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UNITED STATES

UST could end test of Revel brand by year end

19 Jun 2006. The impending launch of Skoal Dry smokeless tobacco pouches is likely to spell the end of UST's five-year experiment with Revel, a similar product, UST's president and chief operating officer said on Tuesday.

"I do think Skoal Dry is the wave of the future," Murray Kessler said at the Reuters Consumer and Retail Summit in New York.
UST is launching Skoal Dry in the in the next two to three weeks in Austin, Texas - head-to-head with Camel Snus, a similar product being introduced by Reynolds American. UST will also test its product in a second market, Louisville, Kentucky, where it will not have competition.
The new smokeless, spitless pouches are part of an effort by UST and others in the tobacco industry to come up with products that overcome the social stigma and mess of chewing tobacco. Altria Group's Philip Morris USA unit, the largest US cigarette maker, plans to launch its own pouch, called Taboka, later this year.
UST's strategy to grow its business has been to try to convert adult smokers to smokeless tobacco. But nine out of ten smokers who try smokeless still reject the product, Kessler said.
Skoal Dry is one way to try to come up with a product smokers will switch to, he said.
"There's a market there and collectively or individually, one of us is going to get it right and it's going to be big business," Kessler said. Skoal Dry uses a bigger pouch than Revel and uses a new technology to coat each bit of tobacco with additional flavor, Kessler said.
UST first launched Revel in 2001. At that time, Kessler has said, he did not think the Skoal name could be used to convert smokers to smokeless. But with Revel, the company faced the twin hurdles of introducing an unfamiliar product and doing it with a name that had no familiarity to consumers. Kessler said results from Skoal Dry test marketing should determine the fate of Revel in the next six months. He would not say how much UST spent on developing and marketing Revel, but stressed that the money was not wasted. (pi)