Altria looks to capture different tobacco consumers with new products

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Currently many cigarette smokers are getting more interested in trying various tobacco products besides cigarettes, than previous generations of smokers, and Altria Group Inc, parent company of the largest cigarette maker, Philip Morris USA, is looking on their recently-launched products to lure customers who are open to new products, according to the company.

Marlboro Black cigarette

The corporation, best-known for marketing the iconic Marlboro cigarettes, as well supported its profit forecast, published in January.

Altria, which also markets Copehnagen and Scoal smoke-free tobacco products and Black & Mild cigars, has witnessed a change in tobacco consumption patterns in the USA. Whereas the rate of cigar and cigarette smokers has been virtually unchanged, the consumption of smokeless tobacco has been growing.
Nevertheless, Marlboro – with roughly 42 percent share of the U.S. cigarette market – remains the leading brand in the group’s portfolio.

At the same time, many smokers have admitted to be trying new “reduced-risk” tobacco products, like snus and other smoke-free tobacco, due to health growing concerns and social stigma.

Altria is delighted by the recent performance of its latest Marlboro Black brand, the company’s Vice Chairman Dave Beran said during the annual Consumer Analyst Group of New York (CAGNY) meeting in Florida.

Marlboro Black, which was launched to the market by Philip Morris USA last December, gained 1 percent market share by February, according to Beran, who will be appointed Altria’s president in May.

The latest extension of Marlboro brand family is, according to the company’s press release, is a bold, innovative spin of the classic brand, packaged in black packs, and available in menthol and regular-flavored styles.

Marlboro accounted for 42 percent of the retail market in 2011, dropping 0.6 points compared to 2010. Marlboro is the most popular cigarette brand in the United States, yet, still deals with continuous decline, as well as almost all cigarettes across the country.

Altria stated it has not found any significant shift in the mix of low cost and premium brands.

There has been reported some fluctuation among price-sensitive consumers, who are looking for promotions, and shift between various low-cost and mid-value brands, but smokers who prefer premium brands, tend to be loyal, Mike Szymanczyk, Altria Chairman and CEO said.

Nearly 90 percent of all adult Marlboro smokers purchase only this brand, according to the survey carried out by the company.

Altria as well forecasted adjusted earnings to go up by nearly 9 percent in 2012, equaling $2.23 per share, the group reported last week.

In the long run, the company still intends to deliver annual growth in adjusted diluted earnings of 5 to 9 percent.

Mike Szymanczyk confirmed in January his plans on retirement in May, and said he is likely to be succeeded by Marty Barrington.

Altria shares went up by 0.3 percent at $29.71 last week.

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