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Altria Changes Its Organizational Structure And Names New Leaders As It Aims To Develop New Products Source from: Richmond.com 05/23/2018  Altria Group Inc. is making leadership and organizational structure changes as the Henrico County-based tobacco company looks to diversify its business and develop new products. The parent company of top U.S. cigarette maker Philip Morris USA said Tuesday it is creating two new divisions — one for its “core” tobacco products such as cigarettes, cigars and smokeless tobacco, and one for “innovative tobacco products” such as e-vapor products, often referred to as electronic cigarettes or e-cigarettes. A spokesman said the changes will not affect the company’s employment or how Altria reports its business results to shareholders. The organizational shift comes as Altria and other cigarette companies compete for customers in a slowly declining U.S. cigarette market, while also adapting to the introduction of new products such as e-cigarettes and regulation by the U.S. Food and Drug Administration. The company said the changes will help support its “dual strategy,” which includes both maximizing income from its core, conventional tobacco businesses, while adding new income from innovative tobacco products. “This is a dynamic time in the tobacco industry, and just as we lead in traditional tobacco products, we intend to lead in offering adult smokers more choices in innovative, non-combustible, reduced-risk products,” Howard Willard, Altria’s new chairman and chief executive officer, said in a statement. “We expect this new structure to accelerate our innovation pipeline, maximize our core tobacco businesses and allow us to continue to reward shareholders,” Willard said. Several leadership changes were announced, effective June 1, including the creation of a new executive role — chief growth officer — which will be filled by K.C. Crosthwaite, who most recently served as president and chief executive officer of its cigarette business, Philip Morris USA. Taking over as president and CEO of Philip Morris USA is Heather Newman, currently vice president and general manager for the company’s top cigarette brand, Marlboro. Leading the core tobacco businesses as Altria’s senior vice president-tobacco products is Jody Begley, who has been president and general manager of Nu Mark since 2015. The core tobacco businesses include Philip Morris USA, cigar maker John Middleton, smokeless tobacco maker U.S. Smokeless Tobacco Co., and premium cigarette and cigar maker Nat Sherman. The restructuring is not surprising given the emphasis Altria has placed on smoking alternatives as a potential way to counter falling cigarette consumption, said Steve Marascia, who follows the company as director of research for Capitol Securities Management Inc. in Henrico County. In 2013, Altria’s product innovation subsidiary, Nu Mark, introduced its own e-vapor product, MarkTen, and, in 2014, it acquired the e-vapor business of Green Smoke Inc. “Hopefully, investors will be given more clarity in [Altria’s] alternative segments business as the company makes this move and may be able to show the actual sales growth of these new products, which up to now had been opaque,” Marascia said. Analyst Bonnie Herzog of Wells Fargo Securities LLC said in a note to investors that the organizational structure “makes a lot of sense” given the company’s strategy. As part of the leadership changes, Brian Quigley, the president and CEO since 2012 of the company’s U.S. Smokeless Tobacco Co. business, will become president and CEO of Nu Mark. Other leadership roles announced on Tuesday were: Shannon Leistra becomes president and CEO of U.S. Smokeless Tobacco Co.; Related Updates |