2 minute read
Cigars
Most market research fi rms combine traditional smokeless tobacco products, such as moist, loose chew and snus, with the more recent newcomer segment of modern oral nicotine, including the highly popular nicotine pouches. From an analysis point of view, that appears to be a benefi cial pairing because it makes the segment a strong leader among the collection of all other tobacco products (OTPs).
Per IRI convenience store data for the 52 weeks ending Dec. 26, 2021, dollar sales for the overall smokeless subcategory grew by almost 6% in U.S. convenience stores. Plus, Nielsen noted the combination accounts for 11% of the total tobacco/nicotine category.
When separated, the division between traditional chewing tobacco and modern nicotine becomes very apparent. The spitless segment, which includes nicotine pouches, lozenges and toothpicks, jumped more than 42% for the period, per IRI. On the other hand, chewing tobacco/snuff fell short of even 1% in dollar sales growth. The volume breakdown was even more disparate: chewing tobacco/ snuff fell by 6.1%, and spitless climbed by 52.3%.
Modern oral nicotine products certainly pushed sales for Tri Star Energy, according to Rick Staley, merchandising manager. Based in Nashville, Tenn., the company owns and operates more than 70 Twice Daily c-stores along with White Bison Coffee and Sudden Service retail sites.
“Our smokeless tobacco, including nicotine, had high double-digit growth in 2021. I am excited about the nicotine growth for 2022 after two years of strong double-digit growth. We’ve been adding more nicotine brands and expanding on the back bar space,” said Staley. “(However, I’m) always concerned about the government increasing taxes on OTP and nicotine.”
“Our smokeless tobacco, including nicotine, had high double-digit growth in 2021. I am excited about the nicotine growth for 2022
LEGISLATIVE OUTLOOK
Indeed, that’s the general sentiment among most tobacco/nicotine category managers throughout the industry. In addition to taxes, the National Association of Tobacco Outlets (NATO) reported state fl avor bans are still a hot topic. Indiana and New Jersey are the latest to join the crowd of states introducing legislation to restrict sales of fl avored tobacco products, including menthol. Those all-encompassing regulatory actions could impact both traditional smokeless options and pouches.
However, there may be some favorable regulations coming down the road, too.
“On the policy front, we’re tracking state legislation that would allow for a 25% to 50% tax discount on tobacco/ nicotine products that receive a modifi ed-risk order from the U.S. Food and Drug Administration,” said Alex Clark, CEO, Consumer Advocates for Smoke-free Alternatives Association. “While the modifi ed-risk authorization process is expensive and arduous, we’re hoping to see more applications for smoke-free products going forward.”
Spitless Tobacco Leads Smokeless Growth
Smokeless tobacco sales grew 5.9% for the 52 weeks ending Dec. 26, 2021, led by spitless tobacco, which saw dollar sales increase 42.3% and unit sales climb 52.3%.
Product
Smokeless tobacco
Dollar Sales Dollar Share of Category Unit Sales Price per Unit
Current 1-Year % Change Current 1-Year Change Current 1-Year % Change Current 1-Year Change
$8.68 B 5.9% 100.0 0.00 1.43 B 2.0% $6.09 $0.22
Chewing tobacco/snu Spitless tobacco
$7.26 B 0.8% $1.42 B 42.3% 83.6 16.4 -4.20 4.20 1.13 B -6.1%
$6.42 $0.44 295 M 52.3% $4.83 -$0.34
