Talking Retail Grocery and product news for independent retailers
It’s also important for retailers to offer a range of cigars with different price-points and sizes to meet different consumer needs.
“Typically at Christmas time adult smokers will treat themselves and trade up,” says Nataly Scarpetta, marketing manager at Scandinavian Tobacco Group (STG UK).
“But of course this doesn’t mean retailers need to start stocking expensive Cuban cigars. It may be as simple as a miniature-cigar smoker opting to jump to a panatella, for example. In general, it is important for retailers to follow manufacturers’ guidance on pricing, as our recommendations afford value for the consumer while giving exceptional margins for retailers.”
Christmas treat
Consumers do tend to gravitate towards larger cigars as a bit of a Christmas treat when they are in a celebratory mood and have more time to enjoy them. Henri Wintermans Half Corona, with annual sales of £16m, is typically popular with smokers who have more time on their hands or are celebrating a special occasion and want to enjoy a larger cigar with a longer smoke.
To make the most of this festive opportunity, STG UK has launched a new limited edition pack for its Henri Wintermans Half Corona brand for the run-up to Christmas.
Scarpetta explains: “The new packs come in two different colour schemes, which both offer stand-out on-shelf and will appeal to adult smokers with their quintessentially British pattern and sophisticated style. Its sales traditionally go up in the run-up to Christmas, where it is regularly enjoyed as part of the festive celebrations, making these new limited edition packs perfectly timed.”
The cigarillo category has continued to grow in both the grocery and convenience channels, particularly over the last 12 months, and is now worth about £8m a month, showcasing the category opportunity available.
Manufacturer JTI has expanded its cigarillo portfolio with the launch of the new Sterling Dual Double Capsule Leaf Wrapped cigarillos. The new product is aimed at offering double the flavour with a combination of peppermint and berry mint capsules.
Flavour options
Mark McGuinness, marketing director at JTI UK, said at the time of the release: “We know berry is already a popular flavour within other categories, such as vape and heated tobacco products, so with this innovation we know we can help retailers drive incremental sales in their store.
“What’s more, the lower price-point and the fact we can offer a 10-pack, means retailers can cater to those shoppers looking for value-for-money tobacco options – something we know is important for many right now.”
Core range
In terms of a core range to maximise cigar sales opportunities, STG UK advises retailers to start with cigarillos, as they are now the biggest segment and have been the real success story of the cigar category over the last three or four years.
“Our Signature Action brand is the second biggest-selling cigarillo on the market, and also the fastest-growing at more than 41% in the last year and is proving a popular option for adult smokers who enjoy the peppermint flavour,” says Scarpetta.
While perhaps not as prevalent as elsewhere in Europe, flavoured cigars are growing steadily in popularity in the UK and this is worth highlighting. “Menthol cigarillos have exploded in popularity over the last few years, but it’s not the only flavour of choice.
“Our Signature Red Filter brand is currently the UK’s best-selling aromatic filter cigar and its smooth taste and vanilla flavour proves consistently popular with those adult smokers who enjoy an aromatic cigar.”
Limited editions
This summer, STG UK has been celebrating the 60th anniversary of Signature and has recently launched a range of limited edition packs to bring interest to the cigar category. Scarpetta says: “We have confirmed that the iconic tins are permanently returning for packs of Signature Blue 20s and Signature Original 20s.”
There’s little doubt that the ongoing cost-of-living crisis is highlighting the importance of value as a consumer trend at the moment.
Many consumers have become increasingly price-conscious and this is expected to affect cigars and wider tobacco category purchases just as much as any other category in-store, so independent retailers should make sure they are highlighting their value brands to customers to help them save money.
Larger formats
Scarpetta concludes: “This trend for value has been prevalent in the cigar category for some time now, which is evidenced by the success of our Moments Blue brand, and earlier this year we announced a redesign across the Moments range to help highlight the ‘value but quality’ message, which has been well-received by adult smokers.
“That said, undoubtedly there will still be plenty of adult smokers who will be wanting to enjoy a larger-format cigar as part of their festive celebrations, so retailers should make sure they are catering for both.”
IN NUMBERS
90% of total cigar sales come from the top 10 best-selling brands
40% of cigar sales come via impulse and convenience stores
70% share of the cigars category held by miniature cigars
Track and trace update
❚ One thing for retailers to think about is the upcoming legislation changes involving the track and trace system for tobacco, which means that from 20 May 2024 all retailers selling cigars and/or pipe tobacco must be registered with the track and trace programme.
