Tobacco Embraces 'Natural'

Retailers scout for differentiation with premium and natural, even as the latter faces regulatory challenges
Natural American Spirits cigarettes

It’s working in other categories in the c-store. Why not in tobacco, too?

Products positioned as “natural” is an attractive subcategory for convenience retailers to consider in the premium-tobacco space. And Illinois retailer Mark Gil is doing just that.

Natural cigarettes are a winner in his single store, he says, because they conjure up a perception of organic, Mother Earthiness—and he considers it well worth the premium price point the subcategory commands.

“Natural American Spirit continues to grow in our store, as people are willing to pony up the additional 60 cents to $1 above traditional cigarettes,” says Gil, owner of the BP Wash-N-Go in Glen Ellyn, Ill.

Natural cigarette brands, however, have landed squarely in the crosshairs of Food and Drug Administration (FDA) oversight, with regulatory scrutiny occurring around the accuracy of natural-cigarette claims.

In January, New York-based Nat Sherman Inc., now a subsidiary of Altria, renamed its Naturals brand Select, due to a settlement agreement with the FDA, according to Altria spokesman Steve Callahan.

“The issue with [the] FDA was resolved prior to the closing (in January) and Nat Sherman Select is now shipping [at the end of February],” Callahan told Convenience Store Products.

Callahan wasn’t able to comment on any type of backlash associated with the name change, or whether brand equity might be negatively affected. He says it’s the same product as Naturals, which has been on the market for several decades.

Last fall, the FDA sent warning letters to Santa Fe Natural Tobacco Inc. (subsidiary of Reynolds American Inc.) stating that advertising their traditional cigarette products as “additive free” or “natural” is in violation of federal regulations. In mid-January, it was ruled that Santa Fe would remove the term “natural” from all Natural American Spirit cigarette product labels, advertising and promotional materials; however, it may continue to use the term “natural” in the Natural American Spirit brand name and trademarks. When asked for comment on the matter, Reynolds officials declined.

To Illinois retailer Gil, selling natural cigarettes will proceed as business as usual: “Over the years, we’ve grown accustomed to the specter of tobacco regulations.”