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INDUSTRY PROFILE

Tobacco in the United States
Reference Code: 0072-0817 Publication Date: October 2011

www.datamonitor.com
Datamonitor USA 245 Fifth Avenue 4th Floor New York, NY 10016 USA t: +1 212 686 7400 f: +1 212 686 2626 e: usinfo@datamonitor.com Datamonitor Europe 119 Farringdon Road London EC1R 3DA United Kingdom t: +44 20 7551 9000 f: +44 20 7675 7500 e: eurinfo@datamonitor.com Datamonitor Middle East and North Africa Datamonitor PO Box 24893 Dubai, UAE t: +49 69 9754 4517 f: +49 69 9754 4900 e: datamonitormena@ datamonitor.com Datamonitor Asia Pacific Level 46, 2 Park Street Sydney, NSW 2000 Australia

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United States - Tobacco
© Datamonitor. This profile is a licensed product and is not to be photocopied

0072 - 0817 - 2010 Page 1

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY
Market value
The United States tobacco market grew by 2.2% in 2010 to reach a value of $95,599.9 million.

Market value forecast
In 2015, the United States tobacco market is forecast to have a value of $106,282.5 million, an increase of 11.2% since 2010.

Market segmentation I
Cigarettes is the largest segment of the tobacco market in the United States, accounting for 91.9% of the market's total value.

Market segmentation II
The United States accounts for 13.3% of the global tobacco market value.

Market share
Altria Group, Inc. is the leading player in the United States tobacco market, generating a 53.4% share of the market's value.

Market rivalry
The US tobacco market is highly concentrated, with the top three players collectively accounting for 90% of the total market value.

United States - Tobacco
© Datamonitor. This profile is a licensed product and is not to be photocopied

0072 - 0817 - 2010 Page 2

CONTENTS

TABLE OF CONTENTS
EXECUTIVE SUMMARY MARKET OVERVIEW Market definition Research highlights Market analysis MARKET VALUE MARKET SEGMENTATION I MARKET SEGMENTATION II MARKET SHARE FIVE FORCES ANALYSIS Summary Buyer power Supplier power New entrants Substitutes Rivalry LEADING COMPANIES Altria Group, Inc. Reynolds American Inc. Lorillard, Inc. MARKET DISTRIBUTION MARKET FORECASTS Market value forecast MACROECONOMIC INDICATORS APPENDIX Methodology Industry associations Related Datamonitor research
United States - Tobacco
© Datamonitor. This profile is a licensed product and is not to be photocopied

2 7 7 8 9 10 11 12 13 14 14 15 16 17 18 19 20 20 24 28 31 32 32 33 35 35 36 36
0072 - 0817 - 2010 Page 3

CONTENTS

Disclaimer ABOUT DATAMONITOR Premium Reports Summary Reports Datamonitor consulting

38 39 39 39 39

United States - Tobacco
© Datamonitor. This profile is a licensed product and is not to be photocopied

0072 - 0817 - 2010 Page 4

: key facts Altria Group.: key financials ($) Reynolds American Inc. 2006–10 United States inflation. 2006–10 United States exchange rate.: key financials ($) Lorillard. Inc. 2006–10(e) United States tobacco market segmentation I:% share. by value.0817 . by value. Inc.2010 Page 5 .: key financial ratios United States tobacco market distribution: % share.: key financial ratios Lorillard.: key facts Reynolds American Inc.: key facts Lorillard. 2006–10 United States consumer price index (absolute).Tobacco © Datamonitor. Inc. by value. Inc. Inc. This profile is a licensed product and is not to be photocopied 0072 . by value. 2010(e) United States tobacco market value forecast: $ million.: key financials ($) Altria Group. Inc.: key financial ratios Reynolds American Inc. 2010(e) United States tobacco market segmentation II: % share.CONTENTS LIST OF TABLES Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Table 21: United States tobacco market value: $ million. $ billion). 2006–10 United States gdp (constant 2000 prices. 2010(e) United States tobacco market share: % share. $ billion). 2010–15 United States size of population (million). 2006–10 10 11 12 13 20 22 22 24 26 26 28 29 29 31 32 33 33 33 34 34 34 United States . 2010(e) Altria Group. 2006–10 United States gdp (current prices.

2010 Drivers of buyer power in the tobacco market in the United States. by value. 2010 Drivers of degree of rivalry in the tobacco market in the United States.2010 Page 6 . 2010(e) United States tobacco market share: % share. by value. 2010–15 10 11 12 13 14 15 16 17 Figure 9: 18 19 23 23 27 27 30 30 31 32 Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: United States .: revenues & profitability Altria Group.: assets & liabilities United States tobacco market distribution: % share. Inc.Tobacco © Datamonitor.: revenues & profitability Reynolds American Inc.0817 . 2010 Factors influencing the threat of substitutes in the tobacco market in the United States. This profile is a licensed product and is not to be photocopied 0072 . 2010(e) Forces driving competition in the tobacco market in the United States. Inc. Inc.: assets & liabilities Reynolds American Inc.: assets & liabilities Lorillard. 2010 Altria Group. 2010 Drivers of supplier power in the tobacco market in the United States. 2010(e) United States tobacco market value forecast: $ million.: revenues & profitability Lorillard. 2010 Factors influencing the likelihood of new entrants in the tobacco market in the United States.CONTENTS LIST OF FIGURES Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: United States tobacco market value: $ million. 2006–10(e) United States tobacco market segmentation I:% share. Inc. by value. 2010(e) United States tobacco market segmentation II: % share. by value.

Venezuela. Canada.0817 . This profile is a licensed product and is not to be photocopied 0072 . and cigars and cigarillos. Mexico. Colombia.Tobacco © Datamonitor. For the purpose of this report the Americas comprises Argentina. Brazil.MARKET OVERVIEW MARKET OVERVIEW Market definition The tobacco market consists of the retail sale of cigarettes. The market is valued according to retail selling price (RSP) and includes any applicable taxes. Uruguay and the US. Peru. United States . Any currency conversions used in the creation of this report have been calculated using constant 2010 annual average exchange rates. Chile. chewing tobacco. loose tobacco.2010 Page 7 .

3% for the period spanning 2006-2010. This profile is a licensed product and is not to be photocopied 0072 . generating total revenues of $87.6 billion in 2010. Cigarettes sales proved the most lucrative for the US tobacco market in 2010. representing a compound annual growth rate (CAGR) of 2.0817 . The performance of the market is forecast to decelerate. United States .9% of the market's overall value.MARKET OVERVIEW Research highlights The US tobacco market generated total revenues of $95.2010 Page 8 .1% for the fiveyear period 2010-2015. with an anticipated CAGR of 2.3 billion by the end of 2015.Tobacco © Datamonitor. equivalent to 91. which is expected to lead the market to a value of $106.9 billion.

In comparison. and the Japanese market declined with a CARC of -1.6 billion in 2010. to reach respective values of $368 billion and $45. The performance of the market is forecast to decelerate.4%. sales of cigars and cigarillos generated revenues of $3.4 billion in 2015. to reach respective values of $266.Tobacco © Datamonitor. equating to 3. over the same period.0817 .1% for the fiveyear period 2010-2015.9% of the market's aggregate revenues. with an anticipated CAGR of 2.3% for the period spanning 2006-2010.2010 Page 9 . United States . The US tobacco market generated total revenues of $95.3 billion by the end of 2015.MARKET OVERVIEW Market analysis The US tobacco market grew at a sluggish rate during the period 2006-2010. the Chinese market will increase with a CAGR of 6.9 billion. Cigarettes sales proved the most lucrative for the US tobacco market in 2010. Comparatively.7%.3 billion and $47. generating total revenues of $87. as a result of sluggish sales growth in the cigarettes category. which is expected to lead the market to a value of $106.7 billion in 2010. equivalent to 91.7 billion in 2010. over the same period. In comparison. representing a compound annual growth rate (CAGR) of 2. and the Japanese market will decline with a CARC of -1%.9% of the market's overall value. This profile is a licensed product and is not to be photocopied 0072 . Overall market growth is expected to decelerate in the forthcoming five years. the Chinese market increased with a CAGR of 6%.

This profile is a licensed product and is not to be photocopied 0072 .599.8 95.3% DATAMONITOR Figure 1: United States tobacco market value: $ million.2 2.0 70.437.9 million. The compound annual growth rate of the market in the period 2006–10 was 2.937.993.976.515.599.3%.0817 .3 68.9 88.532.5 93.2 2. 2006–10(e) $ million 87.9 € million 65.2% in 2010 to reach a value of $95.4 66.633.2 71.1 91.153.Tobacco © Datamonitor.8 % Growth 2.0 2.2010 Page 10 .9 2. Table 1: Year 2006 2007 2008 2009 2010(e) CAGR: 2006–10 Source: Datamonitor United States tobacco market value: $ million. 2006–10(e) Source: Datamonitor DATAMONITOR United States .918.MARKET VALUE MARKET VALUE The United States tobacco market grew by 2.

0817 . by value.9% of the market's total value. 2010(e) Source: Datamonitor DATAMONITOR United States . The cigars and cigarillos segment accounts for a further 3.MARKET SEGMENTATION I MARKET SEGMENTATION I Cigarettes is the largest segment of the tobacco market in the United States. by value. 2010(e) % Share 91. Table 2: Category Cigarettes Cigars and Cigarillos Chewing tobacco Loose tobacco Total Source: Datamonitor United States tobacco market segmentation I:% share.Tobacco © Datamonitor.8% 100% DATAMONITOR Figure 2: United States tobacco market segmentation I:% share. This profile is a licensed product and is not to be photocopied 0072 . accounting for 91.2010 Page 11 .9% 3.4% 0.9% 3.9% of the market.

3% of the global tobacco market value.Tobacco © Datamonitor.0817 .5% 100% DATAMONITOR Figure 3: United States tobacco market segmentation II: % share. Table 3: Category Asia-Pacific Europe United States Africa and Middle East Rest of the World Total Source: Datamonitor United States tobacco market segmentation II: % share.MARKET SEGMENTATION II MARKET SEGMENTATION II The United States accounts for 13.2010 Page 12 .8% 30. 2010(e) Source: Datamonitor DATAMONITOR United States . Asia-Pacific accounts for a further 50. This profile is a licensed product and is not to be photocopied 0072 .3% 2. 2010(e) % Share 50.1% 3.3% 13. by value. by value.8% of the global market.

5% 9.MARKET SHARE MARKET SHARE Altria Group.9% 100% DATAMONITOR Figure 4: United States tobacco market share: % share. accounts for a further 28. Inc. 2010(e) Source: Datamonitor DATAMONITOR United States . Others Total Source: Datamonitor United States tobacco market share: % share.2010 Page 13 . Inc. is the leading player in the United States tobacco market. Reynolds American Inc. Lorillard.2% of the market. Reynolds American Inc. generating a 53.0817 . by value.2% 8. by value.Tobacco © Datamonitor. Inc.4% 28. This profile is a licensed product and is not to be photocopied 0072 .4% share of the market's value. Table 4: Company Altria Group. 2010(e) % Share 53.

0817 . new entrants would find it increasingly difficult to establish a brand. United States . Summary Figure 5: Forces driving competition in the tobacco market in the United States. Also. which is why there is a moderate threat from substitute non-durable goods in this market. Moreover. with the top three players collectively accounting for 90% of the total market value. The key buyers will be taken as retailers.Tobacco © Datamonitor. coupled with advertising restrictions in many states. Reynolds American and Lorillard. which limits existing players and discourages new entrants. with a new proposal to post graphic posters warning of the dangers of using tobacco products.2010 Page 14 . is to be approved soon in the later part of 2010. The US tobacco market has seen increasing legislation and government regulation with regards to smoking. This would certainly bring many more regulations into market. because of the health implications associated with tobacco products. due to the dominance of large players such as Altria Group. This profile is a licensed product and is not to be photocopied 0072 .FIVE FORCES ANALYSIS FIVE FORCES ANALYSIS The tobacco market will be analyzed taking tobacco manufacturers as players. and tobacco leaf farmers and other raw material suppliers as the key suppliers. Rivalry in the market is boosted by the lack of product differentiation and the pressure placed on market players by the illicit cigarette trade. there are a number of benefits to consumers from using substitutes. Furthermore. 2010 Source: Datamonitor DATAMONITOR The US tobacco market is highly concentrated.

2010 Page 15 .FIVE FORCES ANALYSIS Buyer power Figure 6: Drivers of buyer power in the tobacco market in the United States. so there is potentially some pull-through of end-consumer demand on retailers. The concentration of retail outlets is relatively fragmented in the tobacco market. which illustrates that in most cases retailers are not reliant upon tobacco sales.0817 . The main retailers for the US tobacco market include independent retailers. Overall. service stations and supermarkets/hypermarkets. which increases buyer power. independent retailers are the most dominant distribution channel. with 27. Furthermore. Customers are likely to be loyal towards certain brands. In the US.Tobacco © Datamonitor. This profile is a licensed product and is not to be photocopied 0072 . tobacco products are just one of many products sold by most retailers. as there are a number of outlets where the products can be sold.8% share of total distribution. which decreases buyer power to some extent. United States . 2010 Source: Datamonitor DATAMONITOR The retailers are considered as buyers in the tobacco market. the buyer power in this market is moderate.

bundle wraps and tobacco pouches.2010 Page 16 . There are limited alternative raw materials in this market. preservatives and brand-specific flavors. United States . These farmers lack power in the supply chain because of their smaller size. their respective influence over the market is increased. Due to the relative size of key suppliers.FIVE FORCES ANALYSIS Supplier power Figure 7: Drivers of supplier power in the tobacco market in the United States. They are also the world's largest supplier of RYO (Roll Your Own) tobacco booklet covers. Overall. as well as printed OPP film (Oriented Polypropylene film). Further inputs to the market include processing aids. so players are unlikely to switch supplier. Another global tobacco packaging supplier is Amcor.Tobacco © Datamonitor. supplier power is fairly moderate. with many farms being family run businesses. plastic. Companies such as Alcan Packaging. and foil to protect and preserve the products of this market. Alcan's inputs include in-line rotogravure printed hinge-lid blanks and soft packs. are key suppliers to the tobacco market. particularly those in developing countries. which increases supplier power. This profile is a licensed product and is not to be photocopied 0072 .0817 . humectants (which keep the tobacco moist and pliable). who are a leading global manufacturer of tobacco packaging. such as paper/card. Other key inputs include packaging materials. 2010 Source: Datamonitor DATAMONITOR Tobacco is an agricultural product and therefore key suppliers to the tobacco market include tobacco leaf farmers.

raising entry barriers. with a possibility of the FDA taking over regulation of tobacco in USA. there is a weak threat from new entrants to the US tobacco market. For instance. the US government proposed that convenience stores and other retailers in certain states be required to post graphic poster warnings of the dangers of using tobacco products. will bring more regulations in place. restrictions on smoking in public places and pictorial health warnings have been adopted in a number of US states.FIVE FORCES ANALYSIS New entrants Figure 8: Factors influencing the likelihood of new entrants in the tobacco market in the United States. Current tobacco control strategies seek primarily to decrease the demand for cigarettes through measures that encourage individuals to adopt healthier behaviors. for example. shelf-space in retail outlets is finite and retailers may be unwilling to stock products of an entirely new.Tobacco © Datamonitor. United States . 2010 Source: Datamonitor DATAMONITOR Legislation and government regulation with regards to smoking also continue to grow in this market.2010 Page 17 . unproven brand. Moreover. in May 2010. making it tough for new entrants. Furthermore.0817 . Overall. This profile is a licensed product and is not to be photocopied 0072 .

attempt to do so by substituting tobacco products for products such as nicotine gum. 2010 Source: Datamonitor DATAMONITOR Substitutes in the tobacco market may include various non-durable consumer goods. United States . without the harmful effects of inhaling smoke. This profile is a licensed product and is not to be photocopied 0072 .Tobacco © Datamonitor. inter-segmental substitution still involves essentially the same product. largely due to the health implications associated with smoking (e.FIVE FORCES ANALYSIS Substitutes Figure 9: Factors influencing the threat of substitutes in the tobacco market in the United States. cigars and pipe tobacco.). Furthermore. there is a moderate threat from substitutes in the US tobacco market. because of the addictive quality of nicotine present in tobacco products. Unlike tobacco products. Overall. increased risk of lung cancer. nicotine replacement products are highly promoted through a range of media. nicotine patches. with players who specialize in the manufacture of cigarettes diversifying into cigars for example.0817 . which face restrictions on advertising in many markets. and herbal cigarettes. heart disease etc.2010 Page 18 . many smokers who want to quit. These products fulfill the consumer's need for nicotine.g. for example nicotine gum. The benefits of substituting tobacco products for alternate non-durable consumer goods are especially notable in concerns to consumer health. Players and consumers alike may substitute one tobacco product for another. or patches. there are inter-segmental substitutes apparent within this market. alternatives to cigarettes and fine cut tobacco products include smokeless tobaccos. However. However.

2010 Source: Datamonitor DATAMONITOR The US tobacco market is highly concentrated. which increases rivalry. This profile is a licensed product and is not to be photocopied 0072 .FIVE FORCES ANALYSIS Rivalry Figure 10: Drivers of degree of rivalry in the tobacco market in the United States.0817 .2010 Page 19 . Illicit tobacco supplies through smuggling and counterfeit trade impact upon players' revenues. Product differentiation is essentially limited between the core tobacco products. Overall. there is a moderate degree of rivalry in the US tobacco market. United States . which include: chewing tobacco. which will serve to boost rivalry. cigars and cigarillos.Tobacco © Datamonitor. Reynolds American and Lorillard collectively holding 90% of the total market value. with leading players such as Altria Group. The fairly slow market growth in the US tobacco market compared to other regions does very little to ease rivalry among the players. cigarettes and loose tobacco.

The company’s product portfolio comprises brands such as Black & Mild.0817 . Columbia Crest.2010 Page 20 . The company primarily operates in the US. U. In addition. other premium brands such as Virginia Slims.altria.S. Michelle Wine Estates. cigars. alcohol. The key brands of the company include Chateau Ste. and Philip Morris Capital Corporation. Skoal and Husky brand names. Altria has 27.: key facts 6601 West Broad Street. Red Seal. Middleton's and Kentucky Club. Michelle. Benson & Hedges.Tobacco © Datamonitor. Inc. smokeless products.S. Prince Albert. Conn Creek and Erath. wine. John Middleton.LEADING COMPANIES LEADING COMPANIES Altria Group. Altria operates in the wine segment through its subsidiary Ste. Altria operates through five business segments: cigarettes. and financial services. Michelle Wine Estates (SMWE).1% stake in SABMiller. The company markets its products under the Copenhagen. Villa. United States . Smokeless Tobacco Company (USSTC).com December MO New York DATAMONITOR Head office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website Altria Group (Altria) is a diversified company which has business interests in tobacco. Carter Hall. Ste. Domaine Ste. Smokeless Tobacco Company. The company operates through its subsidiaries that include Philip Morris USA. food and financial services. The company markets its products under brands like Marlboro. The smokeless segment manufactures and markets smokeless tobacco products through the company’s subsidiary U. Virginia 23230. Inc. The cigars segment manufactures and markets machine-made large cigars and pipe tobacco through Altria’s subsidiary John Middleton (Middleton). Wine Berry. This profile is a licensed product and is not to be photocopied 0072 . and discount brands such as Basic and L&M among others. a producer of premium varietal and blended table wines. one of the world's largest brewers. Richmond. Michelle. Table 5: Altria Group. Parliament. The cigarettes segment manufactures and markets cigarettes and smokeless tobacco products in the US through Altria’s subsidiary Philip Morris USA. USA 1 804 274 2200 www.

subsidiaries plan to test-market "tobacco sticks". Altria acquired UST Inc. the cigarettes division recorded revenues of $21. an alternative to conventional tobacco products. In 2009. This profile is a licensed product and is not to be photocopied 0072 . United States . and acquired Middleton in December 2007.S. In May 2011. The company also plans to expand its Marlboro Snus smokeless tobacco nationwide. a holding company engaged in the manufacturing and marketing of moist smokeless tobacco products through U. cigars and financial services after it spun off Philip Morris International (PMI) in early 2008.2010 Page 21 . In February 2011.6% over 2009. Altria Group Inc. During the FY2010. it was announced that two Altria Group Inc. an investment company engaged in leveraged and direct finance lease investments. The cigars division recorded revenues of $560 million in FY2010. The net profit of the company was $3. an increase of 3. The group revised its reportable segments to cigarettes and other tobacco products.6 billion in FY2010.LEADING COMPANIES Altria’s provides financial services through its subsidiary Philip Morris Capital Corporation (PMCC).8% over FY2009.9 billion in FY2010.4% over 2009. an increase of 21..4 billion in the financial year (FY) ended December 2010. Key Metrics The company recorded revenues of $24. Michelle Wine Estates. an increase of 3. Smokeless Tobacco Company and premium wines through Ste. introduced new filter cigarettes in Lithuania marketed under the L&M USpin brand name.6 billion. an increase of 7.Tobacco © Datamonitor.0817 .7% over 2009. The smokeless products division recorded revenues of $1.4% over FY2009. a form of smokeless tobacco. an increase of 13.

154 $474.697 2007 52.0 175.0 10.0817 .0 24.402. Inc.355.0 57. Inc.0% 11.0 32.000 2008 19.861.573.3% $107.: key financial ratios 2006 64.0 4.000 2007 18.6% $1.371 $68.0 37.270.0% (1.0 9.190 $116.6%) (39.206.0 32.600 $320.215.: key financials ($) 2006 18.4% 2.790.000 2010 24.7%) (44.0 3.9%) 67.400 2009 23.0% 3.2%) 89.4% (0.500 Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings DATAMONITOR United States .7% (52.844.664.600 2010 16.0% $2.0 64.556.677.930.300 $390.5% 3.387.363.0% 10.0 12.3% 12.0 10.0 104.6% 21.0 3.5%) 62.4%) (10.746.000 Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings DATAMONITOR Table 7: Ratio Altria Group.7% 34.651.0% (70.0 38.8% 33.0 27.Tobacco © Datamonitor.356.5% $2.0 84.175.8% 10.6% 11.038 2009 13.LEADING COMPANIES Table 6: $ million Altria Group.436.1% $222.2%) 86.0 10. This profile is a licensed product and is not to be photocopied 0072 .500 2008 25.9%) (37.0 36.905.2010 Page 22 .022.5%) (3.6% 88.786.

2010 Page 23 .0817 .: assets & liabilities Source: company filings DATAMONITOR United States .LEADING COMPANIES Figure 11: Altria Group. This profile is a licensed product and is not to be photocopied 0072 . Inc.Tobacco © Datamonitor.: revenues & profitability Source: company filings DATAMONITOR Figure 12: Altria Group. Inc.

0817 . Pall Mall. Inc. which was formed to facilitate the merger of RJR Tobacco Company with Brown & Williamson Tobacco Corporation. Doral. United States . The RJR Tobacco segment consists of the primary operations of R. North Carolina. Reynolds Tobacco Company.2010 Page 24 . the US subsidiary of British American Tobacco (BAT) in 2004.com December RAI New York DATAMONITOR Head office: Telephone: Fax: Website: Financial year-end: Ticker: Stock exchange: Source: company website Reynolds American (RAI) is engaged in the manufacture and sale of cigarettes. Spain.. The American Snuff segment consists of the primary operations of American Snuff Co.S.S.RJR Tobacco owns cigarette manufacturing facilities in the Winston-Salem. Winston-Salem. U. North Carolina 227101. This profile is a licensed product and is not to be photocopied 0072 .Tobacco © Datamonitor. CAMEL Snus and CAMEL Dissolvables. RAI manufactures and sells cigarettes either independently or through joint ventures in France. Table 8: Reynolds American Inc. duty-free shops and U.: key facts 401 North Main Street.LEADING COMPANIES Reynolds American Inc. Santa Fe Natural Tobacco Company. and the US. It is a holding company. RJR Tobacco also manages a contract manufacturing business through arrangements with British American Tobacco (BAT) affiliates and manages tobacco products sold to certain U. RJR Tobacco. Winston-Salem. USA 1 336 741 2000 1 336 741 0881 www. North Carolina. J. CAMEL Snus is pasteurized tobacco in a small pouch that provides convenient tobacco consumption. RAI’s largest operating segment. Kool. the US. RJR Tobacco has a combined production capacity of approximately 160 billion cigarettes per year. Winston and Salem. RJR Tobacco’s largest selling cigarette brands are Camel. Italy. and Lane while the two RAI’s wholly owned subsidiaries. The company's central distribution center and a pilot plant for trial manufacturing of new products are located at the Whitaker Park complex. RJR Tobacco offers two types of modern smoke-free tobacco. overseas military bases.S. is the second largest cigarette manufacturer in the US. territories. referred to as Santa Fe and Niconovum AB is included in All Other segment. and the Whitaker Park complex.reynoldsamerican. The company operates through two reportable business segments: RJR Tobacco and American Snuff.

2% over 2009. an increase of 6. the RJR Tobacco division recorded revenues of $7. The all other division recorded revenues of $482 million in FY2010.1 billion in FY2010.4 billion. Reynolds American Inc. sold off its subsidiary Lane Ltd. Winston-Salem. an increase of 1. Georgia. as well as manages RJR Tobacco’s super premium cigarette brands Dunhill and State Express 555. an increase of 15. The company also distributes a variety of tobacco products including Winchester and Captain Black little cigars.8% over 2009. which are licensed from BAT. Santa Fe manufactures and markets cigarettes and other tobacco products under the Natural American Spirit brand. During FY2010.6 billion in the financial year (FY) ended December 2010. Key Metrics The company recorded revenues of $8.LEADING COMPANIES CAMEL Dissolvables include CAMEL Orbs. The net profit of the company was $1.0817 . The American Snuff division recorded revenues of $719 million in FY2010. Sticks and Strips all of which are made of finely milled tobacco and dissolve completely in the mouth. This profile is a licensed product and is not to be photocopied 0072 . an increase of 17% over 2009. American Snuff’s primary manufacturing facility is located in Memphis. American Snuff is the second largest smokeless tobacco products manufacturer in the US. an increase of 0.7% over FY2009. wholesalers and other direct customers. American Snuff primary brands include its largest selling moist snuff brands. and Bugler roll-your-own tobacco. Grizlly and Kodiak. Tennessee. Other facilities are located in Clarksville. In March 2011.6% over FY2009.2010 Page 25 . some of which are retail chains. to Scandinavian Tobacco Group A/S for $205 million. Tennessee. North Carolina.Tobacco © Datamonitor. The company markets its products to distributors. Bowling Green. Kentucky and Tucker. United States .

0 11.510.4% (4.263 Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Revenue per employee Profit per employee Source: company filings DATAMONITOR United States .2%) (8.419.152 $202.667 $161.0 962.LEADING COMPANIES Table 9: $ million Reynolds American Inc. This profile is a licensed product and is not to be photocopied 0072 .5% 6.400 2010 8.134.551.469 $150.1% $1.8%) (0.845 $184.225 2008 15.178.0 1.500 2007 9.568.009.0 10.6% (5.100 2008 8.0 1.3% 7.333 2007 14.0 7.338.340.6% 7.0 1.210.0 5.4%) 63.4% $1.629.0 11.727 2009 11.0 18.8% 61.0 11.0 18.313 2010 13.5% 0.0%) (2.845.0 6.9% 6.3% $1.175 $195.1% 25.Tobacco © Datamonitor.2% 39.0 1.9% 5.8%) (3.0% 1.3% $1.700 Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings DATAMONITOR Table 10: Ratio Reynolds American Inc.2% 3.0 18.113.8% 65.0 18.0 7.5%) 6.0 6.078.308.: key financial ratios 2006 14.0817 .1% (2.0% 2.3% 59.0 11.: key financials ($) 2006 8.917.500.0 17.2010 Page 26 .511.163.600 2009 8.315.3% $1.9% 7.154.135.023.270.2%) 61.

This profile is a licensed product and is not to be photocopied 0072 .: assets & liabilities Source: company filings DATAMONITOR United States .: revenues & profitability Source: company filings DATAMONITOR Figure 14: Reynolds American Inc.Tobacco © Datamonitor.2010 Page 27 .LEADING COMPANIES Figure 13: Reynolds American Inc.0817 .

The company produces cigarettes at their Greensboro. The net profit of the company was $1 billion in FY2010. Its products are manufactured at Greensboro. USA 1 336 335 7000 www. (Delaware).com December LO New York DATAMONITOR Lorillard is a tobacco company engaged in the manufacture and marketing of cigarettes. Newport accounted for 90% of the total sales of the company in 2010. It offers various cigarette products in premium and discount segments. an increase of 13.LEADING COMPANIES Lorillard.: key facts 714 Green Valley Road. An affiliate of Reynolds American Inc. an increase of 8. a menthol-flavored cigarette brand. The company has 29 storage warehouses at Danville. Virginia facility. North Carolina 24708 7018. Greensboro. These five brands are marketed in 43 different product offerings which vary in taste. United States .5% over FY2009.lorillard. The company's flagship brand includes Newport.2010 Page 28 .9 billion in the financial year (FY) ended December 2010. Lorillard Licensing Company (North Carolina) and One Park Media Services. This profile is a licensed product and is not to be photocopied 0072 . length and packaging. (RAI) manufactures all of Lorillard’s reconstituted tobacco pursuant to its specifications. Inc. The company primarily operates in the US. Inc. The company also markets cigarettes through five additional brands that include Kent. Lorillard uses burley. North Carolina manufacturing plant. North Carolina facility. Lorillard’s subsidiaries include Lorillard Tobacco Company (Delaware). flue-cured and aromatic tobaccos which are grown in Turkey and other near Eastern countries to manufacture its tobacco products.4% over FY2009.0817 . Key Metrics The company recorded revenues of $5. Table 11: Head office: Telephone: Website: Financial year-end: Ticker: Stock exchange: Source: company website Lorillard. Inc. Maverick and Old Gold. which has a production capacity of approximately 200 million cigarettes per day and approximately 50 billion cigarettes per year. True.Tobacco © Datamonitor. Lorillard purchases more than 66% of the domestic leaf tobacco from Alliance One International. flavor.

0 1.755.LEADING COMPANIES Table 12: $ million Lorillard.759.8% 35.1% Profit margin Revenue growth Asset growth Liabilities growth Debt/asset ratio Return on assets Source: company filings DATAMONITOR United States .0 1.0 898.8%) 8.1% 5.029.0 3.4% 61.321.0 2.0 2.6% 38.0% 2009 18.0 826.969.464.: key financial ratios 2006 22.8% 36.5% 106.7%) 6.233.0 1.5% 53.0 3. Inc.0 2.204.0 2.690.0 2.575.9% 47.2% (1.5% 72.3% 13.6% 5.600.0 2.1% 24.0 2007 3.0 948.296.7% 2007 22. Inc.0 2.9% (10.0 2.700 2010 5.4% 28.700 Revenues Net income (loss) Total assets Total liabilities Employees Source: company filings DATAMONITOR Table 13: Ratio Lorillard.0 1.: key financials ($) 2006 3.0 887.0817 .800 2008 4.932.0 2.0% 5.7% 2010 17.5% 2008 21.7% (5.0% 41.2% 96.Tobacco © Datamonitor.2010 Page 29 .800 2009 5. This profile is a licensed product and is not to be photocopied 0072 .5% 10.488.0% 33.521.1% 29.587.3%) 0.

0817 .: revenues & profitability Source: company filings DATAMONITOR Figure 16: Lorillard.2010 Page 30 . Inc.Tobacco © Datamonitor. Inc.: assets & liabilities Source: company filings DATAMONITOR United States . This profile is a licensed product and is not to be photocopied 0072 .LEADING COMPANIES Figure 15: Lorillard.

Table 14: Channel Independent Retailers Service Stations Supermarkets / hypermarkets Others Total Source: Datamonitor United States tobacco market distribution: % share. This profile is a licensed product and is not to be photocopied 0072 . Service Stations accounts for a further 21.2010 Page 31 .8% share of the total market's value.DISTRIBUTION MARKET DISTRIBUTION Independent Retailers form the leading distribution channel in the United States tobacco market.8% 21. accounting for a 27.Tobacco © Datamonitor.0% 100% DATAMONITOR Figure 17: United States tobacco market distribution: % share. 2010(e) % Share 27.5% 11.0817 . by value.7% 39. 2010(e) Source: Datamonitor DATAMONITOR United States . by value.5% of the market.

8 104.790. an increase of 11.1 78.1% 2.171.2% 2.5 million.429.1 76.146.1 106.8 73. Table 15: Year 2010 2011 2012 2013 2014 2015 CAGR: 2010–15 Source: Datamonitor United States tobacco market value forecast: $ million.Tobacco © Datamonitor.968. the United States tobacco market is forecast to have a value of $106. 2010–15 $ million 95.695.1% 2.572.9 97.8 80.599.2010 Page 32 .282.9 101.818.2% 2.6 99.1% DATAMONITOR Figure 18: United States tobacco market value forecast: $ million.5 € million 71.0817 .1%. This profile is a licensed product and is not to be photocopied 0072 .1 75.038.993.6 % Growth 2. The compound annual growth rate of the market in the period 2010–15 is predicted to be 2.2% 2.282.MARKET FORECASTS MARKET FORECASTS Market value forecast In 2015.2% since 2010. 2010–15 Source: Datamonitor DATAMONITOR United States .2% 2.

0% 4.8% 0.0% 1. $ billion).9% (0.9% 0.MACROECONOMIC INDICATORS MACROECONOMIC INDICATORS Table 16: Year 2006 2007 2008 2009 2010(e) Source: Datamonitor United States size of population (million).509.5% (3.5 11.9% 3.627.129.2 306. 2006–10 Constant 2000 Prices.0% 0. $ billion 11.4 11.4 304.4 301.8 14.9 14.5 14.1 % Growth 1.0817 .0% DATAMONITOR Source: Datamonitor Table 18: Year 2006 2007 2008 2009 2010(e) United States gdp (current prices. This profile is a licensed product and is not to be photocopied 0072 .7% DATAMONITOR Source: Datamonitor United States .475.0 % Growth 2.627.8%) 4.065. $ billion 13.288.8% DATAMONITOR Table 17: Year 2006 2007 2008 2009 2010(e) United States gdp (constant 2000 prices.5%) 3.5 14.0 11. 2006–10 Population (million) 298. $ billion).697.733.7 309.7% 1.8 11.725.Tobacco © Datamonitor.3%) (3.5 % Growth 6.2010 Page 33 . 2006–10 Current Prices.

This profile is a licensed product and is not to be photocopied 0072 .8% (0.4633 1.0817 .6 126. 2006–10 Exchange rate (€/$) 1.1 120.Tobacco © Datamonitor.3905 1.0 124.6 DATAMONITOR Source: Datamonitor Table 21: Year 2006 2007 2008 2009 2010 United States exchange rate.MACROECONOMIC INDICATORS Table 19: Year 2006 2007 2008 2009 2010(e) United States inflation. 2006–10 Inflation Rate (%) 3.4 125.2547 1.9% 3.3683 1.2010 Page 34 .4%) 1. 2006–10 Consumer Price Index (2000 = 100) 117.3279 DATAMONITOR Source: Datamonitor United States .6% DATAMONITOR Source: Datamonitor Table 20: Year 2006 2007 2008 2009 2010(e) United States consumer price index (absolute).2% 2.

The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends Datamonitor aggregates and analyzes a number of secondary information sources.0817 . accurate and up-to-date United States . company profiles and macroeconomic & demographic information. which enable our researchers to build an accurate market overview Definitions – Market definitions are standardized to allow comparison from country to country.Tobacco © Datamonitor. all aggregated. analyzed. Datamonitor’s in-house databases provide the foundation for all related industry profiles Preparatory research – We also maintain extensive in-house databases of news. analyst commentary.000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools. Review of in-house databases – Created using 250. This profile is a licensed product and is not to be photocopied 0072 . regulatory and demand-related factors Continuous quality control ensures that our processes and profiles remain focused.2010 Page 35 .APPENDIX APPENDIX Methodology Datamonitor Industry Profiles draw on extensive primary and secondary research. including: National/Governmental statistics International data (official international sources) National and International trade associations Broker and analyst reports Company Annual Reports Business information libraries and databases Modeling & forecasting tools – Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts. which can then be refined according to specific competitive. cross-checked and presented in a consistent and accessible style.

APPENDIX Industry associations International Tobacco Growers' Association No. This profile is a licensed product and is not to be photocopied 0072 . 6000-081 Castelo Branco.tobaccoleaf.org Related Datamonitor research Industry Profiles Global Tobacco Tobacco in Canada Tobacco in Mexico Tobacco in Brazil Tobacco in France Tobacco in Germany Tobacco in the United Kingdom Tobacco in Belgium Tobacco in Italy Tobacco in the Netherlands Tobacco in Spain Tobacco in the Czech Republic Tobacco in Denmark Tobacco in Hungary Tobacco in Norway Tobacco in Russia Tobacco in Poland Tobacco in Sweden Tobacco in Europe Tobacco in Australia United States .Tobacco © Datamonitor.A.: 352 272 325 901 Fax: 352 272 325 906 www.2010 Page 36 . 1º dtº.0817 . Portugal Tel. 30 .

0817 .APPENDIX Tobacco in China Tobacco in India Tobacco in Japan Tobacco in Singapore Tobacco in South Korea Tobacco in Taiwan Tobacco in Asia-Pacific Tobacco in South Africa United States .2010 Page 37 . This profile is a licensed product and is not to be photocopied 0072 .Tobacco © Datamonitor.

No part of this publication may be reproduced. stored in a retrieval system or transmitted in any form by any means. Please note that the findings. This profile is a licensed product and is not to be photocopied 0072 . Datamonitor plc. recording or otherwise. United States . without the prior permission of the publisher. mechanical. photocopying. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. electronic.APPENDIX Disclaimer All Rights Reserved. As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.2010 Page 38 . conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources.Tobacco © Datamonitor.0817 . whose accuracy we are not always in a position to guarantee.

If you have further requirements. Combining our industry knowledge and experience. please contact us directly at consulting@datamonitor. competitors and products. Consumer Markets. we assist over 6. Retail. This profile is a licensed product and is not to be photocopied 0072 . Our experts then interpret this data to produce detailed forecasts and actionable recommendations. Datamonitor consulting We hope that the data and analysis in this profile will help you make informed and imaginative business decisions. Energy & Utilities. profiles give you the most important qualitative and quantitative summary information you need . providing top-level information on 30.0817 . helping you create new business opportunities and ideas.000 of the world’s leading companies in making better strategic and operational decisions.Tobacco © Datamonitor.000 industries and 100 countries. Technology and Telecoms industries. While they do not contain the highly detailed breakdowns found in premium reports. We gather information on market segmentation. analysis and opinion across the Automotive.ABOUT DATAMONITOR ABOUT DATAMONITOR The Datamonitor Group is a world-leading provider of premium global business information. Logistics & Express. market growth and pricing. For more information about Datamonitor’s consulting capabilities. Financial Services.com. delivering independent data.000 companies. 3. our market intelligence products and services ensure that you will achieve your desired commercial goals by giving you the insight you need to best respond to your competitive environment. Premium Reports Datamonitor's premium reports are based on primary research with industry panels and consumers. United States . Delivered online via our user-friendly web platforms.2010 Page 39 .including predictions and forecasts. industry and country profiles complements our premium products. Pharmaceutical & Healthcare. Datamonitor’s consulting team may be able to help you. Summary Reports Our series of company.

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