Cigarette maker Altria Group to expand Marlboro Snus smokeless tobacco nationwide

Altria plans to expand Marlboro Snus nationwide

RICHMOND, Va. — Cigarette maker Altria Group Inc. said Thursday that it plans to expand its Marlboro Snus smokeless tobacco nationwide by the end of March as it looks to shore up its business as Americans smoke fewer cigarettes.

The Richmond-based owner of Philip Morris USA, which makes the top-selling Marlboro brand, began testing the product in select markets in 2007. Snus (pronounced “snoose”) are teabag-like pouches that users stick between their cheek and gum.

As tax increases, health concerns, smoking bans and social stigma continue cutting demand for cigarettes, Altria and other tobacco companies are seeking growth in cigarette alternatives — such as cigars, snuff and chewing tobacco — to keep customers.

In a presentation at a consumer analyst conference on Thursday, Altria’s Chief Executive Michael E. Szymanczyk said a significant number of consumers now switch between tobacco categories and use different kinds of tobacco products but offered no figures.

Altria said in recent years that cigarette volumes have declined by about 4 percent per year, while the smokeless tobacco segment has grown by about 7 percent per year. The company, which also sells Black & Mild cigars, said the machine-made large cigar category has grown about 3 percent per year.

In 2009, the industry estimates cigarette volumes fell about 8 percent, partly because of a 62-cents-per-pack federal tax increase that took effect in April and related price increases.

Still, smokeless tobacco is a small business compared with cigarettes, and smokers haven’t exactly embraced snus.

The nation’s tobacco companies made a collective $9.4 billion in profits last year for cigarettes, while profits for the smokeless segment, which includes snus, snuff and chewing tobacco, were about $1 billion, Szymanczyk said in the presentation. And there were an estimated 45 million adult smokers in the U.S. in 2008, compared with about 7 million smokeless tobacco users that year, according to figures from Altria’s Web site.

Last week, Greensboro, N.C.-based Lorillard Inc. announced that is was discontinuing a joint venture with Swedish Match for its Triumph Snus. Philip Morris USA had previously tested a smokeless, spitless tobacco product dubbed Taboka in 2006, which was later discontinued. It also had previously tested a Skoal-branded snus product that was discontinued.

Meanwhile, Winston-Salem, N.C.-based Reynolds American Inc. rolled out its Camel Snus product nationally last year, after testing the product since 2006, and has said the product has gained popularity.