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Examining market trends in the United States smokeless tobacco use: 2005–2011
  1. Cristine D Delnevo1,
  2. Olivia A Wackowski1,
  3. Daniel P Giovenco1,
  4. Michelle T Bover Manderski1,
  5. Mary Hrywna1,
  6. Pamela M Ling2
  1. 1Center for Tobacco Surveillance & Evaluation Research, University of Medicine & Dentistry of NJ—School of Public Health, New Brunswick, New Jersey, USA
  2. 2Center for Tobacco Control Research and Education, University of California, San Francisco, California, USA
  1. Correspondence to Dr Cristine D Delnevo, Center for Tobacco Surveillance & Evaluation Research, University of Medicine & Dentistry of NJ—School of Public Health, 335 George Street, Suite 2100, New Brunswick, NJ 08903, USA; delnevo{at}umdnj.edu

Abstract

Background While cigarette consumption in the USA continues to decline, promotion for and consumption of smokeless tobacco (SLT) is growing. However, little research has explored what product features are driving SLT growth, despite awareness that product-level factors may be important in SLT use. This study analyses national sales data to better understand the impact of product features on SLT sales.

Methods Data on sales of SLT in US convenience stores from 2005 to 2011 were obtained from Nielsen Research Company. Each listed product was coded for attributes such as type, brand, flavouring and form to calculate their respective total sales, market share and contribution to overall SLT growth.

Results Sales of moist snuff products (including snus) increased by 65.6% between 2005 and 2011. Sales of pouched and flavoured forms of moist snuff increased by 333.8% and 72.1%, respectively, and contributed to 28% and 59.4% of the total growth in the moist snuff category, respectively. Value/discount brands accounted for 42% of moist snuff sales in 2011 among the top 10 selling brands, largely driven by Grizzly. After 2 years on the national market, Camel Snus was also one of the top 10 selling moist snuff brands.

Conclusions Sales of moist snuff, both overall and for particular styles, are increasing. Growing pouch use may be attributed to new SLT users, which may include cigarette smokers using them as starter SLT products. Increased sales of flavoured and discounted snuff raise concerns about use and appeal to youth. Continued surveillance of SLT sales trends is warranted.

  • Advertising and Promotion
  • Non-cigarette tobacco products
  • Surveillance and monitoring

Statistics from Altmetric.com

Introduction

While cigarette consumption in the USA continues to decline, promotion for and consumption of smokeless tobacco (SLT) has been growing.1 ,2 This growth trend has not gone unnoticed by major cigarette companies looking to diversify in the face of declining cigarette sales and revenue; between 2006 and 2010 both Reynolds American and Altria purchased the major SLT tobacco companies in the US (Conwood and United States Smokeless Tobacco Company (USSTC), respectively) and launched SLT products under cigarette brand names (eg, Camel Snus and Marlboro Snus).

Several factors have been noted as possibly contributing to the growth of SLT including increased expenditures on promotion,2 and growing consumption of SLT among smokers (current or former) in the face of increasing cigarette prices, smoking bans and targeted marketing.3 Indeed, advertising for new SLT products Camel and Marlboro Snus have consistently included messages aimed explicitly at smokers and have positioned the products as modern and acceptable tobacco alternatives to use in places where smoking is banned or otherwise inconvenient.4 ,5

However, relative to cigarettes, little research has been done to understand what product features are driving the growth in SLT, although previous studies suggest that different product level factors may be important. For example, the research literature has long suggested that pouched styles of moist snuff serve as logical starter products for new users, including young people and smokers, given their relative ease of use and ‘neatness’ compared with loose forms of snuff.6 ,7 Recent USSTC investor materials indicate that the company views pouches as a growth opportunity as ‘adult smokers are looking for an alternative’.8 Furthermore, some research has suggested that nicotine levels may vary by SLT form (ie, pouches vs long cut or fine cut styles) and brand.6 ,9 Flavouring in tobacco has also been noted to attract youth and new users.10 ,11 Finally, the differing price points between SLT brands may also play an important role in SLT consumption. While the moist snuff category has traditionally been dominated by two major premium brands, Skoal and Copenhagen, the emergence of four new and lower priced brands in the mid-1990s created a price differential between premium and value brands which appears to have accelerated the growth of moist snuff.1

This study aims to contribute to the literature by analysing 7 years of national SLT convenience store sales data to develop a better understanding of how different product features impact SLT consumption. Specifically, we examine the respective market share of different types of SLT styles, brands, price categories and other attributes (eg, flavouring) to determine which factors are currently driving moist snuff growth.

Methods

Data source

Data on SLT sales from the years 2005–2011 were obtained from Nielsen, an industry research company which gathers data on consumer packaged goods from convenience, drug, food and mass merchandise stores. Our analysis is based on national estimates from convenience store data given that Nielsen indicated that 93% of SLT sales are in convenience stores, whereas 7% are in food, drug or mass merchandise stores (personal communication, David Zelent, Nielsen 2011).

Convenience store data are collected through Nielsen's Convenience Track system, which tracks sales data from a sample of convenience stores through a combination of instore retail scanner equipment (ie, barcode readers) as well as audits of sales in stores without scanner equipment. Nielsen's convenience store sample is representative of all convenience store types and includes chain stores, non-chain and independent convenience stores, as well as convenience stores found in gas stations. Using a proprietary mechanism, Nielsen applies sample weights to scanned retailer data before reporting.

Data coding and analysis

Nielsen reports sales data information (ie, sales units and dollars) for each SLT product with a Universal Product Code (UPC) number. For the years of data (2005–2011) examined, there were over 1000 unique SLT UPCs listed. Each UPC listing has a description (eg, GRIZZLY SNFMS LG WN CN 1.2OZ) that highlights specific attributes. To calculate total market share estimates for product styles and attributes of interest such as brand, flavouring and form (eg, long cut, fine cut, pouches), we coded each UPC for the presence or absence of these attributes. Detailed product coding and analysis focused primarily on moist snuff products. When attributes of the product were not clear from the description provided (a minority of cases), information about the products was sought online.

Coded data from all years were merged into one master database. Results consist of descriptive trend reporting, presenting the total number of unit sales and respective market share of various product styles and attributes each year. During 2005–2011, percentage increase and attributable growth figures for moist snuff products were also calculated. Attributable growth was defined as the proportion of total moist snuff growth that could be attributed to a particular product type/style/attribute: (No. of 2011 product units–No. of 2005 product units)/(2011 total snuff units–2005 total snuff units).

Results

Types of SLT

Table 1 presents the number of units sold and the respective market share for the SLT category overall and for each major type of SLT between 2005 and 2011. Overall, unit sales of SLT increased by 56.8% between 2005 and 2011, reaching over 1 billion units sold in 2010. With respect to various types of SLT, traditional moist snuff represented at least 90% of overall SLT market share each year, and grew by 59.3% between 2005 and 2011. Sales of snus experienced notable growth, with unit sales doubling between 2009 and 2010 alone.i When snus, a Swedish style of moist snuff, is included in the ‘moist snuff’ category, sales of moist snuff increased 65.6% between 2005 and 2011. In contrast, sales and market share for chew tobacco fell each year and by 2011 sales of chew represented less than 5% of the SLT market. Last, while dissolvable tobacco products also experienced overall growth during the time period, their SLT market share was negligible in 2011.

Table 1

Characteristics of smokeless tobacco sold in convenience stores in the USA, 2005–2011

Moist snuff

Table 1 also describes unit sales and market share by and for select product attributes among moist snuff products only (inclusive of snus). Long cut styles represented at least 60% of the overall moist snuff market each year and grew 72.7% between 2005 and 2011. Market share of fine cut products decreased slightly each year while portion pouch products increased annually. Sales of portion pouch products increased 333.8% between 2005 and 2011 and represented 14.5% of the moist snuff market share in 2011. The growth in portion pouch products contributed to approximately 28% of the total growth in the moist snuff category overall.

Moist snuff flavours

Sales of flavoured moist snuff products increased 72.1% between 2005 and 2011 and contributed to approximately 60% of the growth in the moist snuff category overall. In terms of market share, flavoured products exhibited a stable trend over the 6-year time period, making up at least 54% of the moist snuff market share each year (see table 1). Among flavoured products, wintergreen was the most popular flavour (accounting for roughly two-thirds of all flavoured snuff sold between 2005 and 2011), followed by spearmint/mint, fruit flavours (eg, apple, berry, peach) and other characterising flavours (eg, vanilla, cinnamon). Sales of fruit flavoured products across the 7 years were largely attributed to Skoal, which accounted for 86.4% of all fruit flavoured products sold (data not in table). The market share of fruit flavoured products declined notably between 2005 (7.3%) and 2011 (4.6%). Also, portion pouch products were the style most frequently sold in flavours whereas fine cut were the least likely to be flavoured. Between 2005 and 2011, 73% of portion pouch products, 65.8% of long cut styles and 23.9% of fine cut styles were flavoured (data not in table).

Moist snuff brands and price tiers

While historically two major premium brands (ie, Skoal and Copenhagen) dominated the moist snuff market, in the late 1990s/early 2000s the introduction of several ‘value brands’ (eg, Timber Wolf, Red Seal, Grizzly, Longhorn) challenged this trend.ii Table 1 illustrates the rapid growth in the value brand Grizzly (made by American Snuff Company) which went from the third top selling brand in 2005 to the number one selling brand in 2009, moving ahead of the premium brand market leaders, Copenhagen and Skoal. Overall sales of this one brand grew 196.5% between 2005 and 2011 and contributed to approximately 44% of the growth in the moist snuff category overall. Another value brand, Longhorn, increased sales by 290.8% over the 7-year period, making it the fourth top selling brand in 2011, albeit with a considerably smaller market share (5.1%). Overall, value brands (also including Red Seal, Timber Wolf and Husky) accounted for approximately 42% of moist snuff sales in 2011 (data not in table). In 2011, the average unit price was $3.00 (range: $1.88–$3.66) for value brands and $4.26 (range: $3.31–$4.70) for premium brands.

The data indicate that premium brand Copenhagen also performed well, increasing sales by 67.5% over the 7-year time period, and positioning at a very close second to Grizzly in 2011. Given its premium price, Copenhagen was the number one brand in 2011 with respect to dollar share. It should also be noted that upon its first year on the market nationally, sales of premium brand Camel Snus made it one of the top 10 selling brands of moist snuff in 2009.

When considering market share by moist snuff manufacturer, Grizzly helped increase that of American Snuff Company (formerly called Conwood Tobacco Company) and chip away at that of USSTC. Yet despite a 12.5 percentage point decrease in market share between 2005 and 2011, USSTC continued to maintain over half the market share by 2011, led by four top 10 selling brands (Copenhagen, Skoal, Red Seal and Husky) (see table 1). Although the launch and sales of snuff products manufactured by Philip Morris (including Marlboro Snus, Marlboro Moist and Taboka) have lagged behind those of RJ Reynolds (Camel Snus and Camel Dip), it should be noted that Philip Morris's parent company Altria controlled over half of the moist snuff market upon completing its purchase of USSTC in early 2009. Following its purchase of American Snuff Company in mid-2006, moist snuff sales under Reynolds American increased by 54% between 2007 and 2011.

Three brands, Grizzly, Copenhagen and Skoal, made up three-quarters of the total 2011 moist snuff market. Table 2 presents additional details about these brands in 2011. Premium brand Skoal carried 38 different product line extensions with flavoured styles accounting for approximately 81.3% of its sales. Roughly one out of five flavoured Skoal products were fruit flavoured. While long cut was the most popular form of Skoal, almost a quarter of Skoal products sold were sold as portion pouch. In contrast, sales of premium brand Copenhagen products were largely unflavoured, with the brand only introducing a Wintergreen style in late 2009. About 38.9% of Copenhagen sales were for fine cut styles, a notably smaller proportion of its market share than that observed in 2005 (62.5%, data not in table). Finally, although the majority of product sales for value brand Grizzly were flavoured (68.5%), flavours were limited to wintergreen or mint. While long cut styles dominated Grizzly market share (73.1%), portion pouch sales grew quickly to 11.6% of the brand's market by 2011 after being introduced in late 2008. In addition, figure 1 presents the change in average unit price for these three brands. It should be noted that although the price for Grizzly remained lower than that of Copenhagen and Skoal each year, the price gap narrowed over time following both increases in price of Grizzly products and decreases in Skoal and Copenhagen prices.

Table 2

Characteristics of Skoal, Copenhagen, Grizzly and Snus sold in convenience stores in the USA, 2011

Figure 1

Average unit price for a can of Copenhagen, Grizzly and Skoal: 2005–2011.

Snus

When moist snuff data were limited specifically to snus products,iii 2011 data indicated that American brands Camel Snus, Marlboro Snus and Skoal Snus accounted for 99.7% of all snus sales in convenience stores (see table 2). Sales of Swedish Match's General Snus brand accounted for only 0. 2% of snus sales. Virtually all snus was sold in pouched form (99.9%) and 79.6% was flavoured. The average unit sales price of snus in 2011 was $3.11 (range: $2.50–$3.91).

Herbal/imitation SLT

Nielsen also provided sales figures for brands of herbal or imitation types of SLT including brands such as Golden Eagle, Oregon Mint Snuff and Smokey Mountain. Sales for such products grew 50.6% between 2005 and 2011, and totalled approximately 956 609 units in 2011. In 2011, the brand Smokey Mountain accounted for 78.4% of sales and like moist snuff, herbal/imitation snuff is also flavoured (73% in 2011) as well as sold with portion pouch (10.4% in 2011).

Discussion

Against a backdrop of declining cigarette consumption in the USA, SLT sales increased dramatically and reportedly played an important role in maintaining profits for major US tobacco companies, that is, Altria and Reynolds American Inc.12 ,13 Our 7-year retrospective analysis of Nielsen convenience store market scanner data quantifies growth in SLT sales, specifically moist snuff and snus, over a time period in which cigarette consumption declined by 23%.14 Moreover, our analysis highlights a changing market (eg, decline in chew tobacco) and the characteristics driving the growth in SLT sales, the most influential of which are product flavouring and portion pouch packaging. Findings also indicate that the introduction of value brands, like Grizzly, played an important role in changing the competitive landscape while the more recent introduction of cigarette brand name ‘American’ snus products appear to be gaining traction. These results are discussed in greater detail below.

As documented elsewhere,1 ,2 chewing tobacco sales continue to decline and as of 2011, make up a very small percentage of current SLT market share. We are not aware of any research examining specific reasons for this decline. However, it is worth noting that marketing expenditures for chewing tobacco (including loose leaf and plug/twist types) declined by 27.5% between 1986 and 2008 while expenditures for moist snuff dramatically increased by about 563% over the same time period.2 Furthermore, great differences exist in the relative dollar amount spent on marketing. In 2008, marketing expenditures for new product type snus (at $58.8 million) were already over twice the amount spent for chewing tobacco ($24 million) while expenditures for moist snuff products were almost 12 times greater ($287.3 million).2 Also, chewing tobacco, which comes in larger chunks of tobacco inherently limits users’ ability to use it ‘discreetly’, whereas promotion of moist snuff, snus and dissolvable tobacco includes innovations such as pouched portions and ‘spit-free’ formulations designed to improve the ease, convenience and acceptability of their use.

While sales of all forms of moist SLT products (ie, long cut, fine cut and portion pouches) increased over the observed period, the rapid growth in portion pouch products is particularly significant given their ability to facilitate adoption among new users who may have difficulty learning to use loose SLT products. Indeed, pouch products were introduced in the 1970s with the intention of using them to expand the SLT user base, particularly to smokers and to novice tobacco users, and were positioned for decades as a situational alternative for smokers in smoke-free environments.6 While this message has been a consistent feature of SLT pouch products’ marketing, it may be increasingly relevant over time as smoke-free policies proliferate. Current advertising for new Marlboro and Camel Snus pouch products has been accompanied by similar messages. For example, Marlboro Snus advertisements state, ‘When smoking isn't an option, reach for Marlboro Snus’.15 These types of messages are likely to promote dual or alternating use of cigarettes and SLT.

This study also highlights the use of flavours as a major factor in the growth of moist snuff overall. This is important given the potential appeal of such products to young people. Indeed previous reviews of tobacco industry documents have shown that tobacco companies viewed flavouring as a way to make SLT products more palatable and attractive to new users, who might later ‘graduate’ to stronger, more tobacco tasting styles.6 Fruit flavoured styles of SLT, flavours potentially most attractive to young consumers, are currently largely produced by just one brand—Skoal. In fact, recent advertising materials from top selling brand Grizzly have used this point as a way to differentiate itself from the competition with mocking slogans such as ‘fruit flavours are for lipgloss’ and ‘fruit flavoured dip goes really well with a man purse’16 The flavoured category is actually dominated by sales of wintergreen and mint styles, flavourings that might be considered akin to menthol use in cigarettes.9 ,17 With their ability to mask the harshness of tobacco taste, menthol cigarettes have been criticised as being starter products for young people.18 However, while flavoured cigarettes were banned by the Family Smoking Prevention and Tobacco Control Act in 2009, no such recent federal restrictions on flavoured SLT products have been proposed. Yet, efforts to ban flavoured SLT on the local level have begun. A local New York City ordinance passed in 2009 banned the sale of flavoured SLT (except wintergreen and mint styles) and was upheld in a legal challenge by Altria in 2011.19 In 2012, a similar ban of flavoured tobacco was passed in the city of Providence, Rhode Island.20 It is noteworthy that there is a movement away from fruit flavours by the industry since 2009.

This study also described the role of brand and price tier (premium vs value) in the context of increased moist snuff consumption, a factor that has been previously overlooked. While the moist snuff category has traditionally been dominated by two major premium brands, Skoal and Copenhagen, premium brands have more recently lost market share to discount brands, led by the growth of Grizzly. By 2009, Grizzly became the number one selling SLT brand in the USA and over 44% of the total growth in moist snuff between 2005 and 2011 was attributable to this single value brand. Grizzly likely appeals to a different consumer segment than Skoal or Copenhagen. Industry data suggest that Grizzly users are more likely to be educated male subjects under the age of 30 compared with other moist snuff brands.21 The success of a value brand among image conscious youth may seem surprising but it appears that Grizzly may have succeeded in portraying the image of a premium quality product offered at a value price in a way that is attractive to this segment of the population. Indeed, under the Reynolds American Inc product portfolio, recent advertising for Grizzly which features witty and sarcastic remarks as part of its ‘Tellin’ it Like it Is’ campaign is reminiscent of the irreverent and rebellious themes used to promote the Camel cigarette brand of Reynolds American Inc.22 This study also found that with the increasing success and demand for Grizzly over the last several years, Grizzly makers began to increase their prices while USSTC lowered the price of its Copenhagen and Skoal brands, likely in response to Grizzly sales. In 2009, Skoal advertising materials were used to inform customers that the company would begin offering the ‘same great dip’ at a ‘new lower price’.23 ,24

However, the latest smokeless products are blurring the traditional line between value and premium brands. In 2011, Grizzly launched ‘Premium Grizzly’ in a special can. In 2011, Skoal introduced ‘Skoal Xtra’, a value priced product, selling on average at $3.15, more than $1.50 below typical Skoal products. A recent Reynolds Investor report highlighted this trend, referring to Traditional Brand Segmentation (ie, brand dictates premium/value status) versus Retail Price Segmentation (ie, price dictates status rather than brand).22

Data from this study also suggest American audiences may be receptive to snus, a type of Swedish style moist snuff recently introduced and marketed under cigarette brand names. The ranking of Camel Snus as one of the top 10 selling SLT brands after only a few years on the market might be attributable to RJ Reynolds’ aggressive marketing efforts, which have included advertising in national magazines, newspapers, alternative weekly publications and at the point of sale, direct mailings with samples or product coupons, sponsored parties and events and a dynamic website.4 ,5 ,25 ,26 Moreover, as mentioned above, much of this advertising has focused on positioning the product as an alternative to smoking while also making clear that it is a spit-free form of SLT unlike traditional SLT types. Also of note and potential appeal to smokers may be the generally lower cost of snus products relative to cigarettes. The difference between prices may be especially attractive in states or cities with particularly high cigarette excise taxes. Sales of snus are likely to continue to grow with the introduction of new brands and greater product availability in mainstream stores. Indeed, USSTC launched its own brand (Skoal Snus) nationally in 201127 while Swedish Match, the dominant manufacturer of snus in Scandinavia, recently announced it would be making a greater push in the US to compete with Camel and Marlboro Snus by introducing new product styles and expanding sales of its General Snus brand from tobacco shops into major convenience store chains.28

Although this study provides timely and detailed information about recent SLT sales, two limitations should be noted. Data are limited to sales in just one outlet type (convenience stores), although as mentioned earlier Nielsen indicated that about 93% of tracked SLT sales were based in convenience stores. In addition, the exact sampling and weighting methods used by Nielsen are proprietary. Furthermore, our experience with Nielsen indicates that sampling methods are adjusted over time to improve their data estimates. It has been noted that incomplete coverage of certain retail channels (eg, mom and pop independent convenience stores) may limit Nielsen scanner data's utility.29 However, it is also worth noting that at least two tobacco companies (Reynolds American, Swedish Match) rely on Nielsen data to monitor their sales. Moreover, our market share estimates by moist snuff brand closely approximate those in the frequently cited Maxwell Reports.1

Summary and conclusions

Overall, this study reveals trends in SLT consumption that carry public health implications. In addition to illustrating the increase in consumption of moist snuff in general, this study points to certain trends that suggest changes in SLT users and have implications for particular populations. While growth in snuff pouch or packet use may be due to changing preferences among existing SLT users, it may also suggest an increase in the number of smokers turning to SLT instead of or in addition to cigarette use. The increase in sales of flavoured snuff and of value brands also raise concerns about increased use among and potential appeal to youth, who are both more price sensitive and more likely to be interested in tobacco-masking flavours than adults. Given the introduction and growth of new SLT products, the changing tobacco landscape, and its potential impact on public health, continued surveillance of trends in SLT sales is warranted.

What this study adds

  • Smokeless tobacco (SLT) consumption, and in particular moist snuff, has been increasing in the USA.

  • Trade publications suggest that product feature, such as portion pouches and flavours, have been driving growth, yet little research has been done to empirically assess this.

  • This study analysed 7 years of market scanner data (2005–2011) to quantify the impact of such product features on SLT sales. Our findings highlight that the consistent growth in SLT is driven by value brands, product flavouring and portion pouch packaging as well as the growing market for ‘American’ snus products.

References

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Footnotes

  • Contributors CD conceptualised the study, oversaw all analyses, took primary responsibility for writing and is responsible for the overall content. OW helped in study conceptualisation, participated in analysis, data interpretation and writing. DG and MB participated in data coding and analysis, and writing. MH and PL participated in data interpretation and writing.

  • Funding This work was funded in part by Robert Wood Johnson Foundation's Substance Abuse Policy Research Program and the National Cancer Institute (R01CA141661-S1 and R21CA159160).

  • Competing interests None.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • i Camel Snus was launched nationally in 2009. Marlboro Snus was launched nationally in 2010.

  • ii We label brands as premium or value based on terms that the smokeless tobacco manufacturer as well as trade publications use to conventionally describe these products.

  • iii We defined as ‘snus’ any product with the term snus in its brand name/product description or otherwise categorised as ‘snus’ by tobacco-control related sources such as TobaccoProducts.org.

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