Reynolds American to launch Camel Dip in June 2009..

April 20, 2009 - Reynolds American Inc. (RAI) will launch Camel Dip (moist snuff), a premium moist smokeless product, in test markets in Colorado and Florida beginning in mid-June, 2009. Camel Dip will be distributed through Reynolds' Conwood Co. subsidiary, making it the first time that the manufacturer (produced and packaged at Conwood's plant in Memphis, Tenn., as well as distributed by the Memphis-based company) has marketed a Camel product outside R.J. Reynolds Tobacco Co.(RJR). (Camel SNUS is marketed by RJR.)

Camel Dip, which is expected to sell at retail for $4.50 to $5 a tin, will compete with Conwood's Kodiak and Philip Morris USA's Copenhagen and Skoal brands (Altria is the parent of both Philip Morris USA and U.S. Smokeless Tobacco Co. the latter markets Copenhagen and Skoal - It will make its debut in two styles -- Dark Milled, a traditional, fine-cut product, and Wintergreen Wide Cut. (Camel Dip has even a lesser chance of survival at the retail price specified. U.S. Smokeless Tobacco has recently cut wholesale prices of its premium products about 20 percent -

Copenhagen and Skoal brands have a rich history and a loyal customer base. Copenhagen, the world's best-selling brand of moist smokeless tobacco, is one of the oldest-packaged consumer brands in the United States. Skoal, a wintergreen-flavored moist smokeless tobacco and UST's other flagship brand, was launched in 1934. Conwood's Grizzly, a price-value/discount brand, was launched in 1991 and has been extremely successful. Grizzly continues to represent almost half of all category growth. Grizzly's 3rd quarter 2008 share of shipments was 23.4 percent, up 2.1 percentage points from the prior-year period.

Does Camel Dip have a chance to succeed?? Philip Morris USA's (PM USA) Marlboro MST that was recently discontinued after Altria's acquisition of UST, Inc. was introduced into test market in the the Atlanta area in October 2007.

When Marlboro MST was introduced then Citigroup's Tobacco Analyst Bonnie Herzog told investors that PM USA will fully cement its place in the smokeless segment using the power of the Marlboro brand (8/21/2007). Well this did not HAPPEN.. 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. (Marlboro MST / Marlboro SNUS - Philip Morris USA (PM) Trying to Paint a Rosie Picture..)

We wonder if RAI has the best interest of their stockholders in mind. Reynolds To Roll Out Camel SNUS Nationally Early in 2009.. RJR has tried every possibility to develop an interest in this product. Surely, they've given away many more cans of Camel SNUS that have been purchased.

The Camel Circle of products diagram has to be updated with the dissolvables and now with Camel Dip. Watch with dissolvables we'll have children becoming life-time nicotine addicts at a much younger age than with cigarette smoking. How about this comparison of Camel Orbs and Tic Tacs? Can you imagine what kids will do with Camel edible film strips like Listerine breath strips??

Fitch ratings anticipates 2009 volume declines in the high single digits to low double digits. David Howard, an R.J. Reynolds spokesman has said the tobacco industry expects a 6 to 8 percent drop in nationwide sales.

Reference: Camel Dip to be test marketed Smokeless tobacco product to be available in Colorado, Florida by Richard Craver, Winston-Salem Journal, 4/20/2009; Camel Dip to Hit Lips in June
New Reynolds smokeless tobacco product to be available through Conwood in Colo., Fla.
by Greg Lindenberg, CSP Daily News, 4/21/2009.