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, 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, it reported that the US accounted for 28% of its $1.95 billion in sales in 2013. Sales in the US fell 5% in 2013 versus 2012. Snus and snuff sales fell 3% versus the prior year in part due to lower volumes for moist snuff which were not fully compensated by higher volumes for snus. Operating profit was lower, stemming from increased investments in order to further develop both the US snus presence, as well as pouch and tub products for moist snuff.
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 doubled its distribution in 2013 and is available in more than 21,000 retail outlets across America. As for moist snuff, Swedish Match's Longhorn brand grew its US sales in 2013, supported by the growth of Longhorn tubs. The company's other tobacco products, cigars and chewing tobacco are profitable. However, the US market for chewing tobacco is in a long-term state of decline.
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.
The company is petitioning the US Food and Drug Administration to certify its General-brand pouches of tobacco as less harmful than cigarettes. Swedish match also wants permission to remove one of the required health warning labels because its claims there's "excellent scientific evidence" that the product does not cause oral cancer.