Granddad’s Tobacco Gets A Makeover, BAT''s Is Pushing A Pouch Brand Called Lyft

Source from:  Bloomberg 08/23/2019

So-called modern oral products are starting to break into the smokeless market.

Chewing tobacco doesn’t enjoy the most refined reputation, a sticky black mess tucked into a corner of the mouth, the steady stream of spit making bystanders queasy. And yet, cigarette companies are rushing into the category to escape a growing smoking malaise.

To resonate with a young and fashion-forward audience, the humble oral nicotine has undergone a makeover, in some cases removing tobacco altogether. British American Tobacco Plc is pushing a brand called Lyft—slender white pouches, infused with eucalyptus and pine tree fibers, that release mint or berry flavor once discreetly tucked under the upper lip. The tobacco-laced sister brand Epok promises hints of tropical fruit or peppermint.

“For some of us, coming from a geography where there’s a bit less of a history of oral tobacco use, the ritual can look a bit alien,” said Vincent Duhem, BAT’s global director for the modern oral category. “There’s a widespread ritual in the U.S. and Scandinavia, but we’re starting to see that spreading in many places, like in Europe and Russia.”

The renewed interest in an established—albeit niche—product reflects the strains on an industry that’s woken up to the fact that its future may not lie in cigarettes. Volumes have declined by about a third since 2004 in Western Europe, and are expected to drop further through 2022, according to Euromonitor. That has set off a race to become a leader in next-generation alternatives. While vaping and heat-not-burn devices have become a popular and widespread means to wean people off cigarettes, the modern oral tobacco remains a fringe phenomenon, accounting for just 2% of BAT’s cigarette-alternative sales.

Marketing a product that’s not commonly used outside Scandinavia and the U.S. poses challenges, as consumers often confuse different variants of smokeless tobacco. What cigarettes, vaping and oral products all have in common is that they contain nicotine, and that health authorities consider all of them harmful, to different degrees. But like with vaping, there is no uniform regulatory approach, meaning the oral products are available in some markets but banned in others, making life harder for companies trying to sell them.

Modern oral products, wrapped in a white pouch, often contain less tobacco than traditional chewing tobacco or the Scandinavian snus variant, which is confined to Sweden and Norway but banned in most of the European Union. Snus is moist powder or ground tobacco administered the same way as the modern versions. Traditional chewing tobacco can still come in brown, loose form that can require spitting.  Enditem