Product area strategies
Snuff
Snuff, or snus as it is known in Scandinavia, is a smokefree form of tobacco that has become increasingly preferred. The trend is driven by the growing awareness of the health effects caused by cigarette smoking and the constantly expanding political measures to reduce or eliminate smoking. A number of independent scientific studies have provided documentary evidence that the health risks associated with snus are considerably lower than the risks associated with cigarette smoking. This means that more and more cigarette smokers in an increasing number of countries will be demanding alternatives to cigarettes. There is a clear link between the decline in cigarette smoking and the growth of snus consumption over many years in Sweden. Read more on the page Tobacco use in Sweden.
Swedish Match has a leading position on the Scandinavian market. In the US, the worlds largest snuff market, the company is one of four major manufacturers, where it is well positioned in the rapidly growing value priced segment. Swedish Match’s growth strategy is aimed at further strengthening these positions and developing snuff as a smokeless alternative in an increasing number of markets.
Cigars
Swedish Match is one of the world’s largest producers of cigars and cigarillos in sales value. The Company has the number one position in the premium segment in the US and a strong position for machine made cigars in both the US and in Europe.
Swedish Match's strategies for cigars are to strengthen its market positions in the two main markets - the US, which is the world’s largest cigar market, and Europe, and to focus on global growth segments as well as segments where its presence can be increased. Natural and aromatic cigars, for example, are segments which have experienced growth most recently. The strategy is also aimed at expanding the market for the company’s strong brands in the US premium segment to also cover an increasing number of countries in other parts of the world.
Chewing tobacco and pipe tobacco
Swedish Match has a leading position in the US for chewing tobacco and is one of the worlds largest players in the pipe tobacco segment. Both of these product areas are characterized by declining demand, with relatively few new consumers entering these categories. Both businesses have demonstrated solid profitability with strong cash flow, making a positive contribution to the Group’s strength.
In the area of chewing tobacco, Swedish Match is prioritizing and evaluating new smokeless tobacco alternatives. The strategic focus on product development will continue, in order to broaden the product offering and increase the proportion of new markets. The strategy involves continuously increasing productivity and strengthening market positions to sustain good profitability.
Lighters and matches
Swedish Match is the world’s largest producer of matches and has a wide geographic reach for its lighter sales. The market for matches is declining, while the market for lighters has stagnated. Both products are exposed to intense price competition from low-cost countries. Today, Swedish Match has improved efficiency in its manufacturing operations, and the operating profit and operating margin have been improved significantly in recent years. The strategy is to defend and strengthen its positions in key markets in coming years.