Camel Snus Going Nationwide

From Winston-Salen Journal

By Richard Craver Journal Reporter
Published: October 18, 2008

R.J. Reynolds Tobacco Co. is going national with Camel Snus, convinced that the smokeless product is gaining traction with adult smokers.

Camel Snus will be sold primarily in convenience stores and tobacco outlets beginning in late January or early February, David Howard, a company spokesman, said yesterday.

The product 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 have been very deliberate in the test marketing of Camel Snus," Howard said. "All indications point to Camel Snus being a viable product for adult tobacco consumers."
The national distribution of Camel Snus is the latest step in Reynolds' bid to make its tobacco products more accessible within a society that's clamping down on smoking.

The company introduced three dissolvable smokeless products on Oct. 7 -- a pellet (Camel Orbs), a twisted stick the size of a toothpick (Camel Sticks) and a film strip for the tongue (Camel Strips).

Reynolds has been the most aggressive U.S. tobacco manufacturer with snus, having begun its first trial 2½ years ago. It expanded from eight to 17 metropolitan areas in May. The product is available at Sheetz convenience stores in Winston-Salem and at convenience stores in Greensboro and High Point.

Howard said that Reynolds has primarily focused on smokers with its Camel Snus marketing "in hopes of adding the product to their repertoire of tobacco choices."

"There has been a learning curve for us in how to market Camel Snus, and a learning curve for adult tobacco consumers on how to use it."

Although Reynolds does not dictate the price of Camel Snus at retail, the price is comparable to a premium pack of cigarettes, which typically sells for $4 to $4.50, Howard said.

The major U.S. tobacco manufacturers 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 when compared with cigarettes.

"Snus makes up about 1 percent of smokeless-tobacco sales, so clearly it has a ways to go before having an impact," said Bill Godshall, the executive director of SmokeFree Pennsylvania. "It will be interesting to see how Camel Snus does nationally because most smokeless tobacco users live in the South, Appalachia and cowboy country in the Rockies."

Other anti-smoking activists oppose marketing smokeless tobacco under cigarettes' brand names.

"The introduction of new tobacco products like Camel Snus underscores the need for Congress to grant the FDA authority over all tobacco products," said Joel Spivak, a spokesman for the Campaign for Tobacco-Free Kids. "Smokers concerned about their health should not be fooled by these new products."

Reynolds must push hard with its marketing plans for Camel Snus for it to gain meaningful market share, said Stephen Pope, the chief global-market strategist with Cantor Fitzgerald Europe.

Howard said that Reynolds plans to run major print advertising for Camel Snus in 2009. It will refrain from any print advertising for its cigarette brands for a second consecutive year.
"The Camel brand has to be exercised to the hilt, exploit every edge one has," Pope said.
"Traction for any specific brand will be hard to see in a meaningful way before at least three years."

What will they think up next?

Dissolvable tobacco offered as smoking bans proliferate; critics say it looks like candy
By Richard Craver

Winston Salem-Journal
October 8, 2008


R.J. Reynolds Tobacco Co. is introducing three dissolvable smokeless products in its latest bid to make its tobacco more accessible within a society that's clamping down on smoking.
The dissolvable products -- a pellet (Camel Orbs), a twisted stick the size of a toothpick (Camel Sticks) and a film strip for the tongue (CamelStrips) -- had their debut at this week's National Association of Convenience Stores convention.

The products are made of finely milled tobacco and come in the flavor styles of fresh and mellow, spokeswoman Maura Payne said. The products last from two to three minutes for the strips, 10 to 15 minutes for the orbs and 20 to 30 minutes for the sticks.

"We're meeting the adult tobacco consumer where they are in society today,"
Payne said. "Consumer research has found that adult tobacco consumers have wanted another option for using tobacco where it wasn't comfortable or they weren't permitted to smoke."

Reynolds said that it is the first major U.S. tobacco manufacturer to offer the products. Star Scientific Inc., a smaller manufacturer based in Petersburg, Va., has been selling its dissolvable tobacco products -- Ariva and Stonewall -- in select regional and national chains such as Food Lion and 7-Eleven.

Reynolds plans to test the new products in Indianapolis; Columbus, Ohio; and Portland, Ore. The orbs and sticks products will have their debut in January and the strips in the second quarter.

Although Reynolds does not dictate retail prices, the company said that the dissolvable products should sell at a comparable price to a tin of Camel Snus, which is between $4 and $4.50.
The products drew criticism from the Campaign for Tobacco-Free Kids, which has protested most Reynolds tobacco innovations in recent years.

"These products are flavored and packaged like candy, and very likely will appeal to children," said Matthew Myers, the president of the advocacy group.

"These products appear to be part of a continuing effort by RJR and other tobacco companies to get around the growing number of smoke-free laws and give smokers new ways to sustain their addiction in places they cannot smoke," Myers said.

Payne said that the products are sold in child-resistant packaging. Only adult consumers will be able to buy the products, and they will carry the same health warnings as other oral smokeless products.

Bill Godshall, the executive director of SmokeFree Pennsylvania, said that Reynolds is probably trying to introduce its new smokeless products before potential Food and Drug Administration regulation stamps out most innovation.

"I'm pleased that Reynolds is being aggressive in accelerating the switch to smokeless tobacco and getting more products that are likely to appeal to tobacco users," Godshall said.
In the past nine years, Reynolds has expanded its flagship brand Camel through such introductions as Camel Exotic Blends, Camel No. 9 and Camel Signature. It has branched out with Camel Snus, a smokeless product that is being promoted as the industry's best bet in a post-smoking environment.

Michelle Roehm, an associate marketing professor at Wake Forest University, said that she likes the packaging design.

"It appears to mimic the shapes and sizes of PDA devices that we're all accustomed to carrying around these days," Roehm said. "The design speaks to the occasions on which the products are likely to be used, such as on smoke-free flights, where it can conveniently be stored and accessed in the compartments of a carry-on bag."

Roehm said that the shape of the packaging does lend itself to complaints "from certain sectors that the product may catch the eye of children because the package resembles those used for gum."

John Sweeney, the director of the sports-communication program at UNC Chapel Hill, said that Reynolds will need to be subtle in how it markets the dissolvable products.

"If the ads surround Camel Sticks with bursts of color and youth-oriented language, there will be a social uprising," Sweeney said. "On the other hand, if the advertising is adult in orientation and quietly informative, the product may be left to find its way."

Products at a glance
R.J. Reynolds Tobacco Co. is preparing to test three new Camel smokeless tobacco products in 2009.
Product - Flavors - Flavor length - Pack amount - Nicotine amount
Orbs - Fresh, mellow - 10-15 minutes - 15 - 1 milligram per orb
Sticks - Mellow - 20-30 minutes - 10 - 3.1 milligram per stick
Strips - Fresh - 2-3 minutes - 20 - 0.6 milligram per strip
Source: R.J. Reynolds Tobacco Co.