Spotlight on: Smokey Mountain: as the tobacco industry feels pressure, Smokey Mountain's tobacco free smokeless products are poised for continued growth.
"Years ago retailers thought we were a category killer and they did not carry tobacco-free smokeless products," he says. "Now I think that most of them understand that we are a category extender, meaning that there is always a percentage of consumers who are looking to reduce consumption of smokeless tobacco, chewing tobacco or snus products. They use Smokey Mountain for that purpose. Without us, they would not be purchasing anything, so we are keeping dollars in the category."
Today, Smokey Mountain offers nine SKUs, including seven snuff flavors: wintergreen, classic, straight, arctic mint, cherry, peach and grape. The company also offers two pouches in arctic mint and wintergreen flavors. The products, which are nicotine- and tobacco-free, are premium-positioned, with prices ranging from $2.99 to $3.49 each.
"We have found a very nice niche in the marketplace and I believe it has helped retailers make more money from the tobacco category," Savoca adds. "Because we are a tobacco-free product, we are not subject to taxes on tobacco or any kind of advertising ban. That allows us to be more affordable to consumers and lets us get our message out to them."
Retailers have to help, he stresses. The herbal snuff segment should be placed in a visible location with easy access to adult consumers, preferably near tobacco items--sort of like non-alcoholic beer being located near alcoholic beer.
However, Savoca says that retailers need to emphasize one brand in the category and, obviously, thinks that Smokey Mountain Herbal Snuff stands out in a crowd. "No one else supports their brand like we do and it shows in the fact that we are growing at a rate that is nine times faster than our nearest competitor," he says. "We have a national television campaign and national radio through ESPN, NFL and NASCAR radio. We also gain a ton of exposure from Hall of Fame football player Randy White, Hall of Fame wrestler Shawn Michaels and baseball legend Chipper Jones. Additionally, being a primary sponsor in NASCAR for veteran drivers Ron Hornaday and Johnny Sauter has really helped build the brand in key markets.
Of course, Smokey Mountain was not always at the top of the ladder. The company was formed in 1985 as a direct-to-consumer manufacturer of herbal snuff. By 2000 things were not going too well. Savoca says that the company was on the verge of bankruptcy and was getting a very cold response from retailers. "Bob Bantle, Dan Calandro and I, all ex-UST employees, thought the brand had potential. So, along with Dick Hunsberger, we developed a recapitalization plan and decided to take on the challenge of turning the company and brand around."
It was not easy. Savoca says that management paid extremely close attention to both top-line growth and bottom-line profits. They took a long, hard look at the product line and made improvements where necessary, including repositioning the brand and developing stronger ties to the trade. Perhaps most importantly, Savoca says the company simplified the message to adult consumers, paying very close attention to attracting the right consumers to the brand.
"Back in 2000 we did a roadshow to drum up interest in our product, he says. We presented our brand, our plan, and asked retailers and distributors to keep an eye on us for the next six months. If they liked the direction we were headed, we asked them to consider our brand. Slowly but surely we started to gain distribution. There are some distributors and retailers who took a chance on us, and I will always be very grateful to them. They know who they are."
That commitment to quality may have made the difference. "We keyed in on the taste and made sure that it was similar to the leading smokeless tobacco brands," Savoca notes. "We developed the tagline: Smokey Mountain Herbal Snuff Great Taste, Tobacco-Free. We also pounded on our point-ofdifference, which is that we are America's original tobacco-free smokeless brand. That is something that cannot be copied."
Savoca is excited about the future and the company is fully prepared to make the right investments to make sure things keep going well. "The last five years have been great for us, not only as a company but as a category," he says. "We have made a commitment to reinvest in our marketing program and to continue to create incremental sales for our retail partners."
It does not hurt Smokey Mountain that the tobacco category, as a whole, continues to be under tremendous pressure. "Our future is very bright. We see continued growth, perhaps at an even faster rate," Savoca adds. "It is tough to be a tobacco consumer these days and we offer these adult consumers an alternative. Our retailers and distributors trust us and know we support our brand. Put that together and it is the makings of a great future.
"Am I confident about our brand? The answer is absolutely yes. Confident, but not cocky."
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|Title Annotation:||UPFRONT: Profiles|
|Date:||May 1, 2015|
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