Altria Smokeless Tobacco Sales Volume and Market Share

No vaping and no smoking sign. Source: Flickr

Altria (NYSE:MO), a Fortune 200 company, is on a mission to help cigarette smokers to transition to a smokeless future.

To do that, Altria has made several acquisitions and investments in recent years to expand its non-combustible or smokeless tobacco portfolio.

As of 1Q 2023, Altria, directly and indirectly, owns several businesses, including the following subsidiaries as well as agreements with others that Altria believes, will turn the company around from a stagnant to a growth-driven non-combustible focused conglomerate:

• New owner of NJOY Holdings, Inc. (NJOY) – a retailer of various e-vapor products which include the popular NJOY ACE,
• Completely acquired Helix Innovations LLC – maker of on! oral nicotine pouches,
• Owner of certain of JUUL’s heated tobacco intellectual property in JUUL LABS – the nation-leading e-vapor company,
• Exclusive U.S. license to commercialize Philips Morris International Inc’s IQOS products – the only heated tobacco product authorized by the U.S FDA.
• A significant stake in Cronos – a leading Canadian cannabinoid company
• A significant stake in Anheuser-Busch InBev – the world’s largest brewer

But just how successful has the company been in its transition to a smokeless tobacco endeavor?

To find out, in this article, we will look at Altria’s oral tobacco segment (previously known as the smokeless tobacco product segment).

The stuff that we are going to find out includes sales revenue, shipment volumes, and market share of popular smokeless products shipped under the oral tobacco segment.

Keep in mind that this article presents only the results of Altria’s oral tobacco product segment.

Investors who are interested in Altria’s other segments, such as the smokeable product segment may visit this page here – Altria Cigarette And Cigar Sales Volume And Market Share.

Let’s start with the following topics!

Altria’s Oral Tobacco Product Revenue By Year

Altria oral tobacco product revenue by year (click image to enlarge)

Altria’s oral tobacco segment revenue made up roughly 12% of the company’s total revenue in 2022, according to this article – Altria Revenue By Segment, Profitability, And Margin.

While this ratio may be small, it has been on the increase, according to the same article.

Nevertheless, Altria’s oral tobacco segment revenue presented in the chart above has been on a steady rise over the last 9 years.

As of 2022, the segment revenue reached $2.5 billion, one of the record highs, and was roughly in line with that reported in fiscal 2021.

However, for the 9-year period, the oral tobacco segment revenue has risen by 47% or roughly 6% per year between 2014 and 2022.

Altria’s Oral Tobacco Product Revenue By TTM

Altria oral tobacco product revenue by ttm (click image to enlarge)

On a TTM basis, Altria’s oral tobacco revenue is clearly on a rising trend and reached $2.5 billion as of 1Q 2023.

The 2023 Q1 result was roughly in line with that of the same quarter a year ago which represents a year-over-year growth rate of 0.5%.

Altria’s Oral Tobacco Product Shipment Volumes By Year

Altria oral tobacco product sales volumes by year (click image to enlarge)

In terms of shipment volumes, Altria shipped slightly fewer oral tobacco products in fiscal 2022 than in 2021.

Granted, Altria’s total oral tobacco product shipment volumes totaled 800.6 million cans and packs in 2022 compared to 820.3 million cans and packs reported in 2021.

On a long-term basis, Altria’s oral tobacco product shipment volumes have been on a decline between fiscal 2014 and 2022.

Altria’s oral tobacco product shipment volumes peaked at 853.5 million cans and packs reported in fiscal 2016.

Since then, Altria shipped considerably fewer smokeless tobacco products in subsequent years.

Compared to the figure reported in 2016, Altria’s 2022 sales volume result represents a decline of 6% for the 6-year period or roughly 1% per year on an annual basis.

Alria’s Oral Tobacco Product Shipment Volumes By TTM

Altria oral tobacco product sales volumes by ttm (click image to enlarge)

The TTM plot above clearly shows that Altria’s oral tobacco product shipment volumes have spiraled downward since 4Q17 and reached only 807 million cans and packs in 4Q19, a seemingly bottom since fiscal 2017.

Thereafter, Altria’s oral tobacco product shipment volumes recovered in the following quarters and seemed to have peaked at 824.6 million cans and packs reported in fiscal 2Q21.

As of 1Q 2023, the sales volume figure reached only 797.1 million cans and packs on a TTM basis, a record low since 2017.

The 2023 1Q TTM result was down 2% compared to that recorded a year ago.

Altria’s Copenhagen, Skoal, And on! Shipment Volumes By Year

Altria Copenhagen Skoal and On! sales volumes by year (click image to enlarge)

Altria’s Copenhagen makes up most of the company’s oral tobacco product sales volumes, at nearly 500 million cans and packs on an annual basis.

In fiscal 2022, Altria shipped 470.6 million cans and packs of Copenhagen, down 7% compared to the number reported a year ago.

Altria’s Copenhagen sales volumes seem to have peaked at 531 million cans and packs reported between fiscal 2016 and 2017.

Since then, Altria’s Copenhagen shipment volumes have been on a decline in subsequent years.

Altria’s Skoal comes in second in terms of sales volume, at roughly 200 million cans and packs per year.

However, in fiscal 2022, Altria shipped only 179.4 million cans and packs of Skoal, a new low over the past 9 years.

Also, Altria’s Skoal shipment volumes have been on a decline and were down 34% since 2014.

The third smallest product in terms of sales volume is Altria’s latest add-on, on!, a nicotine pouch.

While the shipment volumes have declined for both Copenhagen and Skoal, Altria’s on! seems to have defied the downtrend.

As seen, Altria’s on! sales volumes increased by a massive 70% to 82.5 million cans and packs in fiscal 2022 from a year ago.

Alria’s Copenhagen, Skoal, And on! Shipment Volumes By TTM

Altria Copenhagen, Skoal and On! sales volumes by ttm (click image to enlarge)

The TTM sales volumes of both Copenhagen and Skoal products have clearly been drifting lower since 2017.

Skoal’s result performed particularly worse when the reported shipment volume in 1Q 2023 was down by 9% year-on-year to only 176 million cans and packs while that of Copenhagen was down by 6% for the same period.

As of 1Q 2023, Altria’s Copenhagen shipment volumes reached 464.4 million cans and packs on a TTM basis, also a new low for this product segment.

In short, Altria has shipped considerably fewer Copenhagen and Skoal, its mainstream smokeless tobacco products, over the years.

Alria’s Percentage Of Copenhagen, Skoal, And on! Shipment Volumes

Altria percentage of Copenhagen, Skoal and On! sales volumes (click image to enlarge)

Altria’s Copenhagen contributes the biggest portion of sales volume, notably at more than 60% of the company’s total volume within the oral tobacco sector.

However, this figure seems to have peaked at 65% recorded in fiscal 2019 and has since been on a decline.

As of 2022, Altria’s Copenhagen sales volume made up only 59% of the company’s oral tobacco sales volume, still a sizable figure despite being a record low over the past several years.

A similar trend applies to Altria’s Skoal sales volume.

As seen, the percentage of Altria’s Skoal to total volume continued to slide and reached only 22.4% as of 2022, also a record low.

This figure has declined by more than 10 percentage points over the 9-year period, making Skoal a product with the worst performance within the smokeless tobacco sector.

On the flipped side, Altria’s latest product, on!, has emerged as a winner, with sales volume reported in 2022 reaching 10% of the company’s total volume within the oral tobacco product segment.

The 2022 ratio has nearly doubled over the 6% reported in 2021.

Alria’s Oral Tobacco Products Market Share

Altria market share for Copenhagen, Skoal and On! in the U.S. (click image to enlarge)

The retail market share numbers presented in the chart above are for sales volume performed in the U.S. only and they exclude international volume.

Granted, on a consolidated basis, Altria’s market share for oral tobacco products topped 46.4% as of 2022, down slightly from the 47.7% reported in fiscal 2021.

Over the last 9 years, Altria’s market share in the U.S. for oral tobacco products has been on a slide and was down from the 55% reported in 2014 to a record low of only 46.4% in 2022.

Altria’s Copenhagen, the largest product category within the oral tobacco segment, has a market share of roughly 27% in the U.S. as of 2022.

However, this figure seems to have peaked at 34.5% reported in 2018 and has since been on a decline since 2018, with the 2022 figure being the new low at only 27%.

Altria’s Skoal comes next after Copenhagen at a market share of 11.3% in the U.S. reported in 2022.

A similar downtrend applies to Skoal whose market share also has been on a slide and reached a record low as of 2022.

In contrast, Altria’s market share for on! in the U.S. has increased from 2.6% reported in 2021 to 5% reported in 2022.

Therefore, on! had been the only product within the oral tobacco sector that saw its market share growth in the U.S.

Summary

Despite a shrinking shipment volume in the oral tobacco product segment, Altria’s revenue in this product category continued to climb, driven primarily by higher pricing.

Altria has probably been raising prices across all oral tobacco products all these years.

Also, Altria’s ambition to transition to a smokeless tobacco company may still be a long way to go, considering that the size of the oral tobacco product segment represents only 12% of the company’s total volume as of 2022.

Moreover, shipment volumes have been relatively flat in recent years and have even gone lower for 2 of its most prominent smokeless tobacco products, Copenhagen and Skoal.

Altria has only started selling on! in fiscal 2021, its latest product add-on in the oral tobacco products segment, and it comprised only 10% of total sales volume as of 2022.

Other than sales volumes, Altria’s market share in the U.S. for Copenhagen and Skoal, 2 of its flagship oral tobacco products, also has gone down considerably over the years.

Therefore, Altria still has some work to do and the latest acquisition of NJOY Holdings, Inc. (NJOY) is the right direction toward a smokeless future.

References and Credits

1. All data presented in this article were referenced and obtained from Altria’s SEC filings, earnings releases, and financial statements which are available in Altria Investors Relations.

2. Featured images in this article are used under creative commons license and sourced from the following websites: Aaron Yoo and Mike Mozart.

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