October 29, 2010 -
First Marlboro, Now Camel; Reynolds Taking Camel Dip Off Shelves.. On Wednesday, October 27th Reynolds announced to the trade that Camel Dip would be discontinued in 11 of the 12 states the brand was launched into. (More on Camel Dip - a premium moist snuff..; ; RAI CEO comments on the launch of Camel Dip and Camel SNUS market..; Reynolds American to launch Camel Dip in June 2009..)
Comment on Camel Dip from RAI q3 2010 earnings report.. Camel Dip, the company’s newest premium introduction, remained relatively stable in the third quarter. American Snuff continues to evaluate opportunities to strengthen Camel Dip’s marketplace performance.
The product will remain stocked in Arizona. The company says it will be shifting its focus back towards Grizzly. The chart that can be found in the Reference below shows Camel’s LTM growth trends on a sequential basis (i.e. growth of units in 3Q 10 LTM vs. 2Q 10 LTM). The product was growing strongly through the pipeline fill phase (launched in 3Q 2009), but growth severely decelerated in the most recent period to 10%.
This is another Lesson/Indicator For Lorillard’s Smokeless Plans.. First Marlboro and now Camel have seen difficulties launching an MST brand using a cigarette equity. We believe these experiences should serve as an indicator that Lorillard will likely not pursue an entry into the MST market with a cigarette brand (ie Maverick or Newport). And if there’s anyone who should be aware of this, it’s current Lorillard CEO Murray Kessler (former CEO of UST).
Comments found in news brief: April 13, 2008 - Altria's growth depends on the Marlboro name..
Nik Modi, a UBS tobacco analyst has stated, "The Marlboro brand name is not as transferable as many originally believed." Modi points out that test of Marlboro moist smokeless tobacco in Atlanta is slowly slipping down hill. Their original entry Taboka failed and has been removed and Marlboro SNUS hasn't done much better.
We're reminded by the Chief Operating Officer of UST, Murray Kessler that "Nine out of 10 smokers that try smokeless still reject the product." Kesser continues, "Clearly Marlboro is a great cigarette brand. That said, history clearly shows that it is difficult to extend brands from one one category to another."
References: Camel Dip - It’s Hard To Put Cigarettes in a Tin, UBS Investment Research Picture of the Week Vol. 42, Nik Modi, UBS Tobacco Analyst, 10/29/2010; Camel Dip Dynamics Reynolds American refocusing product, pulling back in all states but Arizona by Greg Lindenberg, CSP Daily News, 11/1/2010.