Leaf-wrapped cigarillos continue to drive cigar sales.
By Gaelle Walker
While total cigar sales remain a little muted compared with 2022, within the category the cigarillo segment is continuing to party hard.
Cigarillos have reported ongoing growth in both the grocery and convenience channels over the past three years but particularly over the last 12 months, where they have contributed valuable profits to retailers’ tills.
The category is now worth approximately £8m a month according to JTI, whose Sterling Dual Capsule Leaf Wrapped range is currently “the fastest growing cigar brand in the UK” and commands a 92.4% share of the market according to IRi Market Place data for December 2022.
Available in smaller packs of 10, as well as 20s, the category is well met by adult smokers on a budget along with those looking to manage their consumption.
STG UK Country Director Alastair Williams is also keen to highlight the key cigarillo opportunity for local retailers, especially when it comes to flavoured products, such as its Signature Action brand.
“Our Signature Action brand is not the bestselling cigarillo on the market, but its sales have grown by over 64% in the last year,” he says.
The brand, which transitioned from Signature Dual in 2021, offers adult smokers a Virginia Blend tobacco encased in a natural leaf wrapper with a peppermint click filter.
In a bid to grow its cigarillo sales share even further this year, JTI has just launched its latest offering: Sterling Dual Double Capsule Leaf Wrapped.
The new capsule product provides adult smokers with “double the flavour” by combining two on-trend flavours – peppermint and berry mint.
Commenting on the launch, JTI Marketing Director Mark McGuinness says: “Sterling Dual Capsule Leaf Wrapped has had a strong couple of years since launching in 2019 and we wanted to build on this success by providing retailers with new flavours that respond to current trends.
“We know that 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.”
Alongside cigarillos, STG’s Williams also urges local retailers to sharpen their sights on miniatures, which remain “the engine room of the cigar category.”
“By far the biggest player here is our Signature range, which is ably supported by our Moments brand, which offers a good quality smoke at a cheaper price,” he adds.
“The cigar category remains an important part of your tobacco offer, not only for the revenue it brings into your till, but as a driver of footfall and repeat business from regular customers and the associated basket spend which goes with that. The other thing worth mentioning here is profit margins, as cigars’ are typically three times those of cigarettes.
“For example, our Moments Blue brand offers up to 18% margin when sold at its RRP, and there’s certainly not many products in the wider tobacco category that can match that,” he concludes.
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New Product Alert!
Sterling Dual Double Capsule Leaf Wrapped
JTI has expanded its cigarillo portfolio with the launch of the new Sterling Dual Double Capsule Leaf Wrapped, offering double the flavour with a combination of peppermint and berry mint capsules.
Available now across all UK channels, Sterling Dual Double Capsule Leaf Wrapped has an RSP of £6 for a pack of 10 – although retailers are free to set their own prices.
There will also be an exclusive introductory price marked pack of 10 launching at £5.70 in the Convenience and Independent channels.
The innovation joins JTI’s already successful Sterling Dual Capsule Leaf Wrapped range.
The cigarillo category has continued to grow in both grocery and convenience channels, particularly over the last 12 months, and is now worth approximately £8m a month, showcasing the category opportunity available for retailers.
Source: IRi Market Place Dec 2022
STG recently announced a fresh new look for its Moments brand.
The new pack design can be seen now on packs of Moments Blue and Moments Original, with packs of Moments Panatella following closely behind in May.
Moments Blue has been the fastest-growing value for money (VFM) cigar in the UK and according to STG is “well-known amongst tobacco-selling retailers as a popular choice amongst those customers who are looking to save money”.
“To boost cigar sales, it’s important that retailers stock the right range rather than a big range, as the top ten brands account for over 90% of sales – so don’t tie up your cashflow with slow moving brands.
“It’s also always worth reminding retailers that as cigars are exempt from the plain packaging legislation, we recommend they stock them on the middle shelf of the gantry where they are visible, and more likely to be purchased by adult smokers who can see them.”
