C-store update: flavored tobacco, camel dissolvables, Moist snuff, Camel Dip, etc..

September 22, 2009 - Effective today Tuesday, September 22, 2009, cigarettes that contain certain characterizing flavors are considered adulterated under the Federal Food, Drug, and Cosmetic Act , as amended by the Family Smoking Prevention and Tobacco Control Act are prohibited.. Now let's do the same for the Other Tobacco Products (OTP). Skoal a very popular moist snuff has many different flavored smokeless tobacco tastes to mask the tobacco taste. Skoal is available in a variety of flavors Wintergreen, Straight, Mint, Cherry, Classic, Spearmint, Berry Blend, Vanilla Blend, Apple Blend and Peach Blend (also Citrus Blend). Flavored pipe tobacco cigar brands like Middleton's Black & Mild Cigars, the top selling cigar package in the U.S. is very popular with young Americans. Several different flavors are available including Mild, Apple, Mild FT Filter Tip, Mild Cherry-Vanilla, Cream, Vanilla and Wine. The next C-store update will be devoted to OTPs that are flavored.

Camel dissolvables are now available at all 3-test marketing sites, i.e., Columbus, Ohio, Portland, Oregon Indianapolis, Indiana.

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Remember that Reynolds reportedly wants to determine which of the three products is most popular (Camel orbs, Camel sticks or Camel strips) , and among whom. Reynolds said the dissolvable products were developed in response to negative customer feedback in 2006 regarding other smokeless products: even the spitless Camel Snus ("snoose") must be removed from the mouth after consumption.

The company has said it will not advertise the dissolvables as less harmful than smoking. "The consumer should be aware...about the potential risks of each tobacco product. There are none that are safe and there are none that are without risks," said David Howard, a Reynolds spokesperson. (R.J. Reynolds Tests Dissolvable Camel-Branded Tobacco Products, News Summary, 10/9/2008)

When is a flavored tobacco product considered flavored.. As pointed out by Matthew L. Myers, President, Campaign for Tobacco-Free Kids some tobacco companies may already be trying to circumvent the ban on flavored cigarettes. U.S. - Importer tries to get around clove cigarettes ban..

As stated above the tobacco regulations specify cigarettes that contain certain characterizing flavors are considered adulterated and are prohibited. "Characterizing flavor" can be defined as a distinguishable taste or aroma that is imparted to tobacco or tobacco smoke either prior to or during consumption.

Reynolds realizing OTPs may be next to have all flavored products declared illegal have altered the description for their dissolvable tobacco products on their website Under "How dissolvable tobacco is made?" This tobacco is combined with binders and non-characterizing flavoring, that complement the tobacco's natural taste.

Moist snuff - Altria Group Inc. plans to unveil a new version of Copenhagen this fall, one of several moves aimed at increasing the company's smokeless-tobacco sales amid tough competition from lower-priced brands like Conwood, the maker of value priced/discount brand - Grizzly.

The moist snuff category is divided into high-priced, premium brands (like Skoal, Copenhagen, Kodiak) and inexpensive brands in the price-value segment (like Grizzly). The real growth in this category is coming from the discount brands. For example, overall moist snuff volumes grew about 7% in 2007.

Grizzly (the nations number one moist snuff brand) in the second quarter of 2009 expanded its market share to 25.5 percent, up 2.2 percentage points. Conwood's overall market share was up 1.9 percent to 29.4 percent (Reynolds American Inc. Q2 2009 Earnings..) Grizzly's strength, note this product was launched only in 2001..

At the time Altria bought UST - UST commanded almost 58% of the U.S. smokeless tobacco market, as of the 26 weeks ended June 14,2009 according to the company's latest earnings report. (Within Altria UST is operates under the name U.S. Smokeless Tobacco Co..)

Altria has slashed prices of Skoal and Copenhagen this year in an effort to compete better with discount moist-snuff brands such as Grizzly. Reynolds followed lowering the price of Kodiak by 72 cents a can April 1,2009 following the move by Altria to decrease distributors’ list price of Skoal and Copenhagen by 62 cents a can.

In the fall Altria will launch a long-cut wintergreen version of Copenhagen, a premium brand that will compete with Reynolds-American Inc.'s (RAI) fast-growing Grizzly long-cut wintergreen variety. Skoal has a similar product but Copenhagen does not. The new product could drive Copenhagen's share of the segment from 23% to 32%, according to a company spokesperson.

In the wake of the price cuts, the average U.S. price for premium moist snuff such as Skoal is about $4.15, compared with about $2.75 for discount brands such as Grizzly and Swedish Match AB's Timber Wolf brand, according to Morgan Stanley. That price gap of about 50% is down from about 100% in the second quarter of 2008. (Altria Growing Smokeless..)

Grizzly's market share is a bit higher than Skoal, though both are around 25%, according to analysts. Copenhagen's is about 24%. A challenge for Altria is that the total discount category now accounts for more than half of industry volume, compared with less than 10% in the mid-1990s. In February 2000 Skoal held a 39.5% share of the $2 billion smokeless tobacco market, ahead of sister UST brand Copenhagen with a 33.7% share, per A.C. Nielsen. Ten years ago, UST, Inc. owned more than 80% of the smokeless tobacco market.

Another factor is that with Skoal and Copenhagen - you have premium brands that have an actual expiration date (guaranteed freshness) where with Grizzly you have lower quality tobacco with a coded expiration date that is impossible for the customer to decipher.

Camel Dip
- In a test in Florida and Colorado, Reynolds is offering its new Camel Dip snuff to distributors for the same price its bigger competitor charges for Skoal and Copenhagen, said Bryan Stockdale, chief executive officer of Reynolds’ Conwood unit. A national expansion of Camel Dip may help the company reverse declining market share with Kodiak in higher-priced snuff, he said. Reynolds is testing its Camel version of moist snuff as part of an effort to boost sales of higher-priced products. While the Kodiak brand generates lower sales than less-expensive Grizzly, it’s about twice as profitable, Stockdale said. “If you can stabilize Kodiak and establish Camel, then you have growing premium and growing Grizzly,” said Stockdale, a 30-year Reynolds veteran and former senior vice president of marketing operations for the R.J. Reynolds Tobacco Co. cigarette division. “Camel showing the ability to grow in the moist segment is a big deal.”
(Reynolds May Introduce Camel Snuff to Go After Altria By Chris Burritt, SMPOSDT.net, 7/30/2009)

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More on Conwood's Grizzly.. To counter Altria's attempt to take market share from Grizzly. Conwood is having a sweepstakes - win over $100,000 in prizes.. You have to go to mygrizzly.com to register - then forever they have you on their mailing list.

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Conwood has just started a promotional where the consumer buys a can of Grizzly Straight and gets a deck of playing cards and a Grizzly poker chip. (So far we have only seen the promotion when a can of Grizzly Straight is purchased not a can of its best seller Grizzly Wintergreen.)

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Smoker signup signs in c-stores..
Most of you have probably seen these signs. This is another Philip Morris ploy to expand their list of smokers. A check is sent to the store owner after a certain number of people call.

Previous c-store update...

Lot more to relate but just don't have the time..

Here are a few additional images:
Conwood Tobacco Products..
R.J. Reynolds Smokeless Products..
R.J. Reynolds Tobacco Products..