Startup Fortune, May 27, 2020: An up-and-coming smokeless tobacco alternative company, Black Buffalo, is positioned to take over a significant share of the moist tobacco market — aiming to convert some hard-core dip fans with its increasingly popular products so authentic that even tobacco farmers can’t tell the difference. In a growth capital fundraising round, the company successfully raised $9.75 million in a very challenging market, a testament to the way the overall tobacco alternative market is evolving to meet the needs of a changing consumer landscape.
Charging Ahead
Primary investors, Pendyne Capital, Watchfire Ventures and Open Pantry Food Marts, all see the promise in working with Black Buffalo, which is one of the first companies to offer a true smokeless tobacco alternative that is comparable to the real deal. The founders have put thousands of hours into developing an authentic brand and product, and it is paying off with the thousands of satisfied adult customers whom Black Buffalo endearingly refers to as “The Herd”.
The company is putting the new capital it has raised to good use. It plans to use a portion of the funds to complete Premarket Tobacco Product Applications to the United States Food and Drug Administration, for its entire suite of products including five long cut flavors and three pouch flavors — a step in the company’s growth plan.
Black Buffalo also has a major purchase in the works that will massively increase its production capabilities. A high-throughput pouch maker from one of the world’s top industrial manufacturers will be delivered sometime later this year, and it will help the company meet the current demand for the popular product. Black Buffalo’s pouches have been a wild success, and the company has struggled to stock the item as rapidly as it gets ordered; but the new machine is “the Cadillac” of pouch machines and is anticipated to meet the company’s needs for the foreseeable future.
As a final piece of this expansion phase, Black Buffalo plans to increase marketing to enlarge its online customer base, in addition to breaking into traditional brick-and-mortar outlets and convenience stores nationwide. This is a big step for the company, considering the fact that moist tobacco, snuff, and snus are the fourth top-selling convenience store items.
A Real Smokeless Tobacco Alternative With Serious Potential
Juul has been a preferred tobacco alternative for smokers for years, but no viable moist tobacco replacement has been available until now. Black Buffalo’s products are the first of their kind, offering a genuine smokeless tobacco alternative that looks, tastes and feels authentic. The company gives discerning dip users what they are looking for, by paying homage to the tradition and ritual of smokeless tobacco, without exposing users to tobacco leaf or stem.
The market for their smokeless tobacco alternative products is consumers 21 and over who already use smokeless tobacco. People in this bracket increasingly want to take a more conscientious approach while still partaking in the same rituals as before. Black Buffalo expects to see continued record growth as the market expands and the company branches out from offering their eight products exclusively on their website to sales in convenience stores across the country. High-profile ambassadors like MMA fighter Cowboy Cerrone have joined the herd as well.
Filling A Gap in the Market
As consumers become more cognizant of the major risks of long-term tobacco use, such as mouth, throat and digestive system cancers, as well as a multitude of other diseases involving the cardiovascular and the endocrine systems, and they see that there are other options available, there is a major market shift toward tobacco alternatives. Vaping, though controversial, has been a popular replacement for tobacco inhalation for several years now. Its appeal lies in the fact that users can get their nicotine while avoiding some of the risks and stigma associated with cigarette smoking.
The chewing tobacco industry is currently worth $7.5 billion dollars at retail in the United States alone, driven by the enjoyment of the ritual and the addictive nature of nicotine. People who chew tobacco have also been looking for alternatives; but smokeless tobacco presents a bigger challenge. The consumer base generally regards the importance of tradition as an influential quality in their decisions, and smokeless tobacco alternative products have missed the mark in the area of authenticity. Black Buffalo is the first product of its kind to truly bridge the gap between a cultural heritage and forward-movement in the market.
