New structure involves establishment of two divisions and a new chief growth officer as well as aligning product development efforts.
Altria Group Inc. has introduced a new structure to maximize its core tobacco businesses while realizing its aspiration to be the U.S. leader in authorized, non-combustible, reduced-risk products.
Key components of this new structure include:
Establishment of two divisions – core tobacco and innovative tobacco products;
Creation of a Chief Growth Officer function to accelerate speed to market for innovative products and technologies; and
Aligning product development efforts more directly to the core and innovative tobacco product businesses.
“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,” said Howard Willard, Altria’s chairman and CEO. “We expect this new structure to accelerate our innovation pipeline, maximize our core tobacco businesses and allow us to continue to reward shareholders.”
Core and Innovative Tobacco Products
Altria will adapt its structure from a chief operating officer who oversees all operating companies to a structure aligned with the company’s dual strategies – maximizing income from core tobacco businesses and growing new income with innovative tobacco products.
PM USA, USSTC, Middleton, and Nat Sherman will form Altria’s core tobacco division.
Jody Begley, as senior vice president, Tobacco Products, Altria, will oversee the core tobacco businesses, as well as their product development and engineering support. He will report to Billy Gifford, vice chairman and CFO. Leading those businesses will be:
Heather Newman, President and CEO, PM USA
Shannon Leistra, President and CEO, USSTC
Ryan Bauersachs, Managing Director and General Manager, Middleton
Dominik Meier, Managing Director and General Manager, Nat Sherman
Begley has been president and general manager of Nu Mark since 2015. He brings to this role 23 years of experience in sales, marketing and strategy from PM USA, USSTC and Nu Mark, as well as leadership positions in Altria Group Distribution Company and Strategy & Business Development.
Nu Mark, Altria’s innovation company, will focus on developing a compelling portfolio of non-combustible products that adult smokers enjoy and have the potential to drive adult smoker conversion. This portfolio includes oral nicotine-containing products, e-vapor and innovative inhalable products.
Brian Quigley, as president and CEO, Nu Mark, will oversee the innovative products business, reporting to Howard Willard. Quigley has been president and CEO, USSTC since 2012. He joined PM USA in 2003 and has served in brand management leadership roles in PM USA and USSTC.
Chief Growth Officer
Altria has established a Chief Growth Officer function, which will identify and pursue Altria’s strategic and innovative growth priorities across the tobacco landscape. This function will identify marketplace and adult tobacco consumer insights and translate them into strategies for product development, consumer engagement, future of commerce and business development.
This group will also be responsible for innovative product development and enhancing the company’s capabilities by building and acquiring the competencies, technologies and talent to achieve Altria’s aspiration of being the U.S. leader in authorized, non-combustible, reduced-risk products.
K.C. Crosthwaite is appointed senior vice president and chief growth officer, Altria Client Services LLC (ALCS), reporting to Howard Willard. K.C. has been president and CEO, PM USA for the past year. Before that, he was vice president, strategy & business development, ALCS, and VP & general manager, Marlboro, PM USA. K.C. joined PM USA in 1997 and brings to his new role many years of experience leading and supporting major brands.
These changes will be effective June 1, 2018.
Wells Fargo Weighs In
Wells Fargo Securities said Altria Group’s new organizational structure “makes a lot of sense to us especially in light of the company’s vision to lead in ‘authorized, non-combustible reduced-risk products (RRPs)’ in the U.S. while maximizing income from its core cig/smokeless businesses.”
Wells Fargo noted that Altria has a long history of promoting from within and rotating talent to deepen managerial/operational experiences.
“Ultimately, we view the announcement favorably and note that it marks Howard Willard’s first major directive since assuming the role of CEO on May 17. We reiterate our Outperform rating on Altria,” said Bonnie Herzog, senior analyst with Wells Fargo.