Hello darkness, my old friend

smoking a cigar

Tobacco remains a vitally important category for all local retailers in Scotland and, despite continuing falls in sales is still a key driver of footfall, sales and profits thanks to continued innovation and development by the major players.


It may be in slow decline but tobacco is, by any definition, a key category in convenience and it looks set to remain that way long into the future. In terms of driving footfall, sales and profits the category remains among the most important of any in a typical convenience store.

It may be in slow decline but tobacco is, by any definition, a key category in convenience and it looks set to remain that way long into the future. In terms of driving footfall, sales and profits the category remains among the most important of any in a typical c-store.

The category may be under relentless pressure from all angles, but it remains almost as resilient as ever – and the major manufacturers continue to invest in supporting Scotland’s retailers with new products and innovation.

Innovation continues

A good recent example of this is the full relaunch of the JTI Advance retailer website with a fresh new look and a raft of smart new features, including for the first time a ‘chatbot’.

Found at JTIAdvance.co.uk the site has been given an overhaul with the retailer in mind, resulting in a substantially enhanced browsing experience. Originally launched in 2014, the site has over 23,000 users and is now fully mobile optimised to ensure retailers can take advantage of the insight offered whether at home, on the go, or in-store.

It features both pre- and post- log-in content to ensure key information is more accessible than ever. It also sees the introduction of the JTI Advance Bot, an interactive chatbot designed to help retailers locate the information they need more quickly and efficiently.

By optimising the website, JTI aims to further support retailers in an ever-changing market, both with legislative changes and introductions of new categories, while still including all the important previous features such as the mapping tool, price lists and category information.

Adam Perry, Digital Trade Marketing Executive, comments: “We’re constantly looking at how we can improve JTI Advance to ensure it continues to support retailers in staying up-to-date on the latest trends, NPD, industry and legislative information, accessible in the most efficient way possible.

“We’ve worked closely with retailers from the beginning to create a user-friendly site capable of communicating relevant information essential to the category. Our newly improved site has been enhanced to improve the user experience across all devices and extend the level of information available to upskill retailers and their staff.”

The website is frequently visited by retailers to access an online tool that enables them to create their own compliant customer-facing price list.

JTI has also been instrumental in communicating key legislative changes on the website through publishing information on pertinent industry news including Track & Trace and details on illicit trade.

RYO focus

JTI has also given retailers something to get excited about with the recent expansion of its popular American Spirit brand. The range now includes American Spirit Essential Blue rolling tobacco, which comes in a 30g format and a brand-new paper pouch pack, unique to the JTI portfolio.

The Roll Your Own (RYO) category shows no signs of slowing down, growing 7.6% year-on-year and generating annual sales of £2.7bn [IRI, Jul 2019], making it a must-stock for retailers.

Ross Hennessy, Head of Sales at JTI UK, comments: “We’ve responded to the market by introducing a unique offering for loyal customers. American Spirit Essential Blue provides a great opportunity for retailers to profit from this category, especially with the unique paper pouch format which is completely new to the JTI portfolio and the market.”

American Spirit Essential Blue has an RSP of £14.

Imperial Tobacco is also broadening its RYO offering with the launch of a new Lambert & Butler Roll RYO variant to help retailers take advantage of the growing value for money trend and rising demand for economy RYO products from trusted cigarette brands.

Available in both 30g and 50g formats and priced at £11 RSP and £18.15 RSP respectively, the new Lambert & Butler RYO blend offers premium quality at an economy price point. The unique blend benefits from reduced moisture levels to make it easier to roll. This has proved exceptionally popular with consumers during testing, outperforming competitor brands.

The Lambert & Butler brand was first launched in 1838 and brand awareness of Lambert & Butler is at an impressive 51% [HBT, Oct 2019], highlighting the popularity of the range within the UK.

Imperial believes brand recognition and quality are of paramount importance for any new tobacco product launches to succeed in today’s plain packaging market environment. While the move into Roll Your Own will be a first for the brand, the high consumer awareness of Lambert & Butler as a trusted, reliable brand, combined with the premium quality product and economy price point, makes this new RYO variant a must stock for retailers.

Chris Street, Market Manager UK at Imperial Tobacco, comments: “Demand for value for money is a dominant trend within the Tobacco category. As more consumers seek out the lowest out of pocket spend, we’re seeing an increasing shift away from Factory Made Cigarettes and into Roll Your Own. While offering great value for money is crucial, many consumers making the move into RYO are looking for reassurance on quality by buying products from well-known brands they can trust. With its strong tobacco heritage and brand recognition, Lambert & Butler is well placed to respond to this trend with its new RYO variant.”

Cigars

Somewhat remarkably, there is one tobacco category that is getting bigger: cigars. IRI data shows that the total UK cigar market is actually in growth by value. It may not be growing by much – just 0.9% – but it’s growth all the same.

The Miniatures segment is growing by 4.6% while the Medium/Large segment is up 2.7%. So there undoubtedly a profitable opportunity there for local retailers prepared to devote a little time and energy to the category.

Alastair Williams, the UK Country Director for Scandinavian Tobacco Group (STG) believes that the category offers retailers some unique opportunities. He says: “The UK Cigar market is worth around £200m in annual sales and the products within it typically offer three times better profit margins than cigarettes, so it’s absolutely one that is worth getting right.”

As the biggest player in the category by a country mile, STG takes its category champion status seriously and with the biggest brand of them all, Signature, it has consciously attempted to lead from the front.

“Signature (formerly known as Café Crème) is easily the biggest player in the category and Scotland’s bestselling cigar,” comments Williams.

In the independent channel in Scotland, Signature has three of the top four places making it a key must-stock brand.

In addition to Signature, STG is also seeing huge success with its Moments Blue brand, something Williams sees continuing: “Moments Blue is the UK’s fastest-growing cigar and second best-selling Miniature cigar. And we also have our Henri Wintermans Half Corona which holds the position as the UK’s favourite Medium to Large cigar.”

His advice to local retailers? Stock these three core brands and you’ll be able to meet the needs of each and every one of your cigar customers.