News; May 11, 2007 CET

US – world's largest snuff market

The American snuff market is growing constantly, and demand is increasing every year. As restrictions on smoking become more widespread, more and more smokers are seeking smokeless alternatives. Swedish Match is one of the players in this growing market.
The US is the world’s largest snuff market with annual growth of about 6 percent in recent years. During 2006, growth was a full 10 percent. In total, more than one billion cans were consumed in the US during 2006, and Swedish Match’s market share was 9.9 percent in terms of volume.*

"The US market has tremendous potential. Demand for snuff is increasing, and development in this product category is accelerating," says Patrik Hildingsson, Vice President for New Business Development at Swedish Match North America Division.

Fast growth for portion-packed snuff

After slightly more than ten years at Swedish Match, of which the last two and a half in the US, Patrik Hildingsson knows nearly everything worth knowing about snuff and its potential in the US market. He relates that there is a long tradition in the US of smokeless products, such as American snuff and chewing tobacco, but that the recent growth for snuff is largely because it has attracted new users. In addition to users of chewing tobacco to some extent switching to snuff, an increasing number of smokers are replacing cigarettes with snuff due to the increasing restrictions on smoking. The trend of switching from cigarettes to snuff, has long been evident in Sweden, has spread to Norway and is now also starting to become noticeable in the US.

Portion-packed snuff is still a small but rapidly growing segment, and several US players have launched portion-packed snuff.

"This provides an indication that competitors share our view that portion-packed smokeless tobacco is the future. Previously, there was little product development in smokeless products in the US. Instead, the focus was on pricing and distribution. With competition now increasing in the market, it is important to know how to build brands and develop snuff as a product," notes Patrik Hildingsson.

Launching Swedish snus

Swedish Match’s extensive experience of manufacturing, product development and marketing of snuff and snus in Scandinavia and the US give the company a fi rm base to stand on in THEME the battle for the US market. In addition to already having well-established brands, such as Timber Wolf and Longhorn, increasing demand creates opportunities for introducing Swedish snus in the US.

"In response to interest in Swedish snus, which resulted in several articles in the US press in the past year, we began a test sale of the Swedish brand General at the beginning of 2007 in 100 stores in metropolitan regions in California, Florida, Illinois, New Jersey, New York, Pennsylvania, Texas and Virginia. Our greatest challenges going forward are providing information about the relative health advantages of snuff, increasing availability and positioning Swedish snus in the US," concludes Patrik Hildingsson.

*Source: ACNielsen