Technically, nothing because they’re not tobacco. And by legal definition, they aren’t cigarettes either. But the pending removal of menthol tobacco cigarettes from c-store shelves, in contrast to smokers’ stated loyalty to menthol taste and calm, indicate that tobacco-free menthols will get a lot of trial when the flavor ban is enforced.
Combine this with black market issues and the loss of sales already created by state bans, and it adds up to a nice opportunity for c-stores. Selling a legal, non-addictive filtered smoke can satisfy a decent percentage of menthol smokers and put some money in the register at the same time.
In a 2023 national menthol smoker survey conducted by California-based QAR Research, menthol taste and feeling were ranked more than twice as important as nicotine. Follow-up consumer response to hundreds of trial packs of non-tobacco menthols not only favored the similarities in taste and smoothness, but also showed that part of what they believed was nicotine “buzz” turned out to be the neurological calming effect of menthol.
Some 56% of menthol smokers who smoked a trial pack said they’d buy it when their brand was removed.
The Backbar Isn’t Going to Look Like Analysts Think
The Food & Drug Administration (FDA) delays caused by legal reviews and election politics have created another 12 to 16 months for marketers of non-nicotine smokes to bring fully researched, better tasting products to the c-store shelves. Smoker health concerns are increasing as a motive for alternatives to tobacco. It’s also about personal control by moving on from nicotine to non-addictive solutions without giving up the flavor they enjoy.
Tobacco industry analysts and sales consultants continue to focus on oral nicotine and vape products as the most marketable alternatives. Nicotine is what’s worked so far, and that’s what the FDA has given them. But from a consumer standpoint, there’s more experimenting, more choices and new solutions to slow their daily pace for a few moments.
Cigarette brand loyalty is eroding as smokers try alternative sources of nicotine and fourth-tier cigarettes. More changes will come as the FDA continues its efforts to stamp out flavors. A federal cap on nicotine will eventually extend to oral nicotine and vape. Then what? The increased cost of a pack of cigarettes keeps pushing the decline in overall tobacco sections sales. Reduced brand loyalties open the door to new ideas.
Consumers Are Looking Beyond Nicotine
Many alternatives coming to market don’t need to wait on the FDA. They include botanical and hemp-based filtered smokes, cannabis chewables, menthol vape, CBD in a dozen different forms, and marginal THC (tetrahydrocannabinol) products like Delta 8. Almost all are flavored. None of them require federal excise tax.
More are coming to c-store shelves every month. Much of this is the unintended response to the FDA’s flavor ban. Smokers still want menthol.
New Splash nicotine-free Menthol Smokes will be at the 2024 NACS show for limited markets (read California and Massachusetts), affording them a compelling trial market for the rest of the country. New Versa hemp menthols are out in filtered and tipped format as well as smokeless. Global Tobacco’s Step non-tobacco cigarettes are on the market in limited areas. R.J. Reynolds Vape Co. is launching nicotine-free vape. NJOY is launching menthol e-cigs.
C-stores should be delighted to have legal nicotine-free menthol smokes on their shelves. If California is the future, hundreds of millions of menthol smokers’ dollars will stop coming in their doors. Instead, they’ll be finding their way directly to consumers across borders, or smuggled under thousands of unenforceable counter locations.
What Do Menthol Smokers Want?
Here are five reasons why nicotine-free menthol smokes will provide a sustainable, profitable segment for c-stores:
1. It’s all about the menthol. After hundreds of trial packs, the nicotine-free taste of new Splash menthols was rated as close as smokers will find to their current menthol.
2. Trial purchase will be big. Around 9 million menthol smokers will find their brands are gone with nicotine-free smokes in their place. And there will be several to choose from.
3. They’re legal. No tobacco, nicotine, hemp or CBD. No under the counter sales; not as many lost customers.
4. Nicotine resistance for around 25% of menthol smokers is strong enough that they can enjoy Splash as much as tobacco. In fact, 18% of trial smokers said they were “glad the nicotine was gone.”
5. There’s no federal excise tax. They’ll be a welcome value for smokers with plenty of bottom line left for the c-store operator.
Nicotine-Free Alternatives Will Keep Backbar Interesting
Viewed from a category analysts’ standpoint of impact on the tobacco backbar, oral nicotine, vape and other nicotine alternatives should shape the planogram. But viewed from a menthol consumer’s wants and wishes, nicotine-free will become a lot more attractive when their tobacco brand is gone.
The retail decision will be whether to shrink or broaden the choices on the backbar. New Menthol vape and pouches are on the way, but they leave a pretty large void for people who still want the experience of lighting up and dedicating an undisturbed moment to relaxation.
Afterthoughts
As the FDA brings its keys to lock the door, nicotine-free is just emerging in trial markets and defining itself as a viable flavor segment. It’s not on the radar screen of analysts yet, and retailers need to get over the idea of “herbal.”
As soon as shelf facings open, menthol and flavors will regain share in new forms. Smokers aren’t going to stop liking them because the FDA says so. The volume will only be a percentage of what it was before, but the volume of nicotine-free trial packs after smokers find their menthol brand is gone, may be enough to take a billion or so dollars away from smugglers.
John Geoghegan has spent the last 30 years in the tobacco business, including vice president strategic planning at General Cigar Co., U.S. manager for DjEEP Lighters, head of marketing for Kretek International Inc. and manager of LaMirada Cigar Co. He began his career 57 years ago at Procter & Gamble. Geoghegan is a graduate of the University of Cincinnati. He lives in Laguna Niguel, Calif.
