C-Stores Dipping Toes into Blue Whale

Alternative smokeless product rolling out in Texas

FOGELSVILLE, Pa. -- Sunridge Distribution Inc. said that more than 2,000 stores in Texas will carry its Blue Whale Premium Tobacco Alternative with NicoDip, including 7-Eleven convenience stores. And Andrew Mitchell, marketing assistant for Toot'n Totum, told the Amarillo Globe-News that his chain is considering the product.

Fogelsville, Pa.-based Sunridge Distribution said Blue Whale has a comparable taste and nicotine kick to other major smokeless brands. The product, which comes in four flavors, is made from tea and enhanced with a botanical extract [image-nocss] that contains nicotine.

About 20 million cans will be produced this year at a manufacturing plant in Marion, Ala., said the report.

Blue Whale's nationwide rollout to a reported 300,000 retail outlets faces stiff competition, the Globe-News said. Market leader UST, Greenwich, Conn., with brands including Skoal and Copenhagen, goes through almost a tenth of that every day, selling about 640 million cans a year.

Local retail outlets and a distributor told the paper that traditional chewing tobacco sells just fine and that substitutesdespite health-related claimshave yet to get any traction.

According to the report, Texas is a critical part of the moist tobacco market. The paper cited data from the Texas Medical Association that shows 3.2% of Texans age 18 and older use spit tobacco versus 2.1% in the rest of the country.

UST, which saw $1.6 billion in revenues in 2005, said its marketing has drawn 700,000 new smokeless customers since 2001, the report said. The company's sales data proves its customers are willing to try new things: Nearly 12% of its sales come from products it has introduced in the past three years, the paper said, citing its annual report.

To gain a marketing advantage, Blue Whale will use something tobacco companies cannot: TV. Jason Policastro, a spokesperson for the company, told the paper that Blue Whale's commercials will be the first chew ads on TV in 25 years.

Meanwhile, Greensboro, N.C.-based Lorillard has announced plans to enter the smokeless tobacco business through a deal with Swedish Match North America. And Reynolds American, Winston-Salem, N.C., is testing a smokeless and spitless product called Camel Snus, while Philip Morris USA, Richmond, Va., is testing Taboka, a smokeless and spitless tobacco pouch product.

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