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While smokeless products represented just 6% of all tobacco sales in 2009, the market is growing at a rate of about 7% a year. Sales of smokeless tobacco products in 2010 are expected to total about $4.8 billion, according to research firm Morningstar Inc. in Chicago, which calculated that figure based on a year-over-year growth rate of 7%.
One of the reasons for the uptick is that “now you can consume products without anybody else being aware of it,[link widoczny dla zalogowanych],” said Phil Gorham, a Morningstar analyst who follows the tobacco industry. He also said economic factors are driving people to quit or to switch to smokeless products. “We’ve had a big tax increase both on the federal and state level on cigarettes, and it’s becoming more expensive to smoke in some states,[link widoczny dla zalogowanych],” he said.
At one retailer in Chicago, a pack of Marlboro was $10, with state, county and city excise taxes included, whereas a can of premium Swedish snus was $5.27 after taxes. Chuck Levy, owner of Iwan Ries & Co., a fifth-generation family-owned tobacco purveyor in Chicago that’s home to one of the city’s only surviving legal smoking lounges, said he used to carry Marlboro and Camel Snus. But he said they didn’t sell as well as General Snus, a popular Swedish brand. “We sell it to young people, old people. They come in suits as well as jeans,” he said.
With smoking bans in place, Levy said, many are looking for a replacement that can also give them the oral sensation they get from smoking. Creamy snuff are tobacco paste, consisting of tobacco, clove oil,[link widoczny dla zalogowanych], glycerin,[link widoczny dla zalogowanych], spearmint, menthol, and camphor, and sold in a toothpaste tube. It is marketed mainly to women in India, and is known by the brand names Ipco, Denobac,[link widoczny dla zalogowanych], Tona, Ganesh. It is locally known as “mishri” in some parts of Maharashtra. A legislation recently introduced to Kenyan Parliament has dimmed the performance forecast for local tobacco companies,[link widoczny dla zalogowanych], prompting British American Tobacco (BAT), the largest cigarette maker in the country, to reduce its earnings outlook for next fiscal year.