Altria's growth depends on the Marlboro name..



April 13, 2008 - Can the new Altria - PM USA make it in the smokeless tobacco category just riding the Marlboro name?? PMI has forecast annual growth in earnings per share of 10 - 12%. Altria expects its own earning growth to be 8 - 10% annually. Altria will deal with fewer cigarettes sales by capitalizing on its Marlboro brand and selling more smokeless products. In August 2007 Citi group analyst Bonnie Herzog told investors that PM USA will fully cement its place in the smokeless segment using the power of its Marlboro brand. "We anticipate that PM USA will be able to attract the majority of smokers that will cross over into the smokeless market as well as attracting existing moist users." PM considers Marlboro more than a cigarette - a brand that stands for superior tobacco flavor. PM USA is using Marlboro's superior tobacco flavor and resources that support the Marlboro cigarette to create value in new businesses such as SNUS and Moist Smokeless Tobacco. (Altria Group, Inc., Investor Presentation, New York, March 11, 2008) But market tests find that even the name Marlboro doesn't seem to sell the Marlboro smokeless products. 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. The Word From Dallas - Test Market for Marlboro SNUS.. 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." Kesler 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. We feel in order for PM USA to be a significant player in the smokeless tobacco category they'll need to expand through acquisitions e.g., PM-UST, PM-Swedish Match). Many related news briefs - browse the library - here's one example Philip Morris USA (PM) continues to stumble in the smokeless tobacco arena.. (TobaccaWatch.org) - Incomplete..

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