Andrew Romeo - An Insider's Perspective on the Industry

I always track the consumer and expert reviews of all the new types of snus which hit the market both here on SnusCENTRAL, and on other snus related forums inhabited by non-Swedes.

This is the new and growing Internet-shop generation.  This generation seeks out flavors and strength, and the reviews resemble those one would see of fine wines, discussing bouquet, flavor intensity and decay, and the proper accompanying beverage. Debates rage:  "What is bergamot?"  "Why does the fig note taste like lemon?"  (One of my favorites about Taboca snus).

Read more: I'm in Sweden...Where's my snus?!

It's well known that all big tobacco players are researching non-tobacco nicotine delivery systems. 

Gum and patch manufacturers, with their 12-week dependency regime products will soon have to compete with similar products that provide "the spike" vs. theirs, which simply frustrate the nicotine addict by under-delivering low, steady levels of nicotine.

Website Tobaccofreekids.org, most likely an anti tobacco, pro-pharma site, reads like a Fox News Cigarette Fanboy's dream. Loads of official cig/dip company visuals, tar and nic content info, and the latest articles from around the world. It can also be unintentionally hilarious.

One example, a critique of "Camel No.9" describes the marketing campaign, implying that it evokes "Chanel No. 5" and stilettos, and thus attracts female minors who read Vogue and Marie Claire.   Dude?  Where's my demographic?  Whatever happened to Pokemon?

The one ‘bright’ spot for TFK.org is encouragement of the use of the gums and patches with their “30-80% success rates over placebos.”

Read more: Thank You for Chewing our Gum!

I was just reading an article in the NY Times from this past week, that HULU, a fairly new video-streaming company with high-falutin' investors like ABC/Disney, can't decide if they have 9 million viewers or 42 million viewers watching network shows on their website.

Nielsen, the ubiquitous research agency, says 9mm.  Hulu doesn't like it. Advertisers are steering clear because Nielsen is a trusted name.  A brand, if you will. They have other research agencies, too.

Read more: Market Research: What's Real?

It's difficult being in Big Tobacco and running its snus business in Nordic Europe.  It's even more difficult if you are in Small Tobacco, and don't have a cigarette business to bring in the cash while your snus factory loses money annually.

At last count, there are under 10 tobacco companies in Sweden manufacturing snus.  There is at least one in Denmark (V2).

Scandinavia sells 220 million cans of snus per year, 200 of which go through the Swedish market + duty free (and leak over to Finland), and 20m which are purchased in Norway.  Until the Swedish government changed, and levied a 100% excise tax increase in 2006, and another 50% increase in 2007, snus was growing at 10% per year in volume terms.  It's now stable, after a quick volume drop.  Norway was increasing excise regularly, and up to 35% of Norwegian consumption now comes from Swedish border shops.

THE SWEDISH MARKET

In Sweden, Big (and small) Tobacco sell snus (and smokes) into 9000 shops, including many independents, organized convenience outlets (7-11, Pressbyran (Reitan)), and organized grocery (ICA, COOP, Axfood).  98% of all tobacco products are delivered by Swedish Match Distribution, a nearly flawless distribution company with roots in the old monopoly.  Swedish Match AB also has 87% market share in snus, so the other producers have all had those 'prickly' moments of being locked in the Death Star's tractor beam when they signed with SMD for snus distribution.

Read more: SELLING SNUS IN SCANDINAVIA: A PRIMER