Proposition 56 A $2 Increase in the California Cigarette Excise Tax Will Harm Legitimate Retail and Wholesale Businesses Cigarette Volume Affect Ask you Rep for POP Resources 1. Tear Pad 2. Backbar POP Optional: 3. Door Strike 4. Hanging Sign 5. Counter Mat 1 Retail locations based on CA BOE SB1400 Study, 2/19/16 https://www.boe.ca.gov/legdiv/pdf/1400sb021916cw.pdf. 2 NACS State of the Industry Report – 2014, National Association of Convenience Stores, 28th Edition, Table 9A. 3 Bill Orzechowski & Rob Walker, The Tax Burden on Tobacco, vol. 49 (February 2015); funded in part by Altria Client Services Inc. 4 ALCS Retail Experience of Adult Tobacco Consumers. June 2010. 1 I Altria Group Distribution Company l Document Owner: GLA AM l 10/06/2016 l Final I Confidential
Marlboro Multi Pack Program Details(April 4 th ) POP Steps to Success • 100% Altria Funded $0.25 per pack • ~23% 1 Pack Margin • ~12% 2 Pack Margin(Increased) • Customer will now save $_._ _ $ 5.47 when they buy 2 or 3 packs Door Strike Business Success Q1 ’16 vs. Q1 ‘15 WE 4/9 – 7/30/16 vs. SPYAGO 130 % Vol. ∆ SOM ∆ % Vol. ∆ SOM ∆ (1.0%) 0.1 2.3% 0.7 ~2.5 T-Count Increase Per Day 117 Back Bar POP(FC Provided) 109 100 9-Jan 16-Jan 23-Jan 30-Jan 6-Feb 13-Feb 20-Feb 27-Feb 5-Mar 12-Mar 19-Mar 26-Mar 2-Apr 9-Apr 16-Apr 23-Apr 30-Apr 7-May 14-May 21-May 28-May 4-Jun 11-Jun 18-Jun 25-Jun 2-Jul 9-Jul 16-Jul 23-Jul 30-Jul Source: MI Connect STARS Data YTD Week Ending 7/30/16 as of 8/19/16. Data reflects only reported vol. By PM USA direct and non-direct distributors. Mkt. defined as AGDC workload stores in the same zip code areas as key account stores, excluding key account stores. Pricing is Sourced from 7-Eleven Cost/Retail File 1 I Altria Group Distribution Company l Document Owner: GLA AM l 10/06/2016 l Final I Confidential
Copenhagen Multi Can Funding Program Details(July 25 th ) Steps to Success • Copenhagen Premium SKUs • Accept Download • 100% Altria Funded $0.20 per can • In Stock & Carry 3 Focus SKUs • ~38% 1 Can Margin • Upsell every Customer will now save • ~35% 2 Can Margin(Increased) $_._ _ when they buy 2 cans • Automatically scans via Promo Master Volume Change YTD vs. YAGO 4.5% 4.5% 5.0% 4.0% 3.0% 2.0% 1.4% 1.3% 1.0% 0.0% IND USSTC 7-Eleven Market Source: MI Connect STARS Data YTD Week Ending 8/27/2016 as of 9/7/16. Data reflects only reported vol. By PM USA direct and non- direct distributors. Mkt. defined as AGDC workload stores in the same zip code areas as key account stores, excluding key account stores. Pricing is Sourced from 7-Eleven Cost/Retail File 1 I Altria Group Distribution Company l Document Owner: GLA AM l 10/06/2016 l Final I Confidential
Marlboro Brand Management 7-Eleven Meeting October 2016
Menthol Segment Consistent Growth Marlboro Menthol Share Growth Including Product Expansions Menthol Segment Share Performance (Yearly) (Yearly) 201… 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1H 2016 Source: IRP SymphonyII Group/Capstone Projected Retail Panel Database – Total US Ending 12/29/12 IRI/MSAi Cigarettes 2016 – Total U.S. Blended Share as of 04/03/16; IRI/Capstone Projected Database, 1997-2002; IRI/ Capstone – TRP 2003 – 2007; IRI/MSAi Info Scan Cigarette 2015 – Blended as of 07/02/16
Emerging Adult Smoker 21+ Trends Adult Smokers 21+ are Adult Smokers 21-29 seeking variety and choice smoke different products in taste and flavor for different occasions Source: CATTS 3.0 – 9mm ending Dec’15; CMI
Marlboro Slate Product Packaging Promotional Support Special Price Promotion Product Promotions
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