Business is up to snuff at Swedish Match North America -- that's snuff tobacco. A subsidiary of Stockholm-based Swedish Match AB, the company (SMNA) primarily makes and sells moist snuff and, increasingly, General-brand snus (a spit-free, smokeless pouch) in the US. SMNA also ranks as the largest manufacturer of US chewing tobacco; Red Man is the country's #1 selling label. Snuff brands include Longhorn and Timber Wolf. Among other offerings, SMNA makes mass market cigars, sold under the ubiquitous White Owl and Garcia y Vega brands, and matches and Cricket brand disposable lighters. The company expanded its presence in the tobacco space when Swedish Match acquired premium cigar maker General Cigar.
Virginia-based SMNA has a moist snuff and chewing tobacco production facility in Owensboro, Kentucky. Cigars for the US market mare made in the Dominican Republic and Dothan, Alabama.
Sales and Marketing
SMNA ships products to both wholesalers and selected retailer locations throughout the US direct from its production facility and through company-owned and third-party warehouses.
SMNA's performance is reported under Swedish Match's US Division, which controls local marketing and customer partnerships, and distribution of snus, snuff and chewing tobacco, as well as mass market cigars, in the US. While Swedish Match doesn't break out sales for SMNA, is reported that the US accounted for about 30% of its $1.9 billion in sales in 2012. Moist snuff sales were down slightly in 2012 versus 2011 due to lower volumes. Operating profit was virtually unchanged.
Swedish Match's goal is to be the smoke free leader in the market. (In the US SMNA is the third largest snus and moist snuff company.) It is getting good results from its General snus brand, which nearly tripled its distribution in 2012 and is available in more than 10,000 retail outlets across America. As for moist snuff, Swedish Match's Longhorn brand grew its US sales in 2012, supported by the growth of Longhorn tubs. The company's other tobacco products, cigars and chewing tobacco are profitable.
Going forward, SMNA is focusing its resources on expanding its presence in the snus market. To that end, in 2012 its market-leading General brand of Swedish snus entered seven new US markets, including Los Angeles and New York, where it's sold in convenience stores and tobacco outlets. Unlike Altria and Reynolds American, which make the Marlboro and Camel brand-snus, respectively, SMNA's General brand is more expensive. The company's target market is different, too; SMNA courts smokers who have (or want to) quit, as opposed to those who choose snuff when smoking is banned.
In 2011 Swedish Match restructured its organization and created half a dozen new operating units. The change aims to strengthen business with both customer and consumer, as well as its position vis à vis such competitors as Reynolds American subsidiary American Snuff, UST, and North Atlantic Trading Company's National Tobacco. North America is the world's largest moist snuff market, and SMNA ranks as the third largest moist snuff and snus company.