Where's The Growth in Smokeless Tobacco Products..

March 23, 2008 - Where's The Growth in Smokeless Tobacco Products.. We have heard many times that as a result of the decline in cigarette sales in the U.S. traditional cigarette companies are turning to smokeless tobacco products to bolster their growth. Smokeless tobacco sales volume actually decreased by 11% from 1986 to 2003 (from 125.5 to 114.3 million pounds)[56]; most of this decline resulted from large drops in sales of chewing tobacco and dry snuff (-49% and -67%, respectively). In marked contrast, the use of moist snuff or dip, increased dramatically over this same period (+87%); moist snuff now represents 62% of the smokeless tobacco market. (Nelson et al.,Trends in Smokeless Tobacco Use Among Adults and Adolescents in the United States, Am J Public Health 96(5)897-905, 2006 - abstract - - complete paper) The moist smokeless tobacco (MST) products are divided between premium products segment such as Copenhagan, Skoal, Kodiak and Marlboro MST and the price/value (discount)segment represented by Grizzly (Reynolds American/Conwood), Longhorn (Swedish Match, N.A.) and Husky (USSTC). The price/value segment drives overall growth in the moist snuff category. Since 2003, the share of premium brands decreased from 72% to 59.6% while the price/value offerings increased from 23.3% to 34.8% (AC Nielson 52-week period ending 12/31/2005). In 2005 alone, price/value sales increased nearly 44%, while premium can sales declined by 4.7% (AC Nielsen 52-week period ending 12/31/2005). SNUS products such as Camel SNUS, Marlboro SNUS, Skoal Dry and Lorillard's Triumph SNUS are considered part of the premium segment. As we pointed out to the Liggett people prior to the test marketing of Grand Prix SNUS, these SNUS products will have a hard time catching on and it will take many years to create public acceptance - if possible. Swedish SNUS type products have failed in most countries outside of Sweden. In the U.S. Philip Morris' Taboka SNUS and USSTC's Revel SNUS have already failed and sales of the others have done poorly. Remember the expenditure on cigarettes in 2005 was $82 billion and for the smokeless tobacco category about $3.7 billion. (TobaccoWatch.org) Click on image to enlarge.. - Incomplete in progress..