Tobacco: Smokeless 2016

Where the Gains Are

C-store sales, 52 weeks ending Dec. 27, 2015

According to the IRI, c-store unit sales of smokeless tobacco rose nearly 5 percent in the 52 weeks ending Dec. 27, 2015, with a 4.6 percent increase for chewing tobaccco and nearly 13 percent jump in spitless tobacco.

Other retail channels lost smokeless dollar and unit sales in this time period, with drug off by double digits.

Smokeless type	C-store sales ($ millions)	PCYA*	Unit (millions)	PCYA*
Chewing tobacco/snuff	$5,932.9	8.6%	1,358.0	4.5%
Spitless tobacco	$247.6	19.2%	60.0	12.9%
Total smokeless tobacco	$6,180.6	9.0%	1,418.0	4.9%

Channel Comparison: Smokeless Tobacco

Channel	Dollar sales ($ millions)	PCYA*	Unit sales (millions)	PCYA*
C-store	$6,180.6	9.0%	1,418.0	4.9%
Multioutlet	$680.1	(0.1%)	94.6	(3.5%)
Food	$262.7	0.6%	53.3	(2.7%)
Drug	$8.5	(28.8%)	1.8	(29.9%)

Source: IRI | * Percent change from a year ago

Smokeless Sales: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

A Nielsen database of 25 large chains representing about 14,000 stores showed unit growth for moist snuff and snus in the 52 weeks ending Dec. 19, 2015.

Smokeless type	C-store sales ($ millions)	PCYA*	Pouch/can sales (millions)	PCYA*
Moist snuff	$535.4	6.8%	143.4	3.9%
Snus	$27.2	13.2%	6.9	5.9%
Loose-leaf	$13.9	0.6%	2.2	(2.0%)
Total smokeless	$576.5	6.9%	152.5	3.9%

Moist smokeless type	C-store sales ($ millions)	PCYA*	Pouch/can sales (millions)	PCYA*
Low-price	$238.1	6.8%	74.7	2.8%
Premium	$194.8	13.2%	40.8	0.9%
Portion-pouch	$86.3	0.6%	23.6	14.3%
Midtier	$16.3	6.9%	4.2	0.3%

Sources: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores

Distributor Data: Smokeless-Tobacco Shipments

Calendar year 2015

McLane's average shipments of moist smokeless tobacco per store per week rose more than 10 percent in 2015.

Segment	APSW*** (in dollars)	APSW dollar growth	PCYA*
Moist smokeless	$433.91	$41.29	10.5%
Snus/stick/strip/orb	$23.53	$3.92	20.0%
Alternative	$0.31	($.01)	(4.3%)
Total smokeless tobacco	$457.76	$45.20	11.0%

Source: McLane Co. | * Percent change from a year ago | *** Average shipments per store per week

Market Share by Product: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

The majority of smokeless volume and dollar sales in Nielsen’s large-chain
sample came from moist snuff.

Sources: The Nielsen Co., Swedish Match North America | * Percent change from a year ago

Moist Smokeless Share by Type: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

Low-price varieties provided more than half of the volume sales for the 25
large chains in Nielsen’s sample.

Sources: The Nielsen Co., Swedish Match North America | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores

Cross-Category Opportunity

According to an analysis of point-of-sale data by Management Science Associates, 44 percent of other tobacco products (OTP) transactions included only an item from the category. For the remaining two-thirds of purchases, other items most often included were:

Cigarettes
CSDs
Energy drinks
Bottled water
RTD iced team
Sports drinks
Chocolate bards
Gum
Popular beer (Bud, Coors, Miller)
Juice/juice drinks

Moist Smokeless Share by Brand: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

By unit sales, the Grizzly brand had the greatest share in moist smokeless for the 25 chains in Nielsen’s sample. Copenhagen had the greatest share of dollar sales.

** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores | *** Brands with less than 1% share

Distributor Data: Snus

Calendar year 2015

The most-shipped snus UPC from McLane to c-stores in 2015 was Camel Frost.

Camel Frost
Camel Frost Large
Camel Mellow
Camel Winterchill
Camel Mint
General Mint
Skoal Mint
Skoal Smooth Mint
Camel Robust Large
General White

12.9% - Increase in c-store unit sales of spitless tobacco in 2015, according to IRI

Moist-Smokeless Trends: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

The 1.2-ounce Grizzly Long-Cut Wintergreen rang up the most dollar and unit sales among the top UPCs for the retailers in Nielsen's large-chain sample.

Brands by Can Sales

Brand	Pouch/can sales (millions)	PCYA*	C-store sales ($ millions)	PCYA*
Grizzly	49.6	5.4%	$163.9	9.2%
Copenhagen	43.5	5.9%	$184.1	9.6%
Skoal	28.4	1.4%	$117.2	2.8%
Longhorn	7.7	9.7%	$16.4	8.6%
Kodiak	4.7	(2.7%)	$24.0	0.4%

UPCs by Can Sales

Brand	Pouch/can sales (millions)	PCYA*	C-store sales ($ millions)	PCYA*
Grizzly Long-Cut Wintergreen (1.2-oz)	16.2	17.7%	$56.6	20.6%
Copenhagen Long-Cut Wintergreen (1.2-oz)	7.9	16.6%	$28.9	22.9%
Copenhagen Snuff (1.2-oz)	7.3	(5.6%)	$38.4	(2.0%)
Copenhagen Long-Cut (1.2-oz)	6.2	0.6%	$32.8	4.4%
Grizzly Long-Cut Wintegreen (5-can roll)	6.0	19.6%	$16.8	25.1%
Grizzly Pouches Wintergreen (0.82-oz.)	5.9	1.3%	$20.4	2.6%
Kodiak Wintergreen Long-Cut (1.2-oz)	3.6	(5.2%)	$18.9	(2.1%)
Copenhagen Long-Cut Straight (1.2-oz)	3.5	10.4%	$12.5	17.4%
Copenhagen Snuff (5-count)	3.3	6.3%	$14.9	10.1%
Grizzly Long-Cut Straight (1.2-oz)	3.1	(4.5%)	$10.6	(3.7%)

Source: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores