The U.S smokeless tobacco industry generated $2 billion of retail revenue in 1998 with approximately 5 million consumers of moist smokeless tobacco and 7 million consumers of chewing tobacco including loose leaf,twist,plug,and dry.Moist smokeless tobacco consumption approximated 50% of the total.See Table A for a description of smokeless tobacco products.While decelerating recently,the USDA reported moist smokeless tobacco has been the fastest growing segment of the tobacco industry with valume increasing at a 3.7% annual growth rate over the past 17 years compared with a 2% annual decline in cigarette volume over the same period.A.C Nielson reported that moist snuff volume grew 2.9% in 1997 and 1.2% in 1998.
A number of factors contributed to the continued growth of the moist smokeless tobacco segment. The increased prevalence of smoking bans has led consumers to switch to smokeless tobacco to circumvent smoking restrictions. Consumers perceive that moist smokeless tobacco is less of a health risk than cigarettes. Smokeless tobacco is less expensive to use than cigarettes based upon an average per-week usage measurement. Additionally,consumers have been shifting over time to moist smokeless tobacco from loose leaf chewing tobacco.While the consumer base remains primarily make (approximately 98%), smokeless tobacco use is no longer confined to the stereotypical blue collar or rural users as approximately 30% of users have attended some college. The overall moist smokeless tobacco market is expected to continue to grow at an annual rate of 1-3% ,with a large portion of the growth expected in the price-value segment.