UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment..

April 25, 2008 - Be the 1st to know.. UST, Inc. Executives Very Disappointed in Sales of the Entire SNUS Segment.. Comments from Murray S. Kessler, Chairman and CEO, UST, Inc. and Dan Butler, President of USSTC (United States Smokeless Tobacco Company) - UST, Inc. Q1 2008 Earnings Call Transcript, 4/24/2008. (UST Inc. is a holding company for its principal subsidiaries: USSTC and International Wine & Spirits Ltd.. USSTC is the leading producer and marketer of moist smokeless tobacco products.) Mr. Butler is very disappointed with the progress of the SNUS segment in total. The entire segment itself has gained very little traction, and we had plans to be more aggressive. Frankly, we are revisiting those because the size of this market and how slowly it's developing -- it's so tiny and taking so long to gain any traction. We've got almost seven years of experience with Revel SNUS and our competitors out there now for a couple of years -- we're struggling whether this segment is really going to take hold or not and whether an American consumer is really interested in this form of tobacco or not. So, we will probably continue some testing and make some modifications, but we are less enthusiastic and, frankly, disappointed. Regarding R.J. Reynolds Tobacco recently announced that they're going to roll out their Camel Snus marketing to a number of more metropolitan markets like New York City and San Francisco. ( TobaccoWatch.org comments on the expansion of the Camel snus test market.) I can't speculate on what Reynolds approach is. Obviously going into metro markets is a different kind of approach. From our perspective, the category still has not gained significant traction and quite frankly, we're disappointed in the consumer response to it. We've all talked about the fact that it's going to take time and education to create a consumer awareness and trial. But what we're seeing in market for all of the players is, versus some reasonable velocities in the early days when they were very heavily promoted, sequentially the volume has really not held up and has declined overtime. So, we're really trying to figure out the right steps to take going forward and what the appropriate approach and level of investment is in the segment.

Murray Kessler - We are very disappointed in the total performance of whether -- they call it Snus or we call it spit-free. We've been testing this thing now for seven years. The newer entrance, if you go back, is now, in original markets, is over two years, and it is not gaining the traction, given the level of investment that's been put there. (TobaccoWatch.org)