Recently, the 2023 Global Nicotine and Tobacco Forum (GTNF) held in Seoul, South Korea attracted major international tobacco companies and several e-cigarette enterprises. Among the attending companies, Badael, a nicotine pouch company from Saudi Arabia, caught the attention of 2FIRSTS. 2FIRSTS had an in-depth conversation with Joe Sakur, the Marketing and Sales Director of Badael, discussing the company's philosophy, background, and the future of harm reduction in Saudi Arabia's tobacco industry.
Nicotine pouches, a substitute for tobacco products that have gained popularity in recent years, are placed on the inside of the user's lip to deliver nicotine without the need for traditional tobacco consumption. The objective of this product is to assist smokers in quitting while providing a more convenient and discreet means of obtaining nicotine.
Get rid of all misconceptions that involve nicotine.
Badael was established in May, 2023, with its name meaning "alternatives" in Arabic. According to its official website, Badael is purported to be a wholly-owned subsidiary of the Saudi Arabian Public Investment Fund.
Public Investment Fund (PIF) is the sovereign wealth fund of Saudi Arabia, according to publicly available information. It is one of the largest sovereign funds in the world, with estimated total assets of $776 billion, and its purpose is to represent the Saudi government in making investments. The fund has been controlled by Saudi Crown Prince Mohammed bin Salman since 2015.
Sakur shared information about the stakeholders of Badael Company, whose investments come from the Public Investment Fund (PIF), as they are committed to a shared vision of improving the quality of life for the population. The mission of this company is to reduce the harm caused by cigarettes and provide smokers with healthier alternatives.
Badael, shortly after its establishment, launched its own brand of nicotine pouches called DZRT. This product was initially introduced on their website and is now available for purchase in retail stores.
Sakur expressed that both consumers and retailers have responded positively to DZRT nicotine pouches. In addition, he stated that the company's mission is to transition smokers to healthier alternatives, which aligns with the purpose of nicotine pouches.
Sakur expressed that one of the main challenges faced by the company is to educate regulatory bodies and stakeholders in order to make them understand these new nicotine products and perceive them as a distinct product category, rather than simply comparing them to traditional cigarettes. He pointed out that this would help provide more options, allowing smokers to easily access nicotine and thereby reduce dependency on harmful cigarettes.
We want regulatory agencies and all stakeholders to have a better understanding of products and nicotine, considering these products as new entities, dispelling any misconceptions that everything containing nicotine is inherently harmful," said Sakur.
Cigarettes will always exist.
Question 2: Could nicotine pouches be the ultimate solution for nicotine products?
Sakurai responded that cigarettes will always exist. The World Health Organization defines a "smoke-free country" as having a traditional cigarette usage rate of less than 5%. Countries with a smoking rate below 5% are defined as "smoke-free countries" by the World Health Organization. Sweden is expected to achieve this goal next year, but it does not mean that no one in the country will smoke. He believes that although nicotine pouches may not completely replace cigarettes, even taking a small step can be beneficial to everyone's health.
Another topic of discussion is the regulatory issues surrounding nicotine pouches. Currently, nicotine pouches are considered consumer products in certain countries, such as Canada. However, there is an increasing trend in markets to regulate them due to their obvious nicotine content. Sakur, a representative, stated that they support moderate regulations to ensure that nicotine pouches are not accessible to minors or non-smokers. However, they also hope to maintain reasonable regulations that allow those in need to understand and use this product.
We advocate for reasonable regulation of nicotine pouches as alternatives to cigarettes," he said.
Achieve full "Made in Saudi Arabia" as soon as possible.
Sakour shared Badael's market plan. Currently, they only sell products in Saudi Arabia but plan to gradually expand to neighboring countries. The company intends to export their DZRT nicotine pouches to Gulf Cooperation Council (GCC) countries such as the UAE, Kuwait, Bahrain, and may even consider further expansion from the Middle East to global markets.
However, Saudi Arabia itself has no history of producing nicotine pouches. As a company specializing in nicotine pouches, how will Badael address the issue of raw materials?
In response, Sackler stated that currently they manufacture nicotine pouches and packaging in Saudi Arabia, but the mixture inside the nicotine pouches is imported from external sources. They plan to localize the production of the mixture in the future to achieve full internal completion of the supply chain.
It is understood that currently, the company primarily imports nicotine mixtures from Sweden, but it plans to localize production in Saudi Arabia.
Our goal is to produce products entirely locally in Saudi Arabia," said Sakur.
Sakur pointed out that the convenience and discreetness of nicotine pouches make them an attractive choice for smokers, especially in situations where smoking is not allowed, such as on airplanes, trains, or in meeting rooms. Using nicotine pouches allows smokers to discreetly and promptly obtain the desired nicotine.
He believes that smokers will gradually experience the positive effects of nicotine pouches and gradually shift to using them. Some individuals are able to successfully quit smoking with the help of nicotine pouches.
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