After the Food and Drug Administration (FDA) outlined its proposed rules to ban menthol cigarettes and characterizing flavors in cigars last month, all eyes are turning to cigarettes and cigars, allowing smokeless tobacco to fly under the radar.
Smokeless tobacco has so far remained unscathed by FDA flavor bans. However, some state and local legislatures increasingly have smokeless in their crosshairs as they push ordinances banning tobacco flavors.
But for now, smokeless sales are trending upward at convenience stores as rising interest in nicotine pouches continues to buoy the category.
Smokeless tobacco dollar sales rose 3.7% to $8.72 billion for the 52 weeks ending April 17, 2022, with unit sales flat (up 0.2%) at 1.41 billion. Dollar sales of chewing tobacco/snuff dipped 1.5% to $7.17 billion, with unit sales down 8.1%. Spitless tobacco dollar sales climbed 36.9% to $1.54 billion, with unit sales up 44.2% for the period.
For the four weeks ending April 17, 2022, smokeless dollar sales grew 2.2%, while units dipped 1%. Chewing tobacco/snuff dipped 3.3%, with unit sales down 9.7%. Spitless dollar sales grew 31.9%, with unit sales up 34.6%.
“Moist smokeless tobacco (MST) continues to dominate the smokeless category even as volumes continue a slight decline and the shift to nicotine pouch/spitless continues,” said Tim Greene, director of tobacco and general merchandise for Boulder, Colo.-based The Cigarette Store Corp., dba Smoker Friendly, which owns and operates 180 locations in eight states.
Greene expects the trend toward nicotine pouches and spitless tobacco to continue throughout 2022. When it comes to MST, Greene expects to continue to see natural and wintergreen SKUs dominate the category.
“…Value brands continue to take market share from premium,” he said.
Smoker Friendly hasn’t made any major changes to the MST category at its stores this year. “We continue to work manufacturers’ programs to offer our customers the best possible value,” Greene said. “We have, however, expanded our nicotine pouch offerings in strategic markets where volumes warrant additional offerings.”
C-store retailers can rest assured that the FDA won’t be targeting smokeless tobacco anytime soon.
“The FDA’s proposed tobacco product standard regulations regarding a ban on menthol in cigarettes and flavors in cigars do not mention or refer to any future possible regulatory action on smokeless tobacco products,” said Thomas Briant, executive director of the National Association of Tobacco Outlets (NATO). “The FDA has requested comments on whether the proposed regulations prohibiting the use of characterizing flavors in cigars should be expanded to also include traditional pipe tobacco and hookah/water pipe tobacco. However, there is no reference to smokeless tobacco in the proposed regulations.”
But while the FDA might not be targeting smokeless tobacco in the near future, states and cities are already pushing legislation targeting smokeless products.
“The immediate concern regarding menthol or any flavored offerings is at the local and state level where we continue to see proposed flavor bans,” Greene said.
“The number of state legislatures that are considering total flavored tobacco product bans is increasing,” Briant agreed.
For example, the San Diego City Council on April 25, 2022, passed an ordinance to ban the sale of flavored tobacco products in the city as of Jan. 1, 2023. The state of California is set to vote on the California Flavored Tobacco Products Ban Referendum on the Nov. 8, 2022, ballot. The bill is a veto referendum that looks to overturn Senate Bill 793, which was signed into law on Aug. 28, 2020, banning the sale of flavored tobacco products.
Colorado’s House Bill 1064 looks to ban the sale and distribution of all flavored tobacco products and nicotine products in the state. Hawaii Senate Bill 3118, which bans the sale of flavored tobacco products, passed the Senate Health Committee in February. In Illinois, Senate Bill 3854, which aims to ban the sale of all flavored tobacco products and vapor products, including menthol, mint and wintergreen, is under consideration.
“The trend in banning the sale of all legal flavored tobacco products began on the local level and has now migrated to the state level,” Briant said. “Generally, the main focus of such bans is on youth usage of flavored electronic cigarette/vapor products and is then expanded to include all flavored tobacco products despite the fact that underage use of traditional tobacco products is at historic lows and continues to decline.”
C-store retailers are encouraged to become active in their local legislature and speak with their representatives about how such ordinances impact business.