July 5th, 2011
Firing Up Tobacco Sales—Without the Smoke
The Wall Street Journal
As cigarette smoking continues to decline in the U.S., Reynolds American Inc. Chief Executive Daniel Delen wants Americans to consider new ways to consume tobacco.
Reynolds, the maker of Camel and Pall Mall smokes, is trying to shift its consumers to its smokeless brands, including moist snuff and Swedish-style snus, a type of spitless oral tobacco that comes in pouches. The company is about to have some new competition in that market. Last month, smokeless-tobacco giant Swedish Match AB, the dominant maker of snus in Scandinavia, announced plans to begin a major push into the category in the U.S. in coming months.
Reynolds can’t easily market the smokeless products as less-harmful alternatives to cigarettes. Federal law bars tobacco makers from making such claims unless they can furnish scientific evidence that a product would both reduce risk for individuals and provide a net benefit to the nation’s health.
Reynolds’s efforts to become less dependent on cigarette sales began under Mr. Delen’s predecessor, Susan Ivey, who was responsible for turning around the company after years of sales declines and market-share losses. Mr. Delen, 45 years old, worked with Ms. Ivey for years and had a hand in her success, running Reynolds’s main cigarette unit until he was tapped to replace her in March following her retirement. Winston-Salem, N.C.-based Reynolds ranks a distant No. 2 in the U.S. by sales after Altria Group Inc., maker of Marlboro.
Mr. Delen has smoked since he was 28, but now mostly uses Camel Snus, he says. He recently spoke to The Wall Street Journal about smokeless tobacco, regulatory challenges and what keeps him up at night.
Read more: http://online.wsj.com/article/SB10001424052702303499204576389991381714016.html