US: Reynolds Expands Camel Markets

Source from:  Winston-Salem (NC) Journal 04/02/2015

R.J. Reynolds Tobacco Co. is expanding the reach of its top-selling traditional cigarette brand, launching premium-product Camel White in 21 West and Midwest states.

Another Reynolds American Inc. subsidiary, American Snuff Co., debuted a new style Tuesday - dark wintergreen - for its Grizzly moist snuff brand, the No. 1 selling brand in the country.

Camel White features "mellow" and menthol flavoring in 85-millimeter box sizes. "In testing, Camel White had very high appeal with adult smokers, both of Camel and of competitive brands."

The manufacturer pitches the style as offering adult smokers "a premium, smooth smoking experience." Reynolds does not set a per-pack price for retailers and wholesalers.

The closest the style is being sold to North Carolina is in Indiana and Ohio.

The other states are Alaska, Arizona, California, Colorado, Idaho, Illinois, Iowa, Kansas, Minnesota, Montana, Nebraska, North Dakota, New Mexico, Nevada, Oregon, South Dakota, Utah, Washington and Wyoming.

Reynolds spokesman Richard Smith said he could not say when Camel White would be sold in North Carolina.

"There are a number of things we consider in different markets when making products available, including adult tobacco consumer audience - smokers, moist snuff, snus - and overall awareness of the Camel brand, among other factors," Smith said. "The availability would be around the same amount as other Camel styles in those markets where Camel White is available, depending, of course, on adult tobacco consumer reception."

The overall Camel cigarette brand added to its recent market share gains during the fourth quarter of 2014, rising 0.3 percentage points to 10.3 percent. It remains third in the U.S. market.

In recent years, Reynolds has been focused primarily on alternative product innovation, such as electronic cigarette Vuse.

Camel Snus, heat-not-burn traditional cigarette Revo and nicotine replacement therapy gum Zonnic.

However, it has expanded its Camel portfolio with Camel Crush and Camel menthol.

"While category trends may move from one delivery form to another, from cigarettes to smokeless, it doesn't mean there isn't still a sizeable market segment - and therefore opportunity - in the traditional cigarette form," said Roger Beahm, executive director of the Center for Retail Innovation for Wake Forest School of Business.

"Building market share in a declining market segment or category can still be a smart way to grow volume and profit, particularly in the short run. It's often possible because there's less competitive activity going on in that segment than in the past - so your message gets through to prospects more clearly, with less competitive interference.

"If Camel's market share grows at a rate faster than the category/segment is declining, they could still net out ahead," Beahm said. "By charging a premium for innovation, thus increasing unit profit on every pack or carton sold."

Grizzly's dark winter-green addition to its portfolio "uses leaves that are dark-fired to bring the tobacco's naturally bold flavor to the forefront." The product is made from tobacco grown on farms in Kentucky and Tennessee.

Market share for Grizzly was unchanged in the fourth quarter at an industry-leading 31.3 percent. Enditem