The retail price for Camel Dip is expected to be [image-nocss] in line with that of other premium smokeless products such as Philip Morris USA's Skoal and Copenhagen brands and Conwood's own Kodiak brand. Camel Dip is a Conwood product, said Howard, and it will be produced and packaged at Conwood's plant in Memphis, Tenn., as well as distributed by the Memphis-based company.
The Camel brand was already in the "modern smokefree tobacco" category with the introduction of Camel Snus, which is now available nationwide (click here for previous CSP Daily News coverage) and in lead markets with Camel Orbs (click here for coverage) dissolvable tobacco products (alsoclick here for recent CSP magazine coverage of dissolvable tobacco products).
Later this summer, in the three lead markets of Columbus, Ohio, Indianapolis and Portland, Ore., the company will have the other two styles of dissolvable products: Camel Sticks and Camel Strips.
Camel Dip is a traditional moist smokeless product that is fermented, while the tobacco in Camel Snus is pasteurized.
Camel Snus, as well as the dissolvable Camel Orbs, Stick and Strips, are Reynolds products. But "it makes sense for Conwood to be the company that oversees Camel Dip, because it has the expertise in making the product and marketing the product and selling the product," Howard said. "We're leaning on that expertise with the introduction of this product." He added, however, that Camel dip benefits from Reynolds' extension of an "iconic brand in the tobacco category," that of Camel.
Among the "learnings" the companies will gain from the introduction of Camel Dip in the lead markets is seeing just how influential the brand is when carried over to the moist smokeless category, he said. And Conwood has a long history of providing smokeless products, as well, including the Grizzly brand. "Put all that together, and we think we have a high-quality, premium smokeless tobacco product that adult tobacco consumers are going to enjoy," Howard added. "That gives us a real good opportunity for success."
Camel Snus, which just became available nationwide earlier this year, has been in various lead markets since 2006, and Howard said that the company is confident in its performance. "Based on our learnings since that time, clearly we believe that it is viable product," he said. "We were pleased with results in terms of sales, and in terms of feedback from...smokers as well as our retail customers." It is a product that "we think is going to perform very well down the road."
He added, "One of the primary reasons we're coming out with a product like Camel Dip is our research has shown that there is interest among adult tobacco consumers for a product like Camel Dip."
Skoal, Copenhagen and Grizzly all have between 22% and 24% U.S. market share, according to a report by The Winston-Salem Journal, citing Bill Godshall, the executive director of SmokeFree Pennsylvania and an outspoken advocate of noncombustible tobacco products as a reduced-risk option for smokers.
He said Reynolds is staking its future on smokeless tobacco products, investing resources into innovation and pushing hard for language creating a niche for tobacco products with potential reduced health risk in any potential federal regulation of the industry. Thomas Payne, the executive vice president of public affairs for Reynolds, said that Reynolds is not rushing smokeless products to market to beat potential FDA regulation. "The devil is in the details regarding how smokeless innovation would be handled in the House bill," he told the newspaper. He said that there is a different standard for new-to-the-marketplace products compared with the introduction of products similar to those already available.
Smoking bans and health concerns have led to declines in cigarettes of between 3% and 4% a year, said the report. By comparison, smokeless-tobacco sales are growing by about 4.5% a year. "If marketed to smokers, Camel Dip will benefit public health since smokefree tobacco products are far less hazardous alternatives to cigarettes, and there's no secondhand smoke," Godshall told the paper.
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