Given that strategic direction, Altria could buy companies focused on those products. For example, it could acquire full control over Cronos or another cannabis company to expand into cannabis products. It could also look to buy a caffeine-pouch maker like Grinds Coffee Pouches. Altria's move beyond smoking could also see it move back into the food and beverage industry.
In 1998, its predecessor, Phillip Morris, acquired Kraft Foods and purchased General Foods the following year. While the renamed Altria spun off Kraft Foods -- now KraftHeinz (NYSE:KCR) -- to its shareholders in 2007, it could consider getting back into the food business by acquiring a snacking or confectionary company.
The company could also increase its investment in the beverage sector by raising its stake in Anheuser-Busch, buying another beer maker, or investing in another beverage category, like energy drinks or coffee. In the past, it has also invested in the wine sector (Altria sold its Ste. Michelle Wine Estates business for $1.2 billion in 2021) and could reenter the sector if it finds a compelling opportunity.
The company will also likely continue to invest in smokeless products as opportunities arise. While its $12.8 billion investment for a minority stake in e-vapor products maker JUUL Labs was a big flop (Altria exchanged its entire stake in the company for heated tobacco intellectual property rights worth $250 million in 2022), smokeless products are a key part of its future.
However, as the JUUL investment showed, not all of Altria's investments have paid off in the past. It must ensure that future investments to expand its smokeless business will grow shareholder value instead of destroying it, as the JUUL investment did.
Related investing topics
