Since 1983, Kretek International Inc. has been providing tobacco products and accessories that deliver a profitable market basket to its trade partners.

Albert Jose is Kretek’s senior VP of marketing and sales, a position he’s held for the past five years. During his tenure, he’s helped navigate Kretek’s commitment to nicotine-free smokes for the U.S. market, the growth of the Cuban Rounds premium cigar brand and the relaunch of Clipper lighters. Through it all, he’s kept a firm focus on Kretek’s trade partnerships and the innovation it takes to grow. According to Jose, the quality and uniqueness of Kretek brands has kept pace with constantly shifting preferences and regulations and will be integral to building the trial, adoption and loyalty it takes to thrive.

The tobacco backbar is shrinking by $2 billion a year. What’s Kretek’s approach moving forward?

Backbar sales volume may be shrinking, but the number and variety of SKUs has doubled. Right now, most tobacco product innovations are SKUs that aren’t tobacco—they’re new products that are mainly driven by discreet use, health concerns and price. As these products continue to emerge on the backbar, consumer preferences are changing to both tobacco and tobacco-free products. Researchers actually invented the term polyusers so the migration from cigarettes to nicotine alternatives would make sense.

For quite a few years, tobacco regulation has been an on-again, off-again effort. How is Kretek dealing with this?

We’ve moved much of our business outside of FDA rulemaking. We’ve coupled our Cuban Rounds imported premium cigars with Djarum filtered cigars, and added nicotine-free botanical filtered smokes, refillable, reusable lighters and non-tobacco wraps and cones.

Administrations change—our goal is to be ready with products that can be part of a smoker’s market basket when the FDA redraws their rulemaking and as more states impose their own bans.

A main reason for Kretek’s nicotine-free products is to offer enjoyable, legal alternatives to banned SKUs. Flavor and menthol bans in California and Massachusetts offer trial markets for flavored nicotine-free products while things get settled at the federal level. Smokers in banned markets told us pretty strongly that they felt the products they enjoyed were unfairly taken away.

Why tobacco-free smokes instead of oral nicotine or some other direction?

Nicotine-free smokes are an enjoyable, legal transition for adult smokers who want to lose the burden of addiction. A surprising result of our research was that more than half of adult smokers ranked flavors and menthol as far more important than nicotine and tobacco.

The majors chose oral nicotine because it offers the sustainable transition from cigarettes they need to deliver shareholder value. Our nicotine-free Splash reflects a measurable percentage of menthol smokers who told us they’d try it if their brand was removed from the backbar.

How does Kretek look at future needs for the convenience marketplace?

We do a lot of research to understand which consumers are embracing change and deliver what they tell us they’re looking for. Today, the shape of innovation is a nicotine pouch. In 2024, pouches passed $4 billion. It’s already passed $5 billion this year and is projected to be over $40 billion by 2033—we’ll have to wait and see if that comes true.

The most pressing task is sorting through the demand for new ideas. Another growing challenge is managing the variety of expectations of each customer who walks through the door. Oral nicotine is a good example. Over the past five years, almost seven million smokers have quit. During the same period, more than eight million have adopted vape and oral nicotine.

Change is a moving target: The category tomorrow will be different from today. Kretek’s game plan, if you will, is to look where we believe changes will happen and why. A good quarterback doesn’t throw to the receiver—he throws to where the receiver is going to be.

We will continue to be watchful over the next few years. The FDA still sees addiction as a major health issue and will zero in on it at some point. How many polyusers are now choosing 6 mg or 9 mg pouches? How many will discover how good a menthol smoke tastes, even without the nicotine?

How did Kretek get to where it is today?

First and foremost, Kretek has always worked at being a great partner. We’re still a family business, similar to many of our distributors. Our constant goal is to offer a better consumer experience and help our retail partners bring it to market.

We brought Djarum to the United States 42 years ago as an outlier product line with eclectic, educated, young consumers. Kretek’s early focus was on local distributors, local tobacco shops and local alternative retailers. C-stores found us and saw the spontaneous loyalty of these distinctive smokers.

How have you maintained your presence in the face of larger competitors?

We explore new product ideas whenever we see a trend on the horizon. We expanded Cuban Rounds premium cigars into c-stores several years ago because there was nothing like it in terms of cigar satisfaction, value and margins for retailers. Now it’s the No. 1 premium cigar in c-stores for the third year in a row.

In 2024, we became Clipper Lighters’ U.S. partner. Clipper’s unique product appeal extends to the alternative market, and their broad range of torches, grill lighters and hardware, could be just right for a c-store mini-hardware section.

Aren’t you really just providing an alternative form of cigarettes?

We avoid the word “cigarettes” because Djarum Bliss and Splash both fall well outside that legal definition. Cigarettes are made from tobacco. Bliss and Splash are clearly labeled non-tobacco and nicotine-free. Just the absence of nicotine gives smokers more personal control over how often they light up.