Altria Begins Distribution of Green Smoke Products

RICHMOND, Va. — Fourteen months after acquiring Green Smoke Inc., The Altria Group Inc. is bringing the vapor products to some convenience store locations. 

According to Altria's Chief Operating Officer Howard Willard, the Richmond-based company is expanding Green Smoke products into specific chains. His announcement came during Altria's Investor Day June 23 in New York.

Altria's Nu Mark LLC subsidiary completed the acquisition of the electronic vapor business of Green Smoke and its affiliates in April 2014. To date, the products have been mostly found online.

During its Investor Day, company executives noted the time is right to take advantage of the opportunities on the table for lower-risk and e-vapor products. 

"To seize this opportunity, we are taking a portfolio view of tobacco products and technologies, and applying our substantial capabilities to succeed in the long-term," said CEO Marty Barrington. "Products are an important first step as are distribution and brand building. So, we began by introducing Nu Mark's MarkTen e-vapor products, acquiring Green Smoke and establishing a national brand in distribution platform to enable future growth. 

"We are optimizing our supply chain to support our evolving product portfolio. Nu Mark has invested in a robust quality system and improved supply chain efficiency in cost in particular through the Green Smoke acquisition," he added.

In her reporting on Investor Day, Vivien Azer, director and senior research analyst at Cowen & Co., said management's approach to the next-generation category remains rational, in Cowen's view, as the company continues to roll out innovative products and assess consumer adoption. 

"MarkTen XL launched in lead markets in April, offering twice as much liquid and battery life than its previous iteration," Azer explained. "Meanwhile, Green Smoke, whose presence to date has largely been via ecommerce, is expanding into lead markets with new packaging. There won't be any overlap between retail distribution of MarkTen XL and Green Smoke, allowing management to focus on each product's development independently."

Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, said Altria remains committed to providing alternatives for adult tobacco consumers, moving forward with "purpose and discipline" as it balances its expansion of current offerings — MarkTen family and Green Smoke — with investment in new product development, taking a portfolio approach. 

"We believe Green Smoke could be an interesting opportunity to expand at retail to complement its 'solid' online presence," she said.

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