon (in South Gyeongsang Province) is regarded as one of the best within the entire BAT Group,' he added. 'Innovation, technology and talent — these are the core strengths of the Korean market, and why BAT is so focused on it.'
The company's Glo Hyper series was the first device in its lineup to feature a display screen and boost button, both aimed at improving user experience. BAT developed the heating sticks specifically for the Korean consumer palate.
BAT has also rolled out its vapor brand, Vuse, in Korea, emphasizing quality, product stewardship and responsible marketing. The devices come in various formats — slim and box types — and exclude flavors and features that could appeal to minors.
'We ensure that our vapor products are first stewarded at an ingredient level. Ingredients to be included in e-liquids must be, at minimum, food grade, with nicotine being pharmaceutical grade. We believe similar standards should be formally introduced and required for vaping products across the industry,' he said.
Alongside Glo and Vuse, BAT is expanding globally into nicotine pouches — a category that does not involve inhalation and is now its fastest-growing segment, already launched in over 40 markets. While not yet available in Korea, the company sees opportunity as consumer preferences continue to evolve.
At the heart of BAT's strategy is its mission of "A Better Tomorrow," which aims to build "A Smokeless World" by offering science-backed, non-combustible alternatives. The company aims to increase the revenue share from these products to 50 percent of its total by 2035, up from the current 17.5 percent, and to grow its adult user base to 50 million by 2030, from over 29 million today.
This transformation aligns with BAT's Tobacco Harm Reduction philosophy.
'We aim to offer alternatives with reduced risk profile to cigarettes to adult smokers who would otherwise continue to smoke, thereby making a positive contribution to reduce the public health burden associated with cigarette smoking,' Vandermeulen said.
On regulation, BAT supports clear, fair and consistent policies across the industry. 'We believe regulation should be clear, consistent and fairly applied. Provided these conditions are met, we view regulatory changes positively.'
Still, Vandermeulen expressed concern over the rise of illicit vaping products, warning they undermine public trust and legitimate market efforts. 'This is ultimately about corporate responsibility,' he said.
'Proper regulation and enforcement are essential to protect consumers and ensure fair competition.'
With nearly one billion smokers still using traditional cigarettes worldwide and only about 115 million having switched to smokeless alternatives, Vandermeulen said the stakes are high.
'We believe vaping has a vital role in encouraging adult smokers, who would otherwise continue smoking, to switch completely to smokeless alternatives. But the category can only thrive if market order is preserved.'
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