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