british american tobacco p.l.c. annual report 2008 - Growth - International Brands performance

 
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British American Tobacco p.l.c. Annual Report 2008

Strong performance of Global Drive Brands

187 billion cigarettes sold in 2008
+16% volume growth

Our GDBs grew by 16 per cent or 25 billion cigarettes in 2008, leading our growth in the premium segment. Almost a quarter of the rise was attributed to brand migrations.

Global Drive Brand volume growth

Our premium organic volume grew by 5 per cent, while VFM volumes grew by over 4 per cent in the year.

Total Group volumes increased to 715 billion, up 4 per cent, due to a combination of organic volume growth of 1 per cent and the benefits of the Turkish and Scandinavian acquisitions.

Dunhill

Dunhill brand logo37 billion cigarettes sold in 2008
+7% volume growth

2008 was another good year for Dunhill. Continuing its growth in volume, share and value terms, it delivered accelerated margin growth due to an improved product mix.

Innovation and modernisation continues to build consumer preference for Dunhill as the ‘perfectionist in tobacco’. A new packaging variant was launched in Taiwan, the exclusive Reloc® resealable pack, to positive consumer response. The new Dunhill Fine Cut variant continues to see good performance.

Overall, the Dunhill cigar business grew by 48 per cent. This was achieved by delivering an exceptional quality product and by expansion into new markets. The Dunhill tobacco expertise was also reaffirmed in 2008 when the Dunhill Signed Range cigar won excellent ratings in various prestigious cigar publications.

Kent

Kent brand logo63 billion cigarettes sold in 2008
+18% volume growth

Kent had a very strong year, its sixth consecutive year of double-digit growth. With annual sales surpassing 63 billion cigarettes, Kent is our largest premium brand.

Kent continued to record strong volume growth in Russia and also benefited from successful brand migrations in South Africa and Malaysia, increasing Kent’s presence in Africa and Asia.

Kent’s role at the forefront of innovations continues. Kent Nanotek, a superslim king size variant, was a strong performer in 2008. Nanotek is sold at a premium relative to the Kent main range and achieved significant volume sales in 2008, representing some 10 per cent of Kent’s global sales volume. Kent Mintek also yielded positive growth in Japan, Hong Kong, Chile and Malaysia.

Lucky Strike

Lucky Strike brand logo25 billion cigarettes sold in 2008
+9% volume growth

Lucky Strike saw another year of solid growth, achieving significant volume and share growth in France, Spain and Italy. The brand also saw double-digit volume growth in 7 of its top 10 markets.

Lucky Strike is particularly successful among Adult Smokers Under 30, accounting for more than 60 per cent of its sales. We focus on maintaining popularity in this segment by delivering packaging options and taste experiences that consumers value, such as the ‘Barrel Blend’ introduced successfully in Latin America.

The introduction of Lucky Strike mentholated variants Piperita and Nites continues to yield positive results for the brand in Germany, Brazil, Peru and Hong Kong.

This year Lucky Strike successfully expanded its offer in France to include roll-your-own. The variants Full and Smooth Taste were launched in Germany to positive consumer response.

Pall Mall

Pall Mall brand logo62 billion cigarettes sold in 2008
+22% volume growth

Pall Mall delivered a strong performance in 2008, driven by good organic volume and share growth in established markets such as Romania, the Netherlands, Uzbekistan and Turkey. The brand also continues to grow geographically and is now present in more than 80 markets.

Brand migrations played a significant part in Pall Mall’s growth – notably sizeable migrations in Mexico and Pakistan. Migrating consumers from under-performing brands to 1 of our GDBs reduces operational complexity for us and our trading partners.

The Pall Mall range expanded further with the introduction of variants such as Virginia Fine Cut, Krystal-Frost and Extra Kings, as well as snus. Value pack formats were also introduced across western Europe and Australasia, helping drive growth across all tobacco categories where the brand competes.

Other International Brands

143 billion cigarettes sold in 2008
+1% volume growth

In addition to our GDBs, we also support a set of other International Brands, accounting for over 20 per cent of our volumes in 2008. Several of these brands saw good volume growth, notably Kool in Japan, State Express 555 in China and Asia Pacific Global Travel Retail, John Player Gold Leaf in Bangladesh, Pakistan and the Gulf Cooperation Council countries, and Rothmans in Egypt.

Other International Brands volume growth

 

Kent Nanotek

Kent Nanotek builds on the success of our Kent Global Drive Brand and comes with a specially designed contemporary style of pack. It sells at a premium relative to the Kent main range, offering an innovative cigarette in a superslim king size format.

Nanotek is available in 3 variants to suit the different preferences of adult consumers. Volumes have grown by an impressive 300 per cent in 2008 to more than 6 billion cigarettes. It now accounts for some 10 per cent of Kent’s global volume.

We launched Kent Nanotek in 16 markets in 2008, bringing the total number of markets where it is now available to 31. It is also sold through Global Travel Retail. It has performed very strongly in eastern Europe during the year, particularly in Russia, Romania and Ukraine.

GDB volume growth in 2008:
+16%
 
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