Our value chain
The value chain for our products includes research and development of new and refined products, raw material sourcing and production, processing at suppliers, manufacturing at Swedish Match’s facilities, transportation and distribution between the various value chain stages, and sales through distributors and retailers (customers) as well as consumer use and final disposal of products.
The following section identifies Swedish Match’s sustainability risks related to the value chain and how they are managed.
Raw materials/Supplier
Ability to influence: Medium
The main direct materials for Swedish Match are raw tobacco, timber, nylon and lighter components, as well as packaging material such as cardboard, plastics and metalized films. The raw tobacco is primarily sourced from major global suppliers. Direct material other than raw tobacco is sourced from a wide range of suppliers and regions. The focus is to safeguard sustainable supply, ensure Swedish Match’s standards and to develop supplier capacity to improve their sustainability performance, which actively promotes our ambitions throughout our supply chain. This requires careful assessment and selection of suppliers.
Risks
- Supply interruptions due to severe weather conditions caused by climate change.
- Potential connections to social, ethical, and human rights violations.
- Supply interruptions due to unethical business practices in our supply chain.
Swedish Match manages these risks by
- sourcing materials from different parts of the world.
- applying a risk-based approach to mitigate environmental, ethical, and human rights risks among direct suppliers as well as further up in the supply chain.
- auditing suppliers to safeguard standards.
- providing training and drive improvement initiatives.
- identifying alternative sources of supply.
Factory/Warehouse/Office
Ability to influence: High
Swedish Match manufactures snus, nicotine pouches, moist snuff, chewing tobacco, cigars, matches and other fire related products, as well as lighters at 16 facilities – in Sweden, the US, the Dominican Republic, Denmark, the Netherlands, the Philippines, and Brazil.
We are committed to reducing our environmental footprint, maintaining high ethical standards and providing equal opportunities.
Risks
- Prolonged disruptions in production caused by severe weather related to climate change.
- Negative impact due to social, ethical, and human rights violations.
- Unethical behavior due to weak governance.
- Violation of safety regulations at our facilities.
Swedish Match manages these risks by
- performing climate risk assessments as part of the annual ERM process.
- establishing loss prevention and continuity planning program.
- applying relevant environmental management systems.
- conducting periodic inspections of major facilities by an independent third party.
- providing governance systems and training to reinforce sustainability policies
Transport/Distribution
Ability to influence: Medium
For the Swedish and Norwegian market, Swedish Match has its own distribution company, SMD Logistics. In other parts of Europe, products are distributed primarily through third party distributors. Distribution for the US market is primarily via third parties. Lights products utilize a wide network of distributors worldwide.
Risks
- The transportation fleet is GHG emission intense.
- Violation of safety regulations at distribution companies.
Swedish Match manages these risks by
- choosing more efficient and modern transportation solutions.
- setting fuel efficiency and emissions reduction targets.
- providing governance systems and training to reinforce sustainability policies.
Customer
Ability to influence: Low
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 our own dedicated stores in various markets.
Risks
- Failure by our customers to comply with our “Adult only Tobacco and Nicotine” policy.
- Limited opportunity to influence decision-making at the points-of-purchase.
- Corruption and bribery activities.
Swedish Match manages these risks by
- improving trade and point-of-purchase communication by educating retailers to prevent underage using of tobacco and other nicotine containing products.
- providing mandatory training for relevant employees on anti-corruption and bribery.
- terminating supply to customers who fail to meet our ethical standards.
Consumer
Ability to influence: Low
Our products are intended for adult consumers only. A large part of our smokefree consumer base seek less harmful, discreet, and enjoyable alternatives to cigarettes. Product quality and safety are of utmost importance.
Risks
- Misalignment between consumer perception and actual product attributes, resulting in an adverse change in consumer behavior.
- Unclear consumer communication which jeopardizes reputation.
- Negative impact on the environment due to post consumer littering.
Swedish Match manages these risks by
- marketing products responsibly and providing transparent information to consumers.
- keeping up the proactive approach to product safety with GOTHIATEK® and MATCHTEK® quality standards.
- incorporating more sustainable practices with regard to product packaging.
- highlighting public health and sustainability aspects in consumer communications.
