Nordic American Smokeless v2 – Is there Life after Taboca?

I’ve written a number of generally not favorable articles about Nordic American Smokeless (NAS) and their Nordic Ice and Klondike Snus products. This was do in large part to their dysfunctional relationship with then-NAS-owner Taboca A/S. My last Taboca/NAS article spelled out in ugly detail the end of their relationship.

Darren Quinn, the CEO of Nordic American, is revitalized now that Taboca A/S and their Board of Directors in Norway are no longer in the picture. He is aggressively re-launching the new NAS; coined Nordic American Smokeless Version 2 by yours truly. I will tell you there are some very fundamental differences apparent already. There are also challenges and unresolved issues facing Quinn and NAS v2. He was not shy in laying them out for me which is a huge departure in itself from the old NAS.

Nordic American Smokeless v2: A Level-Set

NAS v2 is a leaner and passionate company; almost a start-up as of today. There are 5 employees with the product manufacturing and distribution being outsourced. Former VP of Sales Bill Eder left the company in December 2009. I rejoiced when I saw this since Eder is a stereo-typical “old cigarette guy” completely unsuited for the smokeless tobacco market. I hunted him down…stalking may be a better term, at the 2009 Tobacco Plus Expo in New Orleans. Our conversation was very disappointing to say the least. Having both Taboca and Bill Eder out of the picture at NAS v2 certainly make the companies future seem much more viable.

Concerning the Nordic Ice and Klondike recipes Mr. Quinn affirms that “all recipes were developed in Gotland . When referring to leaf choices, moisture content, etc., this effort was predominantly driven by Taboca’s snusmeister, Mr. Ingvar Tillman and assisted by the research and testing we did via focus groups, mall intercepts, etc. We went through a number of versions before settling in on our final recipes.”

He continued “Having said that, we are confident our products are formulated in a manner that satisfies the smoker looking to switch. Once we subject our products to additional testing, I will be sure to share the results with you. I can tell you that in the case of both Klondike for dippers and Nordic Ice for smokers, our target audiences were satisfied.”

Developed in Gotland for American tastes, Nordic Ice and Klondike are actually produced in the United States by Swisher Tobacco. Nordic Ice and Klondike snus are sold to retailers and distributors by US Total Sales and Marketing Inc. (UTSM) which is comprised at last count of 22 former top guns at US Tobacco (UST).

The products themselves have received a mixed reception from consumers; flying off the shelves in some areas like Tuscan, Phoenix, and Los Angeles according to Quinn who added that NAS owns 10% of the market in Phoenix. In other markets it is not doing nearly as well. Now that Quinn owns the company, he can focus on American-style marketing unencumbered by a Board of Directors on the other side of the Atlantic.

I can’t judge the Klondike snus products as I am not or have ever been a dipper or liked dip flavors. I forwarded samples of the entire NAS line out to my core group of opinionated taste testers. Of those familiar with dip, comments ranged from “it tastes like dip” to “it has a nice dip flavor at first but drops off fast”. All used the word ‘dip’ even though the can is labeled ‘snus’.

In hindsight, Quinn said calling it snus instead of moist snuff was a mistake. Klondike was originally intended to be marketed as moist snuff, but ‘snus’ was the big buzzword in the smokeless industry and distributors convinced him against his better judgement to call Klondike a snus. That is something he will be changing.

This certainly hurt Klondike when it was first introduced. Fans of loose Swedish Snus users were curious about an American alternative. They expected snus but got moist snuff. Kind of like biting into a pear when you thought you had grabbed an apple. Initial word of mouth concerning Klondike was not very positive in the snus community.

Nordic Ice was marketed as a Swedish-style snus from the start so here it was much easier to rate the product for the non-dip experienced like myself on our taste panel. NAS was set up to succeed in my case. Back at Tobacco Plus 2009, I had to literally pry two samples out of Bill Eder’s hands. I was not at all impressed and when I received the new samples from Mr. Quinn’s office, I instantly knew why. Bill Eder’s samples were long expired and tasted it now that I had fresh product to compare it to. I chose the Frosted Mint flavor to taste since I can’t stand cherry or wintergreen anything.

Considering there is less than 0.4 grams of snus in each portion (24 portions per can; net weight 7.09 grams), I was surprised by the intensity of the taste. Not overbearing or sickly sweet like most other American equivalents and stronger tasting than some Swedish mini portions, I found the flavor pleasant. Unlike Camel SNUS and Marlboro Snus, I did not have the desire to spit the portions out as soon as they started running or vomit shortly thereafter (certain flavors). Nordic Ice was less sweet than Discreet Snus by American Smokeless Tobacco and the mouth-feel was very good. Quinn told me that the pouches for Nordic Ice used a proprietary paper. The portions were certainly well sealed, comfortable, and well made.

Members of my opinionated taste panel were not so kind to Frosted Mint but did concede to it being more desirable than some Big America Tobacco alternatives. One panel member absolutely fell in love with the Nordic Ice Cherry. She likes flavored mini portions and apparently cherry. This snus was a big hit for her.

What Nordic Ice was sorely lacking is free nicotine. Nordic Ice is a dry portion snus having 6mg to 9mg/g total nicotine. Cut those numbers in half to reflect less than 1/2 gram of snus in each portion and factor in the very low pH, and I found myself lunging for a can Extra Strong high nicotine Scandinavian snus. Keeping with the Frosted Mint spirit, I chose Thunder Frosted ES portion with it’s glorious 16mg/pouch of very bio-available nicotine.

Because of NAS having to outsource much of their operation currently and their use of the very attractive but expensive Taboca style metal cans, Nordic Ice Snus is also very expensive for the amount of snus you receive, averaging $4 per can retail. Nordic Ice is competing in the US over-the-counter snus market against (keeping it mint) Swedish Match’s General Mini Mint (20 portions; 0.6 gram each or 12 grams of snus) or soon the new General Mint (24 portions, 1 gram each or 24 grams of snus) for only a few dollars more.. The nicotine is also higher in both in the General Mints; 4mg/pouch and 8mg/pouch respectively.

There are two other points where the legacy of the old NAS lingers and to me, must be overcome as NAS strives to gain momentum. These both revolve around how the products are actually manufactured at the Swisher Factory. NAS sent me one of the original lab reports on Klondike. It showed TSNA levels of less than 1ppm which is considerably lower than any American Moist Snuff product. I have no doubt the Nordic Ice fared equally as well putting it right in line with Swedish snus.

Here’s the problem: There is Swedish snus and Swedish snus. All name-brand Swedish Snus manufacturers use steam pasteurization as part of their snus making process….not as much to achieve low TSNA levels at the factory, but to kill all the micro-organisms which will cause TNSA levels to grow and continue growing after they leave the factory. One new Swedish Snus company; GN tobacco, makers of Olde’ Viking snus, use fermentation instead just like American moist snuff/dip. They too have a very low TSNA level at the factory but even when sealed, if there is air in the can the TSNA’s will start slowly and then more rapidly rising until the carcinogen levels well exceed Reduced Harm standards.

That’s why Copenhagen and Skoal moist snuff is rotated at retail every 30 and 90 days respectively. GN Tobacco is converting to pasteurization as early as this summer. There is controversy on whether or not NAS products are Steam Pasteurized by Swisher. I asked Mr. Quinn in every conceivable way I could think if NAS uses as part of their manufacturing process. He parsed his words carefully in each case, but when I asked him straight out if NAS products are made using the identical process as Taboca uses in Gotland to make their branded products, he hesitated and then said “yes”.

I do not doubt that NAS purchased a pasteurization vessel. My problem is that two very reliable SnusCIA sources have told me that the vessel is sitting at Swisher unused. One stated it was still in the box with a $900K lien on it. The other didn’t know about the lien or if it was still physically in the crate, but was certain it had never been used.

This puts me in a quandary. I doubt Swisher is going to invite me into their facility even if NAS asked. Only Swedish and Danish snus companies do things like that. Therefore, I can simply lay out the competing versions without comment. I have always believed the American Tobacco consumer has an absolute right to know exactly what they are putting into their bodies and how it was made. Once they do, they are free to use whatever products they like as informed consumers. Or at least they could until The Tobacco Act and FDA.

Which brings me to my second concern: lack of expiration dates. Liggett-Vector marketed Grand Prix Snus is still available for sale on the Internet and in gas stations and convenience stores around the country. Grand Prix Snus does not have expiration dates. The absolute last production run of Grand Prix Snus by now bankrupt and liquidated Snus AB of Sweden occurred in September 2008. That is the freshest Gran Prix available. Since it was never a big seller, most of what’s out there is older. Considerably older in all probability. Grand Prix Snus was also fermented.

About a year ago, I finally got ahold of a can of Grand Prix. I knew about Snus AB and I quickly saw they had no expiration dates. What I didn’t know at the time was that Grand Prix was fermented, not steam pasteurized. I do know that I became ill after using three of the tasteless dried out portions.

According to NAS, Nordic Ice Snus has a 12 month shelf life and is rotated by UTSM every 6 months. I asked NAS how UTSM Reps knew when to pull the product if it didn’t have expiration dates. I was told there was a special code on the cans indicating age. I have studied the Nordic Ice cans very keenly, and unless you need special glasses or black light to see the code, there is no unique code on the cans. Just the UPC code and Swisher’s tobacco license number.

Expired steam pasteurized snus will begin to deteriorate in taste and nicotine content. Even if you froze it (you can with Swedish/Scandinavian snus for one year), starting around 14 months the nicotine will begin breaking down and the flavor will change. The TSNA levels will still be still be what they were when they rolled out of the factory, though.

More of my unsolicited advice for NAS, GNT, and any other snus manufacturer not already doing it: print clear expiration dates on the can. In the end, FDA will mandate it anyway…if they don’t ban snus and smokeless tobacco completely first.

Nordic American Smokeless v2: The Vision of the Future

NAS today is not what Darren Quinn envisions NAS being going forward. “We are very passionate about our US restructuring as well as setting realistic and manageable expectations.”. In their separation agreement, NAS does still have access to Taboca soft resources.

“As for our agreement with Taboca,” Quinn explained, “it is very general in scope. My interpretation of the agreement is Ingvar’s team could in fact improve upon our current recipes and create new ones. The team would also assist Nordic American in setting up a US manufacturing facility when the time is right. We have a broad range of thoughts around Nordic Ice brand extensions, all of which require R&D time and funding. Our desire is to continue packaging Nordic Ice in metal cans. Unfortunately for an early stage company such as ours, the change over to the new smokeless tobacco health warnings has created an inventory issue which may require us to scrap our existing metal can inventory. However, whether we move forward with metal or plastic, there are certain manufacturing limitations that we currently face which may not allows us to include a disposable snus area at this time. [the used snus area was in response to my question earlier in the interview] As we transition to our own manufacturing facility, I tend to think that our manufacturing lines will be fitted to allow for a varying assortment of can types, including a can with a disposable area.”

Our view is that as more and more cigarette companies enter the US snus market, it is a positive not only for consumers, but also for smaller companies such as ours since the larger cigarette companies can do a much better job than us in getting the snus message out there.

NAS also plans to increase its distribution capabilities by partnering with other firms like UTSM. NAS is also rumored to be among the dozen or so manufacturers Lorillard is considering for their new moist smokeless tobacco product. Lorillard recently announced the de-listing of Triumph Snus, a superior snus killed by poor marketing and lack of vision.

In the end, with FDA meddling rattling even smokeless tobacco and snus veterans, the economy still tanking, and venture capital markets tight, Quinn is still very optimistic Nordic American Smokeless will be here for the long run and run correctly for the American market. Nordic American Smokeless, Version 2: Darren Quinn has a vision of the future. We can only wish NAS success as they move resolutely forward.