Philip Morris Tests Smokeless, Spitless Tobacco

Philip Morris USA this month begins testing a smokeless tobacco in Indianapolis to gauge smokers' interest in an alternative to cigarettes.

The product, called Taboka (pronounced tuh-BOH-kuh), is Philip Morris' first step in a strategy to expand beyond traditional cigarettes into adjacent tobacco segments.

That expansion plan would leverage Philip Morris' infrastructure, including production, merchandising and marketing, as smoking increasingly falls out of favor. A number of cities have passed smoking bans on public places, including restaurants and bars; that climate could spur smokers to try more socially acceptable tobacco alternatives.

Taboka is sold in a pouch, a "Tobaccopak," and comes in two flavors, orignal and menthol (called Taboka Green). Users put the single-serve pouch in their mouth, between cheek and gums, then dispose of the pouch when finished. Each pouch lasts about twice as long as a cigarette. Philip Morris supports the launch with direct mail to Indianapolis-area residents in its database. There are no plans for print ads.

Taboka marketing will follow the restrictions set by the 1998 Master Settlement Agreement, and the product will be shelved behind retail counters to prevent under-age consumers from buying it. Philip Morris will handle Taboka merchandising through its Retail Leaders program that pays retailers who comply with merchandising activities.

Philip Morris leads cigarette sales with a 50.4% market share, topping 50% for the first time in 2005. Its U.S. tobacco sales topped $18 billion in 2005, up 3.6% from the year before, but shipment volume was flat (0.8%) at 185.5 billion units. Philip Morris' international sales outpaced its domestic growth, up 14.5% to $45.3 billion for 2005.