Triumph Snus: Upsetting the American Snus Apple-Cart?

It started on October 25, 2006 when, Lorillard Tobacco, the third largest cigarette manufacturer in the United States, released the following press release:

Greensboro, N.C. – October 25, 2006 — Lorillard Tobacco Company today announced that it has entered into an agreement with Swedish Match North America to jointly develop and market a select line of smokeless tobacco products in the United States. The parties anticipate that an initial product offering may be launched on some basis of geographic distribution in the not too distant future.

Swedish Match North America Inc. is the third leading manufacturer of moist snuff in the United States, with such well-known brands as TimberWolf and Longhorn moist snuff, and is a leading manufacturer of Other Tobacco Products, such as Red Man chewing tobacco, Half & Half pipe tobacco, and White Owl and Garcia Y Vega cigars. Swedish Match North America Inc. is a US subsidiary corporation of Swedish Match AB, a Swedish corporation. Swedish Match shares are listed on Stockholmsborsen (SWMA).

Lorillard Tobacco Company is the third largest manufacturer of cigarettes in the United States, including the Newport brand, the best selling menthol cigarette in the country, and the Maverick, Old Gold, Kent and True brands. Lorillard is a wholly owned subsidiary of Loews Corporation (NYSE: LTR;CG). 

No word from Lorillard except to privately confirm that focus groups and tasting had begun in 2007.

And then silence…………. Until March 5, 2008, when Swedish Match announced:

 Triumph, snus on cigarette shelf

Triumph snus, which is now being launched in the US, is the result of a partnership between Swedish Match and Lorillard Tobacco Company.

“Our main target group for this new snus is cigarette smokers and Triumph is available in the places where cigarette smokers feel at home – that is, on cigarette shelves,” explains Patrik Hildingsson, Vice President for New Business Development within Swedish Match North America Division.

Lorillard, the third largest tobacco company in the US, manufactures and sells Newport brand cigarettes and, as a result, has access to attractive retail space. The snus Triumph can be purchased from cigarette shelves, which makes the product more visible and accessible for consumers.

“In our partnership, we benefit from Swedish Match’s solid knowledge about developing and manufacturing smoke-free products and Lorillard’s strong position in the US cigarette market,” Hildingsson explains.

Triumph is a Swedish-style snus, but is also uniquely developed for the US market with its white portion packages arranged in an attractive star-shaped pattern. The can has a combi-lid for used pouches and the packaging is designed for extended shelf life.

 Lorillard has begun test-marketing Triumph Regular and Mint in gas stations and convenience stores in Georgia and Ohio. Despite not requiring refrigeration, this is Swedish snus made by Swedish Match at their Gothenburg, Sweden facility.

A source inside Swedish Match confirmed that the differentiation in the product has to do with the packaging—not the manufacture of the product itself. The cans are packaged in a proprietary manner which extends the shelf life from shipment to shelf. The packaging also eliminates the need to refrigerate the product. It is Swedish snus, however the taste profile may be better suited for American taste buds (which seem to prefer stronger flavors).

And according to early reports, especially against Camel SNUS, Triumph is a winner with Americans hands-down. Even more surprising, Triumph seems to be a hit with many Swedish Snus users as well. Not to the point they would switch; but to the point they would add it to their rotation.

Mild on the tobacco side with peach overtones in both the original and mint, it is described as not artificial like Camel SNUS but sweeter than a traditional flavored Swedish Snus: “designed for American tastes.”

While not advertised or marketed as a Stark/high nicotine product, those in the test markets are reporting a stronger than anticipated nicotine experience. I am waiting to hear back from Lorillard on nicotine content.

Despite it’s lack of refrigeration, the proprietary packaging seems to keep the snus moist….in fact, some report it staying moist longer than traditional Swedish Snus’s. There were a few exceptions reported among users who said the Triumph was dry out of the can, but these reports are so few, that until I try it myself, I would write it off to either extremely bad storage or a bad batch.

There are also an interesting number of comments that Triumph lasts longer than even traditional Swedish Snus…some say over 3 hours! Could this be from the new packaging methods? Unknown.

What I DO know is that is COMPLETELY unfair that Dallas, having to suffer as Marlboro and Camel test markets, were totally ignored by Lorillard concerning Triumph!

Lorillard….hasn’t the Dallas area suffered enough? Please add us to your list of test markets….at the head of the list too please.

And I wonder how RJ Reynolds and Philip Morris US are taking the early reviews on Triumph? Are they going to increase their advertising budgets, improve their products or both?

What of Tourney (bad initial reviews) and other American “snus” products popping up in new test markets on a near-regular basis.

What about price? Triumph is being given away free with the purchase of a pack of cigarettes by some stores; others are charging between $1.50 and $4.00 per can. MUCH less than either Camel SNUS or Marlboro AND Triumph cans contain 24 portions; not 15 or 12 like their competitors. Triumph’s portions are much larger too.

What effect is this going to have on Swedish Match US’s plans to market their line in the US? Currently they have US-based warehouse and shipping facilities for their Internet orders and sell over-the-counter in 17 or so US States: but in Tobacco Stores, not Gas Stations.

How this will change the American Market is yet unknown. But it does highlight one key fact: the American Market IS changing and very, very quickly.

There is a sudden and increasing sense of urgency to provide the US market with a discreet, tobacco and nicotine product that is “reduced-harm”.

Is FDA “control” of tobacco and especially cigarettes next year (it appears) the driving force? Are the tobacco manufacturers pushing product to market so that it may be grand-fathered from future regulation?

Cigarette smokers, your days may be more numbered than I originally estimated just one article ago.

[EXCLUSIVE from Mr. UNZ, Oct 29, 2008:  “Triumph Snus Manufacturer reveals Triumph Snus is LOW NICOTINE:  Lorillard Senior Official Refuses to Confirm or Deny!]

Sincerely,

Mr. UNZ
The Snus Guru

August 18, 2008