R.J. Reynolds Tobacco Co., the second-largest tobacco company in the U.S., intends to extend the current growth in Pall Mall cigarette sales by adding more menthol variants.
The cigarette group has launched Pall Mall Black and Pall Mall White to complete its standard menthol style, Pall Mall Green.
Richard Smith, Reynolds spokesman, said that the black style provides “a full-flavor tobacco blend,” but the white style “has a smoother tobacco blend.”
Smith said that the new cigarette styles are being launched be degrees. The national distribution of these cigarettes is planned to occur by October.
Smith said that the tobacco company is introducing more menthol styles to show the national category growth and a change in smoker preferences.
Smith said that Reynolds considers that Pall Mall is the right product as the ailing economy still affect adult cigarette consumer spending. Smith added that the company is showing rising rates of trial and increasing rates of change and sticking with the brand.
According to the Federal Trade Commission’s latest, the demand on menthol cigarettes have decreased in recent times, from 27% of all cigarettes in 2008 to 22% in 2010.
Bill Godshall, executive director of SmokeFree Pennsylvania, said that these new menthol cigarettes are focused to be sold to price-sensitive smokers of higher-priced menthol brands.
The tobacco company believes that the new Pall Mall menthol cigarettes will gain growth for the US’s No. 3 cigarette brand after only Philip Morris USA’s Marlboro and Lorillard Inc.’s Newport.
Pall Mall not only has replaced Camel as Reynolds’ top brand, but also weakened Marlboro’s grip on market share.
Philip Morris as well has expanded the trading of Marlboro Special Blends, the cheaper version of Marlboro. Discount rivals also have taken aim at Pall Mall by reducing prices.
As a result, Pall Mall’s market share reduced 0.2 percentage point from the first to second quarter to 8.4%. Its volume decreased 0.2% to 5.6 billion cigarettes compared with a previous year.
Pall Mall had a 1.95% market share when Reynolds increased it to a growth brand in 2006.
Bonnie Herzog, a Wells Fargo Securities analyst, said that although the company considers Pall Mall still satisfy value-seeking consumers, the cigarette brand is not safe to competitive pressures and, therefore, they are projecting a slowdown in the brand’s growth.
Pat Shehan, owner of Tarheel Tobacco in Winston-Salem, said the marketing will attract smoking people to Pall Mall and Marlboro Special Blends.
Shehan said that he considers smokers prefer a national brand and the tobacco companies are pricing their cartons to put some brands back in their range.