Altria Launches New Snuff Brand - Expects it to Be a Success
Altria Group experts predict the new variety of Copenhagen moist snuff with a wintergreen flavoring that has hit the stores’ shelves in November, will gain a major success as well as other products under Copenhagen brand, which is the oldest smokeless tobacco brand across the nation.
Michael Szymanczyk, Altria CEO said the latest dipping tobacco brand would provide the company with additional 8 percent share of the rapidly-growing market of smokeless tobacco products. This category is the only segment of nationwide tobacco market that is constantly growing during the last three years, with a rise in sale volumes of about 7.5 percent comparing to 2008.
And this is definitely not a child’s play: according to the profit reports after the price cut in spring, every percent of market share growth accounted for nearly $26 million in annual profit, reported Altria’s internal financial documentations.
Eric Mule, chairman of Richmond-based Capitol Securities Management Inc., admitted that smokeless tobacco brands are obviously essential for future growth for major tobacco companies.
Altria recently purchased U.S. Smokeless Tobacco, the manufacturer of Copenhagen and Scoal brands, and shortly after the acquisition launched a wintergreen variety, as this flavoring category makes up the largest segment of the smokeless tobacco products market. US Smokeless wanted to introduce wintergreen snuff for quite a long time, but wasn’t able to get a needed flavor. However, after the purchase, the company’s experts joined forces with experts of Philip Morris, Altria’s major tobacco company and managed to find the right genuine flavor, according to Altria senior communications manager William Phelps.
In addition, Copenhage Wintergreen became the first smokeless products to be introduced to the market under Altria Sales and Distribution unit recently founded by the company. The general concept of the operation unit is based on the distribution system that helped Philip Morris USA’s flagship brand Marlboro become the top-selling cigarette brand across the nation. The company marketing experts have been confident that the same strategy would be effective with smokeless tobacco too.
Currently, Copenhagen brand accounts for a 23% market share, with Scoal having 20 percent.
Altria spokesman said they believe that Copenhageen Wintergreen would be a success since many customers admitted they would try it because they are loyal to Copenhagen brand, while others will try it to compare with other wintergreen-flavored smokeless brands.
Boosting Copenhagen market share through launching new varieties has become the major marketing priority for the company. After extensive marketing research, the company has decided to make as few changes to the package design of the new product as they can. Thus the new Copenhagen variety would be packed in the good-old metal can with serif-footed style lettering, which has accompanied the brand for many years.
Richmond store owners agree in opinion that new product will capture many consumers. In several stores it was sold out shortly after the initial shipment and was reordered, while in others the sales slowed a little, however, managers state that it would be hugely popular in the fiuture, as Copenhagen brand is the gold standard in the smokeless tobacco category.
By Joanna Johnson, Staff Writer Copyright © 2010 TobaccoPub. All rights reserved.
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