Smokeless Tobacco’s Bright Outlook

By Howard Riell | April 19, 2023

Smokeless tobacco sales, buoyed by the spitless segment, are growing at c-stores as customers look for discreet smoking alternatives.

The convenience store channel saw the overall smokeless tobacco category record sales of $8.95 billion, up a respectable 4.9% for the 52 weeks ending Jan. 29, 2023, according to Chicago-based research firm IRI. Within that category, spitless tobacco proved the growth driver, registering sales of $1.9 billion, a whopping gain of 34.5%. At the same time, chewing tobacco/snuff notched sales of $7.03 billion, down 1.1%.

Trends show that more consumers are turning to nicotine pouches and lozenges, which contain not tobacco but nicotine, flavorings, sweeteners and plant-based fibers. Some of the leading brands include ZYN, On! and Velo.

“A rising number of smoking restrictions will further encourage tobacco consumers to explore smokeless options, and the introduction of new smokeless products will also spur demand,” said Corinne Gangloff, marketing manager for The Freedonia Group, a division of MarketResearch.com. “A growing preference for products that can be consumed discreetly will support demand for products in this category.”

“I would say that spitless tobacco will continue to grow in 2023, but whether it will be at the current rate is hard to determine,” said Hussein Yatim, vice president for Marlborough, Mass.-based Yatco Energy, which operates 18 stores in Massachusetts, Rhode Island and Connecticut. “As the cigarette tobacco category has shrunk in the recent couple of years, consumers have looked toward an alternative, and specifically a nicotine fix, that is discreet.”

Yatim pointed to poly-usage — using a combination of nicotine products, such as cigarettes and spitless tobacco — and promotions from manufacturers as two elements helping to boost sales of the category.

“Promotions help a tremendous amount in getting eyes on these products, and oftentimes offering a great retail price or promotional bonus,” he said.

He urged convenience store retailers to make full use of point-of-purchase signage and backbar headers — and to maximize facings — in their efforts to heighten product awareness.

Mark McCarty, director of category management for Clark’s Pump-n-Shop Inc., which operates nearly 70 c-stores across Kentucky, Ohio, West Virginia and Florida, also believes the smokeless category is set to grow in the year ahead.

“As there continue to be more restrictions in the workplace, as well as within municipalities in regard to smoking, more individuals are looking for a suitable alternative to cigarette usage,” McCarty said.

“As the unemployment numbers continue to drop, this also brings more people into the workforce, and in turn more customers looking for that alternative for use during work hours,” he added.

In the beginning, McCarty explained, spitless tobacco manufacturers were using aggressive single price points as well as free-can promotions to spur trial in the category.

“Now the manufacturers are doing more in the way of two-can or roll promotions to encourage multiple can purchases at a substantial savings over the single can purchase,” he said. “I have seen a lot of success with these promotions in our locations over the past year and have several more lined up in 2023.”

When it comes to leading brands, McCarty noted, ZYN leads the way in his locations, capturing more than 60% of the volume sold. He also pointed to On! and Rogue as strong selling options.

ZYN retails in his stores for $4.94, or two cans for $6.98. Rogue is priced at $5.39, or two cans for $7.98, while On! goes for $3.99, or two cans for $5.18, he said.

Bolstering consumer confidence that they will always find the brands they like and beneficial deals lends strong support to the spitless tobacco category.

“I believe that the key to selling more is having a home for the category, as well as continued promotions and signage,” McCarty insisted.

Clark’s Pump-n-Shop dedicates a two-foot section of the backbar at its c-stores to the smokeless category, ensuring there is ample space for each manufacturer.

“This lets the customer know that we are in the business of selling these items,” McCarty explained. “Signage is also a key in making the c-store customer aware of the two-can or roll promotions that offer them savings.”