Santa Fe’s volume growth
Reynolds American’s (RAI) Santa Fe Natural Tobacco Company’s Natural American Spirit brand aligns with consumers seeking authentic products. The company notes that Natural American Spirit brand is made of natural, additive-free tobacco. Natural American Spirit is a super-premium, undiscounted brand, which helped Santa Fe’s volume growth in 1Q16 rise above 20%.
Among the other tobacco companies, Vector Group (VGR) and Altria Group (MO) do not produce additive-free tobacco cigarettes. Despite consumers being aware of the Natural American Spirit brand, less than 30% of adult consumers understand the brand’s proposition of environment-friendly products.
According to the company’s chief operating officer, Debra Ann Crew, Natural American Spirit ranks as the number seven cigarette brand in the US.
Initiatives for awareness
Reynolds American (RAI) continues to focus on the expansion of Natural American Spirit increasing its retail distribution in the US, as well as outside the US. As a result, RAI successfully completed the sale of the Natural American Spirit brand’s international rights to Japan Tobacco (JAPAY) (JAPAF) for $5 billion.
RAI also started a direct mail campaign focused on direct communications with adult smokers, addressing the distinctive taste of Natural American Spirit. This increased communications by 30% in 1Q16, resulting in improving the brand education of its adult smokers.
In addition, the brand acknowledges Earth Day and participates in cigarette litter prevention activities to communicate its earth-friendly business practices. This helped the double-digit organic growth of the brand.
According to Crew, American Snuff’s Grizzly brand is the top moist snuff brand in the US. The brand’s four-week Pack a Better Pouch, Pick a Better Prize promotion held on Grizzly.com doubled its number of adult consumers in February 2016, which was up by 50% from 2015. Grizzly experiences 10 million website page views from digital interactions.
In the next part of this series, we will discuss the FDA’s regulations for the innovation of vapor products.