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RJR adds test cities
Smokeless snus 'gaining traction'
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Published: April 12, 2008
R.J. Reynolds Tobacco Co. is taking its Camel Snus marketing tour to the country's biggest consumer markets in May.
The company said yesterday that it is expanding the test markets for the smokeless product from eight to 17 metropolitan areas.
The new markets are Atlanta, Baltimore/Washington, Chicago, Los Angeles, Miami, Minneapolis/St. Paul, New York City, Oakland/San Francisco and Seattle. Camel Snus is the first snus product by a U.S. tobacco manufacturer introduced into those markets.
Camel Snus comes in a small pouch that is placed between the lip and gum. The tobacco is pasteurized -- not fermented -- and it contains less moisture and salt than moist snuff. It also does not require the consumer to spit, Reynolds said.
"We're continuing to learn about the potential of Camel Snus as a viable product among adult tobacco users," said David Howard, a company spokesman. "We know snus is gaining traction."
Reynolds has been the most aggressive U.S. tobacco manufacturer with snus, having begun its first trial two years ago. It has not set a timetable for distributing and marketing Camel Snus nationally.
The other test markets are in Austin, Texas; Columbus, Ohio; Dallas/Fort Worth, Texas; Indianapolis; Kansas City, Mo.; Orlando, Fla.; Portland, Ore.; and Raleigh. The product is available at Sheetz convenience stores in Winston-Salem and at convenience stores in Greensboro and High Point.
Although Reynolds does not dictate the price of Camel Snus at retail, the price is comparable to a premium pack of cigarettes, which typically sell for $4 to $4.50, Howard said.
The competition for snus products has gotten tighter in recent months.
Liggett Group LLC said on Feb. 26 that it would begin testing in May its Grand Prix snus in seven of Reynolds' current markets. Philip Morris USA is selling Marlboro Snus in Dallas and Indianapolis.
The makers are putting more emphasis on smokeless products, such as snuff and snus, to gain market share and sales as the smoking rate among adults continues to decline.
Smokeless products are drawing support from some anti-smoking groups as a less hazardous way to consume tobacco.
Those groups, as well as Reynolds, want any proposed Federal Drug Administration regulation of tobacco products to allow for the marketing of smokeless products as reduced risk compared with cigarettes.
"Reynolds' expansion of its test market for snus will provide millions of smokers with less-hazardous alternatives to cigarettes, which is welcoming news," said Bill Godshall, the executive director of SmokeFree Pennsylvania. "It makes sense for Reynolds to gradually expand its test market for snus, as it's a new and entirely different product than cigarettes."
But other anti-smoking activists oppose marketing smokeless tobacco under cigarettes' brand names.
"Every new city RJR picked has a clean-air law," said Matthew Myers, the president of the Campaign for Tobacco-Free Kids. "This is about RJR doing everything they can to keep people from quitting."
Godshall said that persuading smokers to try a new smokeless-tobacco product isn't easy.
"Although smokeless tobacco is just as addictive as cigarettes, and should not be used by those who are not addicted to nicotine, cigarettes are about 100 times deadlier than smokeless-tobacco products," he said.
Stephen Pope, the chief global-market strategist for Cantor Fitzgerald Europe, said that Reynolds' cautious approach to Camel Snus has created a greater opportunity for the product.
"It will be noted by Reynolds that when the Norwegian government placed a strict indoor smoking ban in public places in June 2004, the sale of snus really accelerated," Pope said.
■ Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
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