The “All Other” segment
Reynolds American’s (RAI) 4Q15 revenue for its “All Other” operating segment increased 12.6% to ~$0.1 billion. RAI’s All Other operating segment includes:
- RJR Vapor, which manufactures and markets Vuse Digital Vapor Cigarette
- Niconovum USA and Niconovum AB, which manufacture and market nicotine replacement therapy gums under the Zonnic brand name
- SFR Tobacco International GmbH (or SFRTI), which distributes Natural American Spirit brand outside the US
Operating income for RAI’s All Other segment fell to 27.6% to $0.04 billion in 4Q15. However, the increase in revenue was driven by the continued strong performance of Vuse Digital Vapor Cigarette in 4Q15. Vuse is an e-cigarette produced by RAI’s subsidiary RJR Vapor. According to CEO Susan Cameron, the brand’s additional four styles that were introduced in September have been well received by adult tobacco consumers.
E-vapor versus peers
In an attempt to meet the growing demand for e-vapor cigarettes, many tobacco competitors also have a presence in the e-cigarette market. As a result, Philip Morris International (PM) is exclusively licensed to commercialize Altria Group’s (MO) MarkTen e-vapor internationally. To learn more, please read Altria’s Nu Mark Subsidiary: Innovation in Tobacco Products. Other companies like British American Tobacco (BTI) and Vector Group (VGR) also sell e-cigarettes.
The company’s focus is to provide adult consumers a vapor experience that delivers performance and satisfaction with the simplicity of a cig-a-like. For example, RAI has introductions lined up for Vuse like Vuse Connect, Vuse Fob, Vuse Port, and Vuse Pro, which will be introduced online starting next month and later this year.
In addition, the Niconovum subsidiary remains focused on the national distribution of Zonnic gum. Zonnic is now in more than 31,000 retail outlets.
Reynolds American makes up 0.2%[1. Updated on February 12, 2016] of the iShares Russell 1000 ETF (IWB).