By Richard Craver | Journal Reporter
Published: April 20, 2009
Reynolds American Inc.'s bid to make Camel a comprehensive tobacco brand has placed the manufacturer between the cheek and gum of users.
The company will launch Camel Dip, a premium moist smokeless product, in test markets in Colorado and Florida beginning in mid-June.
Camel Dip will be distributed through Reynolds' Conwood Co. subsidiary, making it the first time that the manufacturer has marketed a Camel product outside R.J. Reynolds Tobacco Co.
Camel Dip, which is expected to sell at retail for $4.50 to $5 a tin, will compete with Conwood's Kodiak and Philip Morris USA's Copenhagen and Skoal brands. It will make its debut in two styles -- Dark Milled, a traditional, fine-cut product, and Wintergreen Wide Cut.
David Howard, a spokesman for Reynolds, said that Reynolds is not worried about hurting its Kodiak sales with the Camel brand expansion.
"We're introducing another high-quality product through an iconic brand name into a definite growth category for the company and in the industry," Howard said.
It is the latest smokeless spinoff for Camel, which includes a snus product in national distribution and three dissolvable smokeless products in test markets -- a pellet (Camel Orbs), a twisted stick the size of a toothpick (Camel Sticks) and a film strip for the tongue (Camel Strips).
It also represents another potential major rival in the increasingly competitive moist smokeless category.
Skoal, Copenhagen and Grizzly all have between 22 percent and 24 percent U.S. market share, according to Bill Godshall, the executive director of SmokeFree Pennsylvania. Godshall is an outspoken advocate of noncombustible tobacco products as a reduced-risk option for smokers.
Reynolds is staking its future on smokeless tobacco products, investing resources into innovation and pushing hard for language creating a niche for tobacco products with potential reduced health risk in any potential federal regulation of the industry.
Smoking bans and health concerns have led to declines in cigarettes of between 3 percent and 4 percent a year. By comparison, smokeless-tobacco sales are growing by about 4.5 percent a year.
"If marketed to smokers, Camel Dip will benefit public health since smokefree tobacco products are far less hazardous alternatives to cigarettes, and there's no secondhand smoke," Godshall said.
However, other anti-smoking activists oppose marketing smokeless tobacco under cigarette brand names. They view smokeless products as a gateway to cigarettes, particularly for youth.
Tommy Payne, the executive vice president of public affairs for Reynolds, said that Reynolds is not rushing smokeless products to market to beat potential FDA regulation.
"The devil is in the details regarding how smokeless innovation would be handled in the House bill," Payne said. He said that there is a different standard for new-to-the-marketplace products compared with the introduction of products similar to those already available.
Expanding the Camel brand into moist snuff is a calculated risk for Reynolds, said Stephen Pope, the chief global-market strategist with Cantor Fitzgerald Europe.
"If Camel Dip is really dip, and not snus, an unwelcome side effect is that the use of dip is often related to spitting, which is not a pleasant habit," Pope said. "There could be a backlash of adverse publicity against the Camel name if the Dip products lead to this behavior."
â– Richard Craver can be reached at 727-7376 or at rcraver@wsjournal.com.
