• by Karl Greenberg , August 22, 2007

Philip Morris USA, Richmond, Va.-based unit of Altria Group, is entering the moist smokeless tobacco--snuff--market this fall with Marlboro Moist Smokeless Tobacco. The product, which comes in cans, and "logs" of cans--not pouches--in original and wintergreen flavors, will be launched initially in Atlanta as a test market.

The company will aim for a mid-range price of $3 per can, midway between the highest-priced products and the lowest-priced products in the Atlanta market.

David Sutton, a spokesperson for the company, says the new product will arrive in mid- to late October, with promotional activity at retail, and via direct mail and Internet, with age verification. "The product will be merchandised in the smokeless tobacco category, but also on cigarette fixtures," he says, adding that the product will also be marketed at Marlboro.mst.com, with third-party age verification at the site.

Sutton says the product, a fermented tobacco that is Philip Morris' first foray into that market, reflects the company's "adjacency growth strategy" which the company introduced two years ago. That program aimed to expand the company's tobacco product range, including cigarette alternatives.

"We said in 2005 that we would look to expand growth and business beyond the core cigarette business," says Sutton. The company launched Taboka Tobaccopaks, a dry-tobacco smokeless tobacco alternative, in Indianapolis last summer. Last month, the company launched another low-moisture product called Marlboro Snus in Dallas/Ft. Worth. Snus, which originated in Sweden, is sold in small pouches that users place in the mouth and comes in rich, mild, mint and spice.

Taboka and Snus are both pouch products. Snus are low-moisture content, and because of that they are spit-free, as opposed to moist smokeless--which is moist and fermented, requiring expectoration, per Sutton.

The low-moisture products, he says, are aimed specifically at adult smokers looking for a different product.

The company isn't alone in expanding its product line. US Smokeless Tobacco Company, which makes the Copenhagen brand, is introducing a line of premium products aimed at smokers looking for an alternative. Called Cope, the product will be reportedly supported by a print effort in adult-oriented magazines as well as sampling, POP and at freshcope.com.

According to First Research, cigarettes account for 90% of all U.S. tobacco products, while chewing tobacco and snuff comprise 6% of the market and cigars, 2%.

Chewing tobacco contains large pieces of tobacco leaf in the pouch, per Sutton, whereas with snuff products, the product is much finer and smaller. Among moist, smokeless tobacco consumers, 30% buy fine cut and 61% buy long cut.