Three trends in tobacco products and regluation stood out during the NATO Show in May as having the legs to disrupt the category in 2016 and beyond.
They begin with the largest tobacco-product manufacturer in the country: Altria. Given the continued double-digit growth of Reynolds’ Natural American Spirits brand, analyst Bonnie Herzog of Wells Fargo Securities said No. 1 player Altria is “open” to entering the superpremium space via acquisition or developing its own brand.
2. A Vape Ban?
Mitch Zeller, head of the FDA's Center for Tobacco Products was quick to refute claims that the proposed deeming regulations could effectively ban e-vapor, pointing out that only Congress can ban products. Yet Briant of NATO said keeping the predicate product date in 2007 would cost manufacturers millions, if not hundreds of millions, in compliance—meaning only the largest manufacturers would survive.
The Era of ‘Big Marijuana’?
With more states legalizing recreational marijuana, analyst Bonnie Herzog of Wells Fargo Securities is frequently asked if Big Tobacco will enter the space. While she described Altria and Reynolds as being “cautious” in comments about marijuana, she thinks it’s a good fit: “My belief is they will enter when and if marijuana is legalized federally. It makes sense.”
Plunge in oil prices sets the stage for record margins and boost in in-store sales. Also In This Issue: Profitability skyrockets for top performers! Other channels seek to redefine convenience! The economy enters a new stage. The growing health-and-wellness trend. Fuel demand; oil's slide; multicultural momentum; and data, data, data!