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Planning for Bic-tory

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I was at a 7-Eleven one early morning, having breakfast. From where I sat, I saw the display shelves behind the counter. They were full of various brands of cigarettes. And this, to me, indicated that despite the increase in taxes on tobacco products, the ban on smoking in public places as well as tobacco advertising, and the big and bold graphic health warnings on cigarette packs, many people still continue to smoke.

Perhaps it is this understanding of the strong “power” of smoking that has allowed even some decades-old consumer goods companies to press on. The tobacco industry, in a way, has given them a longer lease on life. A contrary view, perhaps, to the health warning that smoking “kills.” For in the case of the French Bic company, for instance, smoking actually allows it to live on, and profitably at that.

The rack of Bic disposable lighters was just as prominently displayed as the cigarettes themselves inside the convenience store. And rightly so, perhaps. Gone is the era when smokers also carried boxed matches or giveaway matchbooks from restaurants and bars. Nowadays only a few carry re-usable lighters like Zippo, which have now become more like a fashion statement and a collectible. Most smokers now opt for disposables. And so, in markets like the Philippines where smoking continues to flourish, so do Bic lighters.

Societe Bic SA, or Bic, is based in Clichy, France. It was founded in 1945 and is among the world’s biggest producers of disposable consumer products. Its disposable lighters first came into the market in 1973, or about 46 years ago. This was a year after Cricket, in 1972, started producing cheap disposable plastic lighters. Yes, disposable lighters are nothing new. But, for a company like Bic to continue to profitably sell the same product for almost 50 years, is a tribute to its staying power.

And this is given the fact that the tobacco industry reportedly peaked way back in the 1960s, and since 1965 has reportedly been on a slow decline. But, in terms of absolute numbers, the industry is far from dying. Data from the Centers for Disease Control in the United States show that US farms harvested more than 533 million pounds of tobacco in 2018. And that just a year before, in 2017, about 249 billion cigarettes were still sold in the United States even as, on average, federal and state excise taxes accounted for about 44.3% of the retail price of cigarettes. This sales data excludes the sales of smokeless tobacco as well as e-cigarettes.

As for Bic, by launching its lighter in 1973, it still caught the tail-end of the tobacco peak. And despite the slow, steady decline of tobacco and the advent of the e-cigarette era, the company continued to profitably retail its lighters. To date, it is the No. 1 lighter brand in the United States. It is cheap, and thus popular. In 2016, it reportedly cornered more than 34% of the US market for disposable lighters. North America is in fact Bic’s biggest market for all its products, followed by the “developing markets,” and then, Europe. In 2018, the company made nearly €2 billion in net sales globally.

However, what I find more interesting is that Bic continues to remain strong after 74 years by relying on only three main product categories: stationery, lighters, and shavers. In the fast-moving consumer goods business, having “limited” product lines can be risky. On the other hand, such limitation can also allow a company to remain focused in terms of product development and innovation, and ensuring sustainability.

Of its three main product lines, the oldest line — stationery — continues to sell the most. Unsurprisingly, considering that theses are mainly pens and other writing and coloring products. Lighters follow closely at second, and then shavers, at a far third. In 2018, stationery products accounted for about 40% of net sales, followed by disposable lighters at 35%, and then disposable shavers at 22%. Incidentally, Bic has been selling its pens since 1945, and its one-piece polystyrene shaving razors since 1975.

I can understand why pens continue to lead the way. There is obviously a big market for such a product. And for shavers as well. Billions of people shave every single day, men and women. But, disposable lighters? There have been plenty of initiatives worldwide for several decades now to curb smoking. Yet, the industry continues to survive. It has, in fact, innovated with the shift to e-cigarettes. Unfortunately for Bic, if this alternative truly catches on, it may reduce if not eliminate the need for disposable lighters. At this point, I am certain that Bic is already planning for this eventuality.

A final point of course is the issue of environmental sustainability. Being among the largest producer of plastic-based disposable consumer products, one can only imagine the billions of used pens, lighters, and shavers now in landfills or floating in the oceans. With Bic’s success comes the great responsibility to help with the cleaning up.

In Australia, for example, in partnership with TerraCycle, all brands of pens and markers are now 100% recyclable in Australia and New Zealand. Bic launched the Writing Instruments Recycling Program to encourage schools, offices, and communities across Australia and New Zealand to collect and recycle used pens, markers, and other writing instruments. The products are given back to local communities after they are recycled into garden beds, park benches, and even playgrounds.

Considering that “developing markets,” presumably including Southeast Asia and the Philippines, is Bic’s second biggest market next only to North America, I believe a similar recycling effort should be undertaken locally. It is bad enough that smokers continue to litter our streets with cigarette butts, despite ordinances against this. Bic’s pens and lighters shouldn’t end up the same way. Not even in landfillfs, if they can actually be recycled into park benches and playgrounds for kids. “Pens to parks” or “Light to Play” or “Write to Play” programs should be considered.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

The post Planning for Bic-tory appeared first on BusinessWorld.

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