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August,
2008

Making a Compelling Case for Snus Use

By E. Edward Hoyt III

An upstart domestic snus maker sees the market future among cigarette smokers who want to cut back, but not quit, and has tailored its product and marketing accordingly.

While major tobacco manufacturers like R.J. Reynolds have been investing heavily in educating consumers on the Swedish smokeless product snus - what it is, and what a consumer is supposed to do with it - at least one small upstart manufacturer believes the key to winning over consumers and building a viable market ultimately lies in answering the question “why should I use snus?”

“Camel has given them the ‘what,’ “ explains Dennis Bruce, president of South Boston, Va.-based American Smokeless Tobacco LLC, producer of Discreet and Pro snus brands. “We are going to give them the ‘why.’ “

Based on its own “very informal” survey of cigarette smokers, American Smokeless notes that most smokers flat-out enjoy smoking and aren’t necessarily interested in quitting. They are, however, receptive to the idea of cutting back, and that has formed the basis of the company’s marketing strategy, implemented through the “Reduce with Snus” slogan. The “smoke less” argument, says Bruce, gives cigarette smokers a compelling reason to add snus into the fold - not as a replacement for smoking, but as means of reducing it. Smoking replacement products are already an extremely active segment, and while snus fits that function, Bruce sees no point in going head-to-head where so many others are competing. “That’s a crowded pool,” says Bruce. “There’s already a lot of ‘me-too’s’ out there - products for when you can’t smoke. Snus is absolutely something you can use when you can’t smoke. But we think a better direction for the product is ‘reduction.’ “

Having spoken to hundreds of smokers over the course of months in developing its marketing approach, American Smokeless Tobacco sees opportunity in tailoring its products to smokers who, by and large, have no desire to stop. Bruce says the predominant reaction was, “I don’t want to quit smoking. I’d just feel better if I didn’t smoke as much.”

As such, American Smokeless sees its snus as a “bridge product” to reach an already satisfied consumer who enjoys smoking, but would like to cut back. “If you’re a pack-and-a-half smoker, with a $1.50 zip bag of Discreet or Pro, you’re going to cut that back to a pack,” says Bruce. “People really feel good about that.”

While American Smokeless Tobacco isn’t marketing it’s snus first and foremost as a product to use at times when you can’t smoke, in practice it’s ideally suited. “It’s practical that you’re going to be using the product when it’s less convenient to smoke, whether in the office, the restaurant - so you don’t have to go outside. So it does have a double benefit,” says Bruce. “But more importantly, the way the majors are marketing it now, when the consumer sees snus, I don’t think they see ‘why is this product for me?’ “

In addition to its “reduce your smoking” argument to cigarette smokes, American Smokeless Tobacco has focused on two specific areas, packaging and flavors, to further distinguish its snus from the Philip Morris and R.J. Reynolds entries.

Both Discreet and Pro come in resealable, metallized foil zip pouches that measure approximately 3 1/2 inches square and containing 12 bits. “It’s a lot more convenient vehicle for the product,” explains Bruce, “especially when you’re marketing to smokers, somebody who’s got a pack of cigarettes, a cell phone, a wallet - he doesn’t really want another big box to put in his pocket.” Since the product doesn’t necessitate a large package, American Smokeless elected to go in a different direction than Philip Morris or R.J. Reynolds and emphasize convenience and not be pigeon-holed with competitor’s formats, like the puck or tin.

“We really think the packaging is world-class. The zip bag separates us from the competition in terms of convenience, cost reduction, graphics, and viewpoint,” says Bruce. “It’s a new product. We should package it in a new way.”

The Discreet brand presents a classy, upscale design and is offered in Full Flavor, Cool Mint, Wintergreen, Peach, and Strawberry.

Pro Snus, in addition to more traditional styles like Full Flavor, Green Ice, and Cool Mint, is available in Wild Peach and Wild Grape, with a product presentation geared toward a younger, 21- to 35-year-old male audience.

“We have broadened the flavor horizon. We have seven flavors,” explains Bruce, “and we feel the market would expect that. People have different tastes. They don’t just want a cool mint, a spearmint, or a wintergreen.” For a new category trying to win over first-time consumers, it certainly seems wise to offer a range of flavors and limit the potential appeal of the product. American Smokeless Tobacco isn’t unique in this approach among new contenders hoping to carve market share as the category grows, but Bruce is convinced the public will ultimately expect and demand such choice in flavors.

Add value pricing to the equation, and Bruce believes Discreet and Pro give consumers a purpose as to why they should try this snus.

All snus makers continue to confront the domestic smoker’s pre-conceived notion that oral tobacco is “dip.” While Camel has chosen to specifically label its snus as “spitless,” American Smokeless Tobacco avoids the terminology entirely so consumers don’t erroneously make a connection with dip.

“Hopefully, once the consumer tries the product and sees that it’s pasteurized and not fermented, and you discard it just like a piece of gum, they’ll see there’s no [spit] issue,” says Bruce. “It’s a very convenient vehicle for the satisfaction. But consumer awareness that this is not your grandpa’s dip is one of the hurdles we have to get over.”

While there’s an ever-expanding arena of alternative products available for use when smoking isn’t permitted - from gels to aromatics to dissolvable tobacco - smokers are also increasingly trying out moist pouch tobacco, which has propelled that product’s market share in the smokeless category. “Honestly, I don’t know whether that’s because they want to cut back on cigarette smoking or they’re using it simply when they can’t smoke, or both,” says Bruce. “We hope that consumers will be driven towards the snus, since it’s a pasteurized product and we don’t have the spit issue.”

The company has even trademarked the slogan “Join the Snus Revolution,” a reflection of its belief that snus is indeed the future of tobacco.

American Smokeless Tobacco Co., South Boston, Va., Toll-free: (866) 241-8259, Fax: (866) 245-5458.


SMOKESHOP - August, 2008