Lorillard to introduce new smokeless tobacco product soon

Published on March 1st, 2010 11:23

Two weeks ago, Lorillard, the third largest cigarette company, and Swedish Match, the well-known smokeless tobacco maker, agreed on the mutual basis to discontinue their joint venture which was dealing with manufacture and sales of Triumph Snus in the U.S. market.

snuss tobacco

During the Annual Earnings Report Chief Executive Officer Martin Orlowsky declared that Lorillard would come into American smokeless tobacco market in the nearest future.

The segment of smokeless tobacco represented by such tobacco giants as Altria (selling Copenhagen and Scoal) and Reynolds American (with nation’s best-seller Grizzly) has shown a significant growth in the recent years, while cigarette sales have fallen down.

Snus have little common with other smokeless tobacco items, since they are manufactured using a particular pasteurization technology. Snus are selling in diminutive tea-bag like pouches and do not need to be spitted.

Mr. Orlowsky said that snus products have not been successful in test markets and their nationwide launch should be planned for the future, as currently it would be an ill-timed and risky venture. Lorillard CEO considers that U.S. adult smokers will continue to be loyal to traditional smokeless tobacco products, instead of trying new products.

However, Lorillard’s major rivals have the contrary opinion, stating that snus are the future of tobacco industry. Both Altria and Reynolds American have introduced snus to test markets and reported about positive feedback from the consumers, though sales have remained relatively low.

David Howard, Reynolds American communications manager said that they have been delighted with the demand for Camel Snus and consider the product to be very perspective in the nearest future.

Reynolds’s major rival, Altria, as well announced that test-marketing of Marlboro gave positive response, and the product will be launched nationally next month.

However, public health groups do not share the optimism of tobacco companies, saying that though snus could be less harmful than cigarettes, they occupy a very small segment in the tobacco market, as for each snus pack sold across the nation, smokers buy as much as 3.000 pack of cigarettes. Swedish Match still produces its major brands General snus, and Catch and sells them in U.S. tobacco market. These products will continue to be available, as they have been produced outside of joint venture with Lorillard. The company as well makes traditional smokeless tobacco, such as Timberwolf and Red Man brands, also sold throughout America.

As regards Lorillard, the company holds sweeping leadership in menthol cigarettes segment. However, Lorillard’s best-seller Newport cigarette brand accounting for the largest menthol share in U.S. market faced a 6.5% drop in the volume of cigarettes sold in the last quarter, despite its U.S. market share went up from 9.86% to 10.32%.

Lorillard, headquartered in Greensboro, N.C. trails Altria and Reynolds America in the list of the largest cigarette companies across the nation. Besides Newport, the company also sells such popular brands as Max, Kent, Old Gold, True and Maverick. These products offer more than 40 products which differ in taste, price, strength and length.

By Kevin Lawson, Staff Writer. Copyright © 2010 TobaccoPub.com. All rights reserved.

Related tags: Lorillard | smokeless tobacco | tobacco maker | tobacco brands

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