Our value chain
Swedish Match manufactures snus, pouch products without tobacco, moist snuff, chewing tobacco, cigars, matches and lighters at 15 facilities1) – in Sweden, the US, the Dominican Republic, Denmark, the Netherlands, the Philippines and Brazil.
The value chain for our products includes research and development of new and refined products, raw material extraction and production, processing at suppliers, manufacturing at Swedish Match’s facilities, transportation and distribution between the various value chain stages, and sales through retailers (customers) as well as consumer use and final disposal of product.
Raw materials for our products come from many geographies and are mostly sourced through outside parties. There are strict requirements in sourcing.
With the GOTHIATEK® quality standard for snus, for example, there needs to be careful testing, at several stages of the value chain, and selection of raw tobacco. Testing often starts at the farm level. This way of working has influence on the long term standards for other tobacco products as well as for other raw material supplies.
Our Supplier Code of Conduct forms the basis of our relationship with suppliers. Our greatest risks, impacts and potential for improvements in these stages of the value chain relate to ethical business practices, child labor and human rights, as well as greenhouse gas emissions. These areas are in focus in our supplier due diligence and dialogue. To reach our goals in several focus areas we are dependent on fruitful collaboration with our suppliers and sub-suppliers.
The policies that guide us in our daily operations are outlined in our Code of Conduct, which applies to all within the Group. It also forms the foundation for our sustainability strategy and results.
Our employees drive innovation and ideas and methods to be a more successful company. Their opportunities to develop to their full potential are an important component in this success and in our sustainability efforts. Our employees are the “drivers and doers” behind maintaining high standards of quality in our products, improving procurement practices addressing carbon intensities, reducing waste, eliminating risks and prevalence of child labor and ensuring high standards of business conduct in our value chain.
For the Swedish market, and for distribution to the Norwegian market, Swedish Match has its own distribution company, SMD Logistics. Other nicotine products, such as chew bags, tobacco bits, and nicotine pouches are distributed through own and third parties in Europe. Moist snuff, US chewing tobacco and cigars, alongside snus and nicotine pouches without tobacco are distributed to the US market primarily via third party distributors. Matches and lighters are distributed through a wide network of partners, worldwide. In Brazil, matches, lighters, and complementary products are distributed through local partners.
The primary sales channels for our products are convenience stores, tobacconists, gasoline stations, and supermarkets. Other channels include bars, restaurants, airports, and ferries, along with e-commerce, and dedicated snus stores in various markets.
Tobacco products are subject to extensive requirements in local laws and regulations and our marketing departments work closely with our legal departments to ensure compliance.
We are committed to providing attractive alternatives to cigarettes, such as snus and nicotine pouches without tobacco, contributing to improved public health. Our products are intended for adult consumers only. We use a structured approach to consumer insight, assessing consumers’ needs, trends and brand values to influence innovation. Our R&D facilities work to develop new products and to monitor and improve existing products in line with the GOTHIATEK® quality standard (for snus).
1) Includes House of Oliver Twist in Odense, Denmark and Gotlandssnus in Romakloster, Sweden, that were acquired during the year.