NEW YORK – Today’s millennials may not have interest in Stetson hats and cowboys, nor can they afford to smoke a premium cigarette brand such as Marlboro Reds, which is exactly what Philip Morris USA has learned in the five years since launching Marlboro Black.
The Wall Street Journal reports that since PM USA introduced its lower-priced Black cigarettes, sales to young adults have been encouraging. The news source says that Black has “breathed life into Marlboro,” and has helped the brand reach an all-time high of 44.1% market share.
“It’s making Marlboro relevant again,” Bonnie Herzog, an analyst with Wells Fargo, told the Journal, adding that although it’s unclear how much revenue the brand generates, she estimates 1% market share is worth about $320 million in annual revenue for PM parent company, Altria.
Jerry Weger, director of sales at Altoona, Pennsylvania-based Sheetz, manages the tobacco business for the convenience store chain and told the Journal that Marlboro’s “manly man thing wasn’t that appealing” to the younger generation. However, the black packaging of Marlboro Black gave the brand an upscale image that has allowed it to accumulate an estimated 6% to 8% market share at Sheetz stores.
Phil Metzinger, vice president, tobacco at Lufkin, Texas-based Brookshire Brothers (Polk Oil Co.), commented to the Journal that Black’s packaging has helped boost sales across the entire Marlboro portfolio.
Following the 2008 recession, which took a toll on young adults who couldn’t afford premium cigarettes, Altria set out to develop a cigarette that would appeal to young adults at a less expensive price point. Today, Altria CEO Marty Barrington commented to the Journal that Black has “added a whole new dimension” to Marlboro and allowed the brand to stay “relevant to the current cohort of adult tobacco consumers.”
Read more about cigarette performance in convenience stores later this week when the December issue of NACS Magazine hits mailboxes.