Grand Prix SNUS - Why Take the Risk on SNUS?? - A Product Consumers Find Unacceptable..

February 27, 2008 - Liggett is following closely in the footsteps of Reynolds American Inc. (RJR) and Philip Morris USA (PM) in testing SNUS in select U.S. markets. In May 2008 Grand Prix SNUS will be sold in seven of the eight metropolitan areas being used by Reynolds for Camel Snus - Columbus, Ohio; Dallas/Fort Worth, Texas; Indianapolis; Kansas City; Orlando, Fla.; Portland, Ore.; and Raleigh, NC. Philip Morris is selling Marlboro SNUS in Dallas and plans to begin testing it in Indianapolis in March. United States Smokeless Tobacco Company (UST)has been trying to market a SNUS product, Revel, since 2001 with little success. Taboka Tobaccopaks, a PM SNUS product, did not perform well and is being pulled. Tobacco companies are in agreement for SNUS to catch on and be a strong seller it's going to require more public awareness and education. Tobacco companies are limited on how this can be accomplished. They have tried reducing prices, giving away free coupons at c-store and also various bars, printing brochures about SNUS and web sites identifying the glories of sucking on a tea-bag that must be placed in one particular place in your mouth without any movement for at least 30 minutes. Our friends in Dallas tell us when the Marlboro SNUS first arrived, it seemed very expensive, but now there are deep discounts and price promotions. Lots of the promotion has been in conjunction with Marlboro cigarettes – promotional signs on cigarette displays, samples of SNUS and coupons in cigarette packs, etc. with little success. Nik Modi, a UBS tobacco analyst has stated, "The Marlboro brand name is not as transferable as many originally believed." The guys that know the smokeless tobacco category tell us history clearly shows that it is difficult to extend brands from one category to another. In order for PM USA to be a significant player in the smokeless tobocco category they'll need to expand through acquisitions (e.g., PM-UST, PM-Swedish Match). Tobacco companies have used various taglines such as for Skoal Dry "No Smoke, No Spit, No Boundaries", Camel SNUS "Pleasure for Wherever" and Marlboro SNUS "Flavor Anytime" to try to arouse curiosity. Those that have showed any interest are youngsters. Here's a comment from a Metroblogging User - Portland, OR where Camel SNUS is being tested. It doesn't take a genius to see what a boon SNUS would be to underage users. Heck, you could sit in class with some in your mouth and no one would be the wiser. You could probably hide this stuff from teachers and parents pretty easily. ("You SNUS, You Lose" posted by PAgent at 1:50pm on January 8, 2007). You wonder if any market research was done at Liggett before making the commitment to enter the SNUS market. With the decline in cigarette sales maybe there was no alternative if you want to stay afloat in the tobacco business. Ronald Bernstein, the president and chief executive of Liggett, thinks his company will be the first to offer a price-value alternative to consumers. Others are already trying to sell SNUS at lower prices without success. Murray Kessler, Chief Executive Officer at UST - the world's leading producer of moist smokeless tobacco products - tells us that nine out of 10 smokers that try smokeless reject the product. As Swedish Match, the world's second largest maker of snuff, has learned in Russia a country with no prior SNUS tradition and with 65% of males smoking - it is a matter of marketing an entire new behavior pattern and teaching consumers. In Raleigh, N.C., a test site for Camel SNUS at c-stored RJR sales people have been removing SNUS advertisements and replacing them with cigarette signage. The growth in the smokeless tobacco area is driven primarily by strong volume and share gains in the lower priced brands — namely Longhorn (Swedish Match, N.A.), Husky ((99cents Raleigh area, USSTC), and Grizzly (Conwood) NOT PREMIUM. In 2006 in the United States cigarettes accounted for more than 90 percent of expenditures on all tobacco products. The expenditure on cigarettes in 2005 was $82 billion and for other tobacco products was $6.2 billion (of this the smokeless tobacco category was about $3.7 billion). In order for cigarette companies to make up for the loss in cigarettes sales they have to aggressively market smokeless products doing everything possible to recruit new users for years to come. The Craver article - Bill Godshall, the executive director of Smokefree Pennsylvania, a proponent for the use of SNUS by inveterate (hard-nosed, long established, deep-rooted) smokers that refuse to quit is now advocating the use of SNUS for all smokers. One of his comments: "The lower cost of the Liggett product may encourage more smokers to go smokeless." David Howard, a spokesman for Reynolds, said RJR plans to add nine new test markets for Camel Snus by early May 2008. ( in part - "Liggett follows suit with its own SNUS - Competition will help gauge consumer acceptance Camel spokesman says" by Richard Craver, Winston-Salem Journal, 2/27/2008) See news brief below for further information on Leggett Group's new SNUS entry. ( Incomplete..