ATLANTA -- While one tobacco analyst 's research shows the test of Marlboro moist smokeless tobacco in Atlanta is slowly slipping down hill, Philip Morris USA says it is preparing to expand the text market based on the positive results thus far.
“We 've been really pleased with the initial reaction to the product by adult moist-smokeless-tobacco consumers in the Atlanta test market,” David Sutton, a spokesperson for PM USA, told CSP Daily News. “In fact, we are in the process right now of expanding the test market to additional counties in the greater Atlanta area.”[image-nocss]
Products will be arriving at retail in those new areas over the next couple of weeks.
And while tobacco analyst Nik Modi of UBS Investment Research initially agreed the early results of the test were positive, a recent look shows repeat sales have been low.
“As expected, PM USA had impressive in-store presence, very good execution and good placement. Trial rates seem to be exceeding (low) initial estimates,” Modi wrote in November, less than two months after the tobacco company 's first foray in moist smokeless tobacco (MST).
Two months later, however, Modi says things have changed. “Marlboro MST 's share position has virtually been cut in half since its launch period,” he wrote this past week.
Further, Modi said MST products from United States Smokeless Tobacco Co. (UST) were seeing a resurgence following an initial drop in share.
“UST 's premium business in Georgia has accelerated the three months post the launch of Marlboro MST vs. the prior four months prior the launch,” he wrote, adding, “UST share losses have subsided since the Marlboro MST launch, [and] UST's trends in Georgia are outpacing the rest of the country.”
While not willing to discuss an analyst 's report, Sutton noted, “The salient point here is we 've been pleased with the initial reaction by the consumers to Marlboro MST in the Atlanta market, and we 're currently expanding that test market to additional counties in the greater Atlanta area. I think that speaks to itself.”
Marlboro MST is offered in Original and Wintergreen flavors and available in Long Cut and Fine Cut varieties. The product retails for around $3 a can, midway between the highest-priced products and the lowest-priced products in the Atlanta market.
Similarly, PM USA announced earlier this month that it was expanding its test of its smokeless and spitless Marlboro Snus products into Indianapolis, as previously reported by CSP Daily News.
Marlboro Snus, currently in test market in the Dallas/Fort Worth area, builds on the brand equity of Marlboro cigarettes and comes in four varieties: Rich, Mild, Mint and Spice.
"We are pleased with the initial reaction by adult consumers, wholesalers and retailers to Marlboro Snus in the Dallas/Fort Worth test market and look to build upon the learnings from that market, as well as our experience with Taboka, in Indianapolis," said Roy Anise, vice president of brand management smokeless for Richmond, Va.-based Philip Morris USA.
Marlboro Snus will be available at retail in the Indianapolis area in March. At the same time, the company will discontinue its test market of it smoke-free, spit-free tobacco pouch product Taboka in the Indianapolis area.
“The experience with snus is in some ways very similar to what we found with MST,” said Sutton. “We 've been very pleased with the way Marlboro Snus has made its way into Dallas. We 're very pleased with the retail presence and retail penetration within the Dallas market.… We 've been very, very pleased with the feedback that we 've gotten from consumers about Marlboro Snus. We 've heard from consumer who, once they tried the product, they really like it.
“Similar to the expansion with MST in Georgia, you 've got a similar kind of dynamic with the move now to take Marlboro Snus into Indianapolis. In other words, based on the positive feedback, we 've decided to put it into a second test market.”
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