TOBACCO ANALYSIS: NIELSEN XAOC + C-STORE

November 15, 2022

THE COWEN INSIGHT

Cigarette volumes in combined xAOC channels (food, drug & mass) + c-store data were down 8.9% YoY in the 4 weeks ended 11/5/22, while dollar sales were down 4.5%. Industry volumes were down 9.4% and 8.7% on a T4W and T12W basis, respectively, in MSAi tracked channels. E-cig category dollar sales increased 0.4% while smokeless sales were up 5.8% YoY.

Cigarette Volumes Down HSD

In NielsenIQ, cigarette volumes were down 8.9% YoY in the most recent 4-week period, below the -7.8% performance during the last 12 weeks. On a 2-year stack, 4-week volumes fell 17.8%, a ~60 bp sequential decline from -17.2% in the prior period. Cigarette dollar sales declined 4.5% (below the -3.0% performance during the last 12 weeks). Price/mix contributed 4.5 pts in the 4-week period, just below the 4.7 pt contribution over the last 12-weeks. Separately, we note that MSAi data (measuring shipments to retail) shows that the category was down 9.4% in the last 4-weeks (ending November 5th) and down 8.7% over the last 12-weeks. We continue to see down-trading amid consumer headwinds (inflation, lack of stimulus and higher, albeit normalizing, gas prices).

MO Share Down

Volume share for MO was down ~60 bps (to 49.0%), a slight improvement relative to TTW trends (-70 bps). Marlboro volume share was down 16 bps, above TTW declines of 32 bps. Meanwhile, L&M's share was down ~40 bps over both the last the 4- and 12-week periods. MO's dollar share was down 28 bps during the period, while Marlboro lost 3 bps of dollar share. BATS's volume share was down 84 bps over the last 4 weeks (to 31.3%), vs. -78 bps during the 12-week period. Newport's share fell 89 bps (better than its 92 bp share loss over the last 12 weeks), while NAS volume share was down 12 bps and 3 bps in the past 4- and 12-week periods, respectively. Camel's volume share was down ~30 bps (in line with TTW trends) while Pall Mall's share was down 87 bps during the period (flat with TTW trends). Meanwhile, Lucky Strike 4-week volume share increased 139 bps YoY to 2.6%, just below of TTW share gains of 142 bps. On a dollar basis, BATS's share was down 72 bps YoY to 34.1%, below its 12-week trend of -58 bps. IMB's volume share was up 76 bps during the period, driven by Sonoma (+29 bps), Maverick (+23 bps) and Crowns (+28 bps) share gains. IMB's dollar share was up 55 and 62 bps during the last 4 and 12 weeks to 8.1%. Vector Group's volume share was up 57 bps, driven by 107 bps of volume share gain from Montego, while Pyramid and Eagle were down 14 bps and 36 bps, respectively. Combined volume share for private label and other manufacturers was +13 bps, below the +14 bps TTW performance.

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