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NEW YORK – A new report by Citigroup tobacco analyst Bonnie Herzog stated that Philip Morris' Marlboro Snus spitless product will be successful with both smokers and moist smokeless tobacco (MST) users. The study surveyed both wholesalers and retailers.
"We believe that Philip Morris would not be introducing a snus product under its Marlboro brand had it not been fully comfortable with the quality of the product and the anticipated future demand for the product," the report stated, adding that the test marketing of Taboka -- a similar spitless tobacco product -- was a preparation for the eventual launch of Marlboro Snus, allowing Philip Morris to gain knowledge into taste preferences and demands before the Marlboro Snus brand.
Nearly all of those surveyed stated they would carry the Marlboro-branded snus product if made available to them, the report stated. In addition, Marlboro Snus is likely to see a national roll-out within three to six months, according to the report.
The success comes from the spitless formula and the leverage of the Marlboro brand name, and the product will most likely carry a premium price, the report stated.
Additionally, more than half of respondents believe the product will be priced comparatively to premium moist smokeless tobacco, such as Skoal, while the remaining 46 percent stated Marlboro Snus would be priced comparatively to a pack of Marlboro cigarettes.
With major cigarette companies' introduction into spitless products, the snus category will grow, the majority of those surveyed stated. They also believe Marlboro Snus could attract smokers to the smokeless segment.
Furthermore, the success of the Marlboro product could have an impact on other smokless tobacco manufacturers, the report stated. More than half of respondents believe UST will face the greatest negative impact from Marlboro Snus, according to the survey. However, most of the impact will be in the short term, as UST consumers trial Marlboro Snus.
Also, the snus product will not likely harm cigarette volumes, as 64 percent of those surveyed do not believe it will have an impact, and will be used in addition to cigarettes.