Triumph Snus is Dead; Here Comes Lorillard Moist Smokeless Tobacco?
Lorillard's decision seems based on four factors: Fear, Lack of Imagination, Arrogance, and Ignorance. Lorillard is a cigarette company run by "Old Cigarette Guys" still living in 1968. They live and die on the success of one brand of their cigarettes and one brand alone: Newport Menthol.
Here's where the Fear comes in. While cigarette consumption in the United States continues its gradual decline, menthol cigarettes as a percentage of all cigarettes purchased is showing positive growth. This should be good for Lorillard Tobacco, but for some mysterious reason, Newport cigarette sales are down for the quarter by 6.5% and for 2009 only rose by less than 0.5% . Menthol smokers are switching from Newport to other menthol brands! How can this be, Lorillard asks? Newport has been the most popular menthol cigarette in decades. What is wrong with the little people, anyway?
What is wrong is that Newport's popularity was based on word of mouth for many years. They spent virtually no money on product placement in decades: you have to either know Newport and ask for it by name or squint at the convenience store's wall of cigarettes. If you're lucky and patient, you will find 2-3 facing rows of Newport buried at the bottom; well below counter view.
It's 2010, Lorillard. Your 1970's consumers are dying off, quitting cigarettes altogether, switching to Swedish snus, or looking for deals as punitive cigarette taxes continue increasing, Newports are no longer considered worth the price. While Camel Crush and Marlboro No. 54 menthol cigarettes get all the placement, promotion, and consumer notice, Newport is turning into what Lucky Strike unfiltered were in the 1970's: a cigarette your dad or granddad used to smoke. Newport cigarettes are just not cool anymore. Lets see where Newport's market share is a year from now.
Camel SNUS and Marlboro Snus are still available and supported by Reynolds and Altria. Camel SNUS has gone national in distribution and Altria states that Marlboro Snus will go national in March. That's because they understand it's 2010 and by the time 2015 rolls around, snus will be an American staple. I applaud them both, not for the appalling taste, low bio-available nicotine, and "when you can't smoke, snus" marketing of their snus-like products, but for spending advertising and marketing dollars today for the big payoff down the road. The quicker more Americans learn about snus as a concept, the quicker they will discover REAL Swedish Snus. We will all be healthier for it.
Back to Lorillard, this brings us to Lack of Imagination. Lorillard has no vision and so is re-active. Triumph Snus was completely unsupported so it failed. Lorillard can read statistics very well (refer back to Fear) and American Moist Smokeless Tobacco or Dipping Tobacco has shown an 11% increase in the last year.
Which brings us to Arrogance. Forget the big guys; if all the small and medium sized American Moist Snuff producers are succeeding, then of course mighty Lorillard can conquor the market! Sadly, I don't believe this will ever become remotely a reality because of all four of Lorillard's failings: Fear, Lack of Imagination, Arrogance and Ignorance.
Just as they discovered with Triumph Snus, marketing to American Smokeless Tobacco users is not the same as cigarette marketing was 30-40 years ago. Taking on Skoal, Copenhagen, Swedish Matches Red Man and Timber Wolf, and even industry upstart American Smokeless Tobacco's Tomahawk Moist Smokeless Tobacco is going to be much more challenging then they think....mostly because Lorillard just doesn't understand 2010 tobacco consumers unless they are AARP Members.
As usual, Lorillard strictly controlled the information about de-listing Triumph Snus, their plans to enter the American moist smokeless tobacco market, and the termination of their production agreement with Swedish Match to the main-stream press. Knowing the futility, I never the less reached out to Lorillard's Ronald Milstein; Senior Vice President, Legal and External Affairs, General Counsel with whom I have a less than satisfying relationship with. As I sadly suspected, he did not respond to email. I was tempted to call him on his cell, but what was the point? Lorillard seems to handling all the public damage control on the Triumph de-listing and the severing of their contract with Swedish Match. He would probably just read me the press release if he didn't hang up immediately.
The Wall Street Journal broke the story on Monday, but you have to be a paid subscriber to read the entire article so I'm not linking you to it. Times are tough in America today. This article by Anjali Cordeiro of Dow Jones Newswires, Lorillard To Enter Moist Smokeless Tobacco Category or a similar but more current one from CSP, Lorillard to Enter Moist Market, will fill you in on the canned propaganda Lorillard has released and other interesting facts. The CSP article even has banner ads for Swedish Match Distribution, ironically enough.
The pathetic Lorillard "website" doesn't even have a Press section or even Press Releases...at least not one you can find. They just have a big document vault which seems for the most part to hold litigation related information. This will not deter the SnusCIA from digging deeper and we will bring you further "you can only find it here" information as we discover it.
For example, we asked Swedish Match spokesperson Rupini Bergstrom, Triumph Snus aside, what is Swedish Match's intentions in the US market and their experiences with Swedish Match snus products in the US. She replied firmly "We remain committed to the US market. Wherever we have a Swedish snus offering, we see a clear interest from American consumers."
SnusCENTRAL.org is not satisfied with settling for the public information Lorillard has chosen to make available. They make cigarettes; who is going to make moist snuff for Lorillard? The SnusCIA picked up an interesting reference to a Lorillard/Nordic American Smokeless partnership. I spoke to Darren Quinn of NAS about this recently and he changed the subject.....which makes it all the more interesting. NAS v2.0 (after their split with Taboca A/S) makes Nordic Ice snus and Klondike Moist Smokeless Tobacco. Nordic American Smokeless v2.0 is involved in a major reinvention of itself, but that is for another one of my future fascinating articles.
If history is any indication, regardless of who or how Lorillard produces their so-called "Moist Smokeless Tobacco", it will fail not necessarily on taste, but Lorillard's demonstrated poor understanding of current tobacco consumers, having absolutely no intention of learning the smokeless tobacco vertical, and the huge wall they have built around themselves cutting off consumer contact and interaction. Triumph Snus in terms of quality and taste, was the best of the American snus-like products....because Swedish Match made it for them. Triumph didn't sell because it was bad; it didn't sell because the Field Reps didn't understand/know how to sell the product, the people who wanted to buy Triumph didn't all live in Georgia and Ohio and simply couldn't get Triumph snus since unlike Swedish Match, Reynolds and Altria, no effort was ever made to expand the Triumph snus target markets.
This latest lurch by Lorillard is too little too late. FDA has already indicated it wants to ban menthol once it has the legal authority later this year. Should that occur, (after the 2010 Congressional elections) it will happen quickly as it did for clove cigarettes. Without Newport, for all intents and purposes, there will be no Lorillard Tobacco Company anymore. An 11th hour hacked-together American Dip product is not going to save the dinosaurs.
Enjoying my REAL Swedish Snus,
Swedish Snus Ambassador to the United States
Reporting for SnusCENTRAL.org