Capturing the Herd
Every good story starts at the beginning, and the story of Black Buffalo starts with edible leafy greens (think kale, collard greens, or cabbage)—yes, the same kind you chop up for a salad or throw into your smoothie. Leafy greens are not the typical start to most stories, and certainly not a typical start to a moist smokeless tobacco (MST) alternative product, but that edible leafy green is what makes Black Buffalo’s origins so unique, and its products a standout in an increasingly crowded category.
LET’S START AT THE BEGINNING
Mark Hanson, co-founder of Black Buffalo, had a dilemma. Like many adult tobacco consumers, he found he was dipping MST too often, and he wanted to quit. He surveyed the market to find an alternative product to the hard stuff and, ultimately, found the industry to be woefully lacking in both quality and variety, so he decided to make his own alternative to MST.
After five years and over 20,000 of hours of research and development, Hanson, with the help of his co-founder Jeffery David, finally landed on a variety of edible leaves in the cabbage family, and this plant species, when grown, harvested and processed according to Black Buffalo’s methods, behaves just like tobacco across every important dimension—texture, aroma, color, flavor—except Black Buffalo’s leaves have no naturally occurring nicotine or other unwanted compounds specific to the tobacco plant.
“MST is a crowded category that seemingly differentiates itself just by brand alone, so a new brand was important, but we also knew product quality was important. Product differentiation in this market is exceptionally important, and that’s where we differ,” said Matt Hanson, chief growth officer, Black Buffalo.
Black Buffalo’s green leaves start by being flue-cured, which means they are dehydrated under humidity and forced air, which turns the leaves from green into the same golden color as a dehydrated tobacco leaf. The flue-cured leaf has sensory properties that are amazingly close to those of a dehydrated tobacco leaf, said Hanson.
“Looks like it, smells like it, handles like it, even tastes like it, and importantly, our leaves are not fire-cured,” he said.
Fire-curing is a method that many other tobacco manufacturers use to create their MST products. This method imparts a dark brown color and campfire aroma to the tobacco; however, it can introduce unwanted constituents to the leaves. Black Buffalo achieves the same look and aroma as traditional tobacco by adding food-safe color and flavor, and then adds to its products pharmaceutical-grade, tobacco-derived nicotine.
“We have replicated the very best of what people love about traditional dip, which is the flavor, the aroma, the pack, the nicotine, and we’ve eliminated what people don’t like about it, which is the tobacco leaf material. Black Buffalo is offering a better product without sacrificing the ritual or experience of traditional products,” said Hanson.
COMING AT YOU, C-STORES
Black Buffalo was founded in 2015, but the company’s foray into the convenience store industry didn’t happen until January 2022. Average sales for other tobacco products in c-stores grew 7.2% per store, per month last year, and smokeless tobacco increased 8.5% in gross profit over the previous year, according to NACS State of the Industry data. Why did Black Buffalo wait to tap into this lucrative market?
Hanson explains the biggest reason was because, before early 2022, Black Buffalo simply wasn’t ready for convenience.
“There are dozens, if not hundreds, of decisions you have to make across wholesale and retail to execute properly, and we were only going to launch into c-stores when we were ready,” he said. “We realized that, if we didn’t measure up to expectations for supply chain, logistics, demand forecasting and sophisticated go-tomarket strategies, we may not get in again.”
So Black Buffalo waited for the opportune moment to enter the convenience store industry. That moment was the 2021 NACS Show, and Black Buffalo signed its first c-store partner—Yesway/Allsup’s, which began selling Black Buffalo’s products in January 2022.
Prior to attending last year’s NACS Show, Kevin Harder, a senior category manager at Yesway/Allsup’s, had extra space in the company’s OTP sets, and he wanted to fill the void with a “tobacco/nicotine alternative product that wasn’t just another white pouch,” he explained.
“While doing research, I came across Black Buffalo and saw that they only had online distribution but was truly intrigued by their story and the unique appeal of their product,” he said. “I was even more impressed after meeting the Black Buffalo team in person at the NACS Show and witnessing their passion for their product.”
That in-person introduction between Black Buffalo and Yesway/Allsup’s is what Hanson says is one of the most important benefits of attending the NACS Show.
“The NACS Show is really important for that brand expression because people get to see what the products are all about,” said Hanson. “[Brands] get to shake hands with retailers, wholesalers, brokers and people who are decision makers that can’t be done over Zoom, can’t be done over a phone call, certainly can’t be done over e-mail.”
FEEDING THE ‘HERD’
Harder said that, in addition to meeting the Black Buffalo team, the company’s products also drew him in.
“A high-quality, unique product, with unrivaled taste and texture, an appealing packaging and product messaging, as well as an intriguing brand story and an already loyal customer base combined with a passionate team is a recipe for success,” he said.
That loyal customer base is affectionately called “the Herd,” and Harder said the feedback from Yesway/Allsup’s customers has been extremely positive.
“Our store employees regularly share interesting stories of customers who have enjoyed the products so much that they are becoming loyal members of the Black Buffalo ‘Herd,’” said Harder.
Hanson said what really sets Black Buffalo apart from other smokeless tobacco alternative products is its ability to replicate the longcut MST experience.
“Long-cut is naked to the world. It reveals all of its flaws ... and it’s very difficult to replicate,” said Hanson. “You’ve got dozens of different characteristics that make up a tin of long-cut moist smokeless tobacco, and we have figured out a way to replicate that through a whole variety of proprietary processes.”
Although Black Buffalo’s core demographic is the long-cut MST buyer, the company’s MST pouches “sell like crazy, too,” according to Hanson, and their sales are nearing half of Black Buffalo’s business.
We have replicated the very best of what people love about traditional dip, which is the flavor, the aroma, the pack, the nicotine, and we’ve eliminated what people don’t like about it, which is the tobacco leaf material."
The future appears bright for Black Buffalo. During its last capital funding round, The Pritzker Organization joined as Black Buffalo’s lead investor.
This is big news. The Pritzker Organization was an owner of the company formerly known as Conwood, a smokeless tobacco manufacturer with brands including Grizzly and Kodiak (and now known as The American Snuff Company). Conwood was sold to Reynolds American Inc. in 2006 for a multibillion-dollar price tag.
Hanson said, “To have The Pritzker Organization back us as our lead investor was a very important marker for us. They have an excellent reputation for investing in best-in-class companies with strong management teams and rapid growth prospects.”
IT’S ALL THE SAME
What Black Buffalo prides itself most on is its ability to replicate the ritual and experience of MST products.
“You don’t need to give up what you love about dip,” Hanson said. “You can have the best of all worlds just by starting with a different leaf and by using different methods of processing.”
Hanson said Black Buffalo’s products sit between two different areas within the other tobacco products category: MST and modern oral nicotine, the latter of which consists primarily of white pouches filled with powdered, nicotine-containing mixtures. “We are solidly anchored in the soil that is the millions of consumers who love MST as a category, and yet we are in many ways a modern oral nicotine company because our delivery mechanism for nicotine is not the tobacco leaf,” he explained.
Hanson said the company is capturing a substantial demographic of people who have attempted to switch from using traditional MST products and tried modern oral nicotine as a potential off-ramp but weren’t successful due to factors such as lack of flavor, no long-cut option or an inability to replicate the experience and ritual of traditional tobacco—a nod back to why Black Buffalo was founded.
“Our stores service a lot of smaller towns with adult smokeless tobacco customers looking for alternatives to their current products,” said Harder. “Black Buffalo provides the premium look and feel, the pack and the taste of traditional smokeless tobacco just without the actual tobacco leaf, and our customers are taking notice.”
“Ritual and tradition for us are extremely important, and that’s what we’re trying to deliver to the consumer,” Hanson said.