Camel Dip Dynamics

Reynolds American refocusing product, pulling back in all states but Arizona

Published in CSP Daily News

By
Greg Lindenberg, Online Editor

WINSTON-SALEM, N.C. -- On Wednesday, Reynolds American Inc. notified the trade that Camel Dip would be discontinued in 11 of the 12 states the brand was launched into, according to a research note by UBS Securities LLC analyst Nik Modi. The product will remain stocked in Arizona. The company indicated that it will be shifting its focus back towards Grizzly, according to Modi.

The product was growing strongly through the pipeline fill phase (launched in third-quarter 2009), but growth "severely decelerated in the most recent period to 10%," Modi wrote.

"First and foremost, [image-nocss] we are not pulling [Camel Dip] out," R.J. Reynolds Tobacco and American Snuff spokesperson David Howard told CSP Daily News. "What we are doing is focusing our efforts on it."

He said, "Response has been good--but with all of the dynamics externally with the [Food & Drug Administration]...as well as a change this year in our trade marketing organization, where American Snuff Trade Marketing came into R.J. Reynolds with a contract agreement...where we now have one, unified trade marketing force...we just decided to scale things back a little bit on Camel Dip while we refocus efforts and get things in order."
In making these changes, the company decided to keep Camel Dip in its one lead market--the state of Arizona.

Howard added, "We think we have a very good proposition with Camel Dip. The response that we've gotten in earlier lead markets to the product packaging was very positive. We made the business decision that while all of these changing dynamics were going on...we decided to have more focused efforts for the time being."Reynolds American rolled out Camel Dip in June 2009, available in two styles: Dark Milled, a traditional, fine cut product, and Wintergreen Wide Cut. ( Click here for previous CSP Daily News coverage.)

Conwood Co. LLC changed its name to American Snuff Co. LLC, effective Jan. 1, 2010. ( Click here for previous coverage.)

Winston-Salem, N.C.-based Reynolds American is the parent company of R.J. Reynolds Tobacco.; American Snuff; Santa Fe Natural Tobacco Co. Inc.; and Niconovum AB.

R.J. Reynolds Tobacco is the second-largest U.S. tobacco company. The company's brands include five of the 10 best-selling cigarettes in the United States: Camel, Pall Mall, Winston, Doral and Kool. American Snuff s the nation's second-largest manufacturer of smokeless tobacco products. Its leading brands are Kodiak, Grizzly and Levi Garrett. American Snuff also sells and distributes a variety of tobacco products manufactured by Lane Ltd., including Winchester and Captain Black little cigars and Bugler roll-your-own tobacco. Santa Fe Natural Tobacco manufactures Natural American Spirit cigarettes and other additive-free tobacco products, and manages and markets other super-premium brands. Niconovum markets innovative nicotine replacement therapy products in Sweden and Denmark under the Zonnic brand.