Spotlight on Smokeless

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Spotlight on Smokeless

03/09/2016

When it comes to the data, the smokeless tobacco segment — chew, dip, snuff, moist, snus, etc. — is still fairly “steady as she goes.” But beyond the data, there is some fire. Smokeless tobacco continues to lead the other tobacco products (OTP) category for convenience stores with a smokin’ 60.6-percent share of dollar sales, according to recent industry figures.

Dubbed “the little train that could” by c-store industry analyst David Bishop, managing partner at Barrington, Ill.-based sales and marketing firm Balvor LLC, the smokeless tobacco segment still appears to be benefiting and moving forward in direct contrast to some of the negative press surrounding combustibles. As Bishop has stated at several industry events, “the headwind for combustibles becomes the tailwind for smokeless.”

Looking at the just-completed year, stats from the MSAi database and OTP supplier Swisher International Inc. reveal that moist snuff continued to grow at a steady rate of approximately 2 percent and was on trend to reach 1.5 billion cans sold for 2015. “Top-performing moist retailers are seeing growth in the category and continue to dedicate more shelf space to it to meet customer needs,” even in light of growth in other segments of OTP such as electronic cigarettes and vapor products, stated Jeff Rossi, senior director of category management and trade marketing for Swisher International.

On a similar trajectory, Wells Fargo Securities LLC recently reported that overall smokeless volume for the fourth quarter of last year moderated to about 3.1-percent growth, and it is forecasting that volume will be up 3.5 percent for fiscal 2016.

Beyond the numbers, there’s also news that is putting smokeless in the spotlight. Here’s a look at some of the latest headlines concerning this non-combustible segment that still has a progressive fire burning.

MORE YOUNG ADULTS SWITCHING TO SMOKELESS?

The smoking rate among U.S. adults aged 18–29 has declined 12 percentage points to 22 percent over the past decade, a steeper decrease than any other age group, according to the annual Gallup-Healthways Well-Being Index, fielded Jan. 2 through Oct. 8 of last year.

Researchers believe the decline in the smoking rate could be related to young adults switching to non-cigarette tobacco alternatives, including smokeless tobacco, which are utilized by 5.4 percent of adults aged 18–29, also higher than any other age group.

Gallup and Healthways, a well-being improvement company, only started asking tobacco product users to specify whether they use cigarettes, cigars, pipe tobacco or smokeless tobacco in 2014. While the limited trend does not allow researchers to determine whether the use of non-cigarette tobacco products has inversed over time, the data does show young adults are more likely than other age groups to use all types of non-cigarette alternatives.

Gallup found that 20.4 percent of Americans use two or more forms of tobacco products, while 2.5 percent use three or more types. Among adults aged 18–29, 23 percent reported using at least two forms and 4.9 percent reported using three or more, again indicating a higher likelihood that the younger age group uses non-cigarette tobacco alternatives.

As for what’s leading young adults to use alternative tobacco products, Gallup and Healthways cited curiosity, appealing flavors, peer influences, high cigarette taxes and smoking bans.

SUPPORT FOR MODIFIED-RISK SNUS LABEL

Regulatory matters are also making headlines in the smokeless universe.

For instance, Swedish Match North America (SMNA) is still seeking Food and Drug Administration (FDA) approval of its Modified Risk Tobacco Product application (MRTP) for its General snus products that were launched more than a year ago.

The FDA’s Tobacco Products Scientific Advisory Committee last spring recommended that the products should not carry a modified-risk label. “Modified risk” means tobacco products that are sold, distributed or marketed with a claim to reduce harm or the risk of tobacco-related disease. But Swedish Match CEO Lars Dahlgren said the company remains “cautiously optimistic” about eventually being able to market its snus in the United States with a MRTP claim.

The Tobacco Control Act establishes rigorous scientific criteria an applicant’s tobacco product must meet before the FDA can allow the applicant to sell that product with a MRTP claim.

At the end of last year, Swedish Match got some support for its modified-risk application in the form of a journal article published by a well-known health expert.

Featured in the Journal of Nicotine and Tobacco Research, a late 2015 study by University of Louisville Professor Brad Rodu, co-authored by a university colleague, a University of Vermont psychiatrist and a Swedish tobacco/nicotine researcher, found that tobacco users who view “proposed relative-risk labels are more likely to perceive snus as less harmful than cigarettes and may be more likely to use and buy snus.”

Rodu’s study analyzed a SMNA-funded, premarket online survey of more than 13,000 respondents to measure perceptions of proposed product warning labels vs. the current warning labels on Swedish Match snus packages, which state: this product can cause mouth cancer; this product can cause gum disease and tooth loss; this product is addictive; and this product is not a safe alternative to cigarettes.” In its MRTP application, the supplier seeks to drop the first two warnings, retain the third, and have the fourth replaced with a label stating: “No tobacco product is safe, but this product presents substantially lower risks to health than cigarettes.”

Compared with the current not-a-safe-alternative warning, Rodu’s research showed smokers who viewed the proposed new labels were significantly more likely to use or buy snus, and the same held true for smokeless users and other tobacco users who viewed the substantially-lower-risk label. These results, Rodu said, indicate that the proposed new labels “could foster a transition from cigarettes and other combustible products to snus, a result that would represent a significant health advantage for individual smokers and public health generally.”

FDA GIVES SNUS A PREMARKET WIN

Before 2015 came to a close, the FDA did give Swedish Match a favorable ruling — but not related to its MRTP application, which is still “pending.” Instead, eight new snus products from SMNA will be allowed on the U.S. market following a landmark ruling by the agency.

The FDA announced in November that it issued its first product marketing orders through the Premarket Tobacco Application (PMTA) pathway for the eight SMNA snus products under the General brand name. The agency said this decision does not constitute an authorization for these items to be sold as modified-risk tobacco products, but rather “reflects evidence showing that these products, marketed as described in the manufacturer’s application, would result in a low likelihood of new initiation, delayed cessation or relapse” and “would likely provide less toxic options if current adult smokeless tobacco users used them exclusively.”

The PMTA marketing order allows the products to be sold in the United States, but does not mean they are safe or “FDA approved,” the agency said, reiterating that a separate MRTP approval is required for a company to market a product with claims of reduced exposure or reduced risk.

What this basically means to U.S. consumers who purchase the eight affected General snus products is that they can now buy the 2015 versions of these products, not the 2011 versions. The eight General snus products affected are: General Original Portion, General White Portion, General Loose, General Wintergreen, General Mint, General Mini Mint, General Nordic Mint, and General Classic Blend.