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GREENSBORO, N.C. -- As smoking bans take hold everywhere and cigarette volume continues to decline, alternative tobacco products are steadily moving in and staking a claim in the future of the tobacco category. According to Lorillard Inc. Chairman, President and CEO Murray Kessler, the future of tobacco lies in electronic cigarettes, traditional smokeless tobacco products, dissolvable products and snus.
For Kessler -- and Lorillard -- a sure bet seems to be with electronic cigarettes, which are on a similar growth path as the multibillion-dollar traditional smokeless tobacco segment.
Appearing on the Wall Street Journal's "Boss Talk" program, Kessler explained that by entering the e-cigarette arena, Lorillard now has "a seat at the harm reduction table." Lorillard took that seat when it acquired blu eCigs in April 2011, becoming the first of the big three tobacco companies to have an electronic cigarette product.
"I think that the fighting of the past and the battles in court need to be put to bed, and the public health community and the tobacco industry need to work together on harm reduction alternatives that appeal to smokers [and] that can both benefit public health and benefit business. When they are aligned, I think you will see a lot of magic happen," he said.
Currently, Lorillard ranks third among the big three, behind The Altria Group and Reynolds American Inc. However, the Greensboro-based company is the largest electronic cigarette manufacturer in the United States.
Kessler acknowledged that the tobacco industry continues to face heavy scrutiny from every corner, with electronic cigarettes also facing an unknown regulatory future.
"I believe it is my job to get out there, engage and educate the folks…multiple trips to the [Food and Drug Administration], multiple trips to Washington, talking about the issues and letting people see we are reasonable and responsible and willing to work with them," Kessler said, describing what he does to manage regulatory risk.
When it comes to strengthening the company from within, the chief executive explained that bringing in new recruits to meet the employees is key.
"The No. 1 way I get people to join this company -- and I haven't made a lot of changes as CEO -- is to get them to meet the great people here. There is a reason we have very long-term tenured people that are passionate, committed, love this company, feel like they are part of a family," Kessler said. "There aren't many interviews people go on where they see the company has gained market share for 11 consecutive years, and continues to create value and continues to win on every single metric."
As for his personal tobacco use, the former CEO of U.S. Smokeless Tobacco Co. said he still enjoys the occasional dip.