Reynolds American CEO Daniel Delen

With tax hikes, smoking bans, health concerns and social stigma still cutting into cigarette sales, Reynolds American Inc. and other tobacco companies are looking to cigarette alternatives for sales growth.

The nation's second-biggest tobacco company and maker of Camel, Pall Mall and Natural American Spirit brand cigarettes said the number of cigarettes it sold fell 4.4 percent to 19.4 billion cigarettes in the second quarter.
But the Winston-Salem, N.C., company sold 3.6 percent more of its smokeless tobacco including Grizzly and Kodiak and its U.S. market share of the segment grew 1.5 percentage points to 31.3 percent. Grizzly's sales volume grew 4.7 percent in the quarter and its market share grew 1.9 percentage points to 27.4 percent.

It has attributed growth of its brands to the expansion of its sales force over the last year to support both its cigarette business and its American Snuff subsidiary, which makes its smokeless tobacco products.