Business model

How we operate

Swedish Match manufactures snus, moist snuff, chewing tobacco, cigars, matches and lighters at 12 facilities; in Sweden, the US, the Dominican Republic, the Netherlands, the Philippines and Brazil.

Our value chain

The value chain for our products includes raw material extraction and production, processing at suppliers, manufacturing at Swedish Match’s facilities, distribution and sales through retailers as well as consumer use and final disposal of product.

Meeting the needs of our consumers

At Swedish Match, we use a structured approach to consumer insight, bringing increased understanding of brand values, con­sumers and retailers’ needs as well as trends and competition. Our consumers’ views on, and purchases of, our products have influence on the further development of our products.

With a value chain perspective, consumers can be confident that they are buying high quality products that fit their demands.

Innovating and developing new products

Swedish Match has extensive R&D facilities for snus, working to develop new products and to monitor and improve existing products in line with the GOTHIATEK® standard. GOTHIATEK® is developed by Swedish Match and certified by a third party, the SP Technical Research Institute of Sweden. R&D for all smokeless tobacco products is handled by the Scandinavia Division, in our facilities in Gothenburg and Kungälv, Sweden, as well as in Owensboro, Kentucky, the US. For cigars, matches and lighters, R&D is generally conducted at the factory level.

Raw material

A large part of direct materials for our products include raw tobacco and timber, as well as nylon, lighter components and different varieties of packaging material, such as cardboard and plastics. Direct materials are sourced from across the globe.

Raw tobacco

Raw tobacco for snus, moist snuff, chewing tobacco, as well as cigars is sourced through major international suppliers. They are subject to compliance and review with regard to the requirements set forth in our Supplier Code of Conduct. Swedish Match sources raw tobacco from 23 countries. Countries of origin for raw tobacco include Argentina, Brazil, Canada, the Dominican Republic, ­Ecuador, Guatemala, Honduras, India, Indonesia, Italy, Nicaragua, the Philippines, South Africa, and the US.

Timber

Timber for our match production is grown and sourced locally, close to our factories in Sweden and Brazil. Approximately 95 percent of the timber for production of matches in Brazil is grown in Swedish Match’s own plantations. The remaining volume is sourced from local suppliers. Our plantations consist of roughly 6,000 hectares of planted poplar and pine in the south of the Paraná state and in the north of the Santa Catarina state. Our plantations adhere to strict growing requirements beyond those levels set by laws and ­regulations.

Aspen used for the production of matches in Sweden, is sourced from the southern part of Sweden in the vicinity of our splint factory and is primarily sourced through major timber suppliers. ­Relatively small quantities are also sourced directly from individual forest owners. Swedish Match Industries AB, the entity producing matches in Sweden, is certified according to FSC’s standards for Chain of Custody and Controlled Wood.

Production

Snus is produced in our factories in Kungälv and Gothenburg, ­Sweden, in accordance with the strict requirements of the ­GOTHIATEK® standard. Moist snuff and chewing tobacco are ­produced in Owensboro, Kentucky, the US. Cigars are produced in our factories in Dothan, Alabama, the US, and in Santiago, the Dominican Republic. Matches are manufactured in our factories in Vetlanda (splint) and Tidaholm (matches), Sweden, and Piraí do Sul (splint) and Curitiba (matches), Brazil. Our matches produced in Sweden are manufactured according to our own quality standard, MATCHTEK®. Lighters are manufactured in Assen, the Netherlands, Manila, the Philippines and Manaus, Brazil.

Marketing, distribution and sales

Maintaining high standards in the marketing of our products is a core commitment for Swedish Match, especially for our tobacco products which are subject to extensive requirements in local laws and regulations. Our marketing departments are responsible for consumer marketing, which is handled at national level, with the exception of our international brands, e.g. General snus and Cricket lighters. Marketing departments work closely with our legal departments to assure compliance.

The primary sales channels for Swedish Match’s products are supermarkets, convenience stores, tobacconists, and gasoline stations. Other channels include bars, restaurants, airports, and ferries. Swedish Match’s sales representatives work closely with retailers to optimize their business in selling Swedish Match’s products to ­consumers.

Snus is mainly sold through our partners in Sweden and Norway. Snus is distributed to these markets through SMD Logistics AB’s warehouse in Kungsängen, Sweden. Swedish Match owns and operates four exclusive snus stores in Stockholm, Göteborg, Ström­stad and Åre, Sweden. Snus is also sold in the US and other markets in smaller quantities.

Moist snuff, chewing tobacco and cigars are sold through our partners on the US market. Alongside snus, these products are distributed to wholesaler and selected retailer locations via company owned and third party warehouses.

Matches and lighters are distributed and sold through a wide ­network of partners, worldwide.

In Brazil, matches and lighters are manufactured for the local market and are distributed and sold through local partners.

Complementary products, including batteries, razors and light bulbs, among other products are produced by third parties and sold primarily in Brazil through the same partners as for matches and lighters.