This transcript is automatically generated
Earned more than a billion dollars last year on revenue of more than eight billion dollars Reynolds American is also.
Transforming itself by building its smokeless brands including a new digital cigarette.
For joining us now with more is Reynolds American's vice president of investor relations Morris small Morris.
Thank you for joining -- -- -- cigarette volumes -- falling more Americans are quitting smoking anti smoking laws and had a big impact.
Throw it a weak economy consumers who are feeling the pinch -- -- us get how are you positioning yourself in such a challenging environment.
Well actually thanks for having me on today.
Yeah you're right there are definitely challenges.
In the Andrea industry itself but as well as in the broader economy.
But if you look at the performance or her company would actually done quite well and -- managing through this situation.
-- domestic cigarette shipment volumes slid two point 7% in the last quarter that was worse than you have predicted.
I -- why have those volumes falling and -- you having to raise prices to offset that.
Well yeah cigarette volumes about how long term secular decline.
For really for several decades now.
And the industry and -- as well have been taken price increases but.
You know when you look at the cigarette category we really focus side that are RJ Reynolds subsidiary home to brands camel in the premium segment.
And Pall mall -- -- segment and those two brands have actually held in quite well.
And in fact we've small company and Santa Fe, New Mexico that -- -- natural American spirit brand.
At that brand sells at about a 20% premium to other premium priced cigarettes and they've actually seen volumes growing.
Over 10% for the past several years so long on the France or were focused on we've seen are really good to our results -- life.
And of course I would imagine going a lot more oil more focus on the smokeless product she got snuff and chewing tobacco.
How believe markets bad highway admin note that growing but they gonna grow more more in your opinion.
Yeah I believe that they well -- -- like things smokeless tobacco category that categories that grow and about half percent for many years now and we don't really see him to that ten in fact our brand -- which is a leading grant branded smokeless -- Actually grow and about twice the industry right.
They're also testing one of these said digital cigarettes go.
Out is it already out there and what how's it being received.
I guess we are casting that we all we have it in very limited distribution now.
What we've done -- that spaces we really looked at the electronic cigarette category and the products in the market and what we see is a lot of interest in the category about smokers a lot of trial but we don't see a lot of adoption of the product.
So what we've done is is fundamentally redesigned the product to address the issues that consumers have found what that.
And really believe that we have a product that's going to deliver what the what -- consumers looking for.
And we're very excited about that we'll be expanding product as we move through the year.
How difficult is -- -- the government regulation I talked about the anti smoking laws but.
There's a lot of regulation that you have to get around it's very difficult for you to leave the market your product have to get around that.
Well I think -- elected traditional tobacco that's now regulated by the FDA.
Clearly there -- marketing restrictions but we've had restrictions in place for many years.
But if you look at the FDA.
Son who really who we don't have -- the same types of instructions around those products very good thank you so much -- small from Reynolds American thanks for joining us today.