Time to talk to your shoppers about cigars?

Alastair Williams

Interesting research from leading cigar player STG shows that more cigarette smokers than you might think are very open to trying cigars.

One of the more interesting pieces of research in the tobacco market of the last year was a piece of work done by cigar market leaders Scandinavian Tobacco Group UK (STG UK) which examined the willingness of cigarette smokers to consider trying, and switching to, cigars. The Let’s Talk research of 1,000 UK adult smokers who visited their local convenience store at least once a week was carried out for STG by independent agency Censuswide UK and found that a lot more smokers than you might expect are open to the idea of at least trying cigars.

Alastair Williams (pictured), Country Director at STG UK, explains: “Our research from the Let’s Talk campaign into shopper purchasing habits of tobacco showed that most smokers are actually very open to trying cigars and willing to consider switching given the right factors. The research findings highlighted that 59% of male smokers who don’t normally smoke cigars would be willing to buy them. Around one third (32%) of traditionally non-cigar smoking males said they would try cigars primarily for their taste while 27% would if they were cheaper than cigarettes.”

The research also showed 79% of smokers who regularly visit a convenience store would try an alternative tobacco product, such as cigars, if it was recommended by store staff.

The Scottish Market

Within Scotland, the total cigar market is valued at £17m and here, STG UK also stands out as the clear market leader with 58% volume share of the market, worth £8.7m [IRI, Feb 2019].

Leading cigar brands in Scotland

(Ranked by Volume Share % – MAT TY; STG brands in bold)

  1. Signature Blue (previously Café Crème Blue) – 20%
  2. Moments Blue – 13.5%
  3. Signature (previously Café Crème) – 9.7%
  4. Hamlet Miniatures – 9.4%
  5. Hamlet – 7.9%
  6. Classic – 6.7%
  7. Signature Red (Café Crème Red Filter) – 6.2%
  8. Royal Dutch Miniatures – 5.8%
  9. Henri Wintermans Half Corona – 3.7%
  10. Royal Dutch Miniature Blue – 3%
  11. Signature Finos Blue (previously Café Crème Finos Blue) – 2.4%
  12. Meharis Red Orient – 1.6%
  13. King Six – 1.1%
  14. Henri Wintermans Panatella – 1%
  15. Royal Dutch Elites – 0.9%

“These insights should help to dispel any misconceptions that cigarette smokers are not open to smoking or purchasing cigars and instead highlight that they are actually very open to recommendations from convenience store staff,” says Williams.

“To make the most of this opportunity, then, it makes sense for retailers to invest some time in upskilling both themselves and their staff to grow their understanding on the different cigars available in each segment, and what type of consumer they are most suited for. In doing so, retailers will be able to offer customers the all-important guidance they need and desire, to help them make informed choices on what cigar would be right for them.”

Why should retailers make that effort? In one word: profit. Cigars have double the profit margin of cigarettes and STG estimates that retailers would earn an additional £250 cash profit for each consumer that switches to cigars.

“There is a clear chance for retailers to capitalise on this opportunity,” says Williams. “By taking time to talk to customers about their preferences and being able to offer advice on what cigars would fit their individual smoking tastes, retailers can push up their cigars sales and benefit from increased margins and higher profits.”

Williams suggests Moments Blue is a great example of a product that delivers a great quality experience at a much cheaper out of pocket spend.

Indeed, out of pocket spend was highlighted by the Let’s Talk research as the leading influencing factor on consumer tobacco purchasing decisions, ahead even of value for money.

“Given the exemption of cigars from the restrictions around minimum pack sizes and standardised packaging, cigars are now the cheapest option available on shelf, which could be a key factor in the growing consumer openness to trying cigars,” says Williams. “However, it’s important for retailers to understand that value for money means different things for different people and stock a range of cigars at different price points to help retailers accommodate varying shopper needs.”

STG UK Top Tips

Cover all segments

Make sure you include the top-selling brands from each segment as a minimum:

  • Miniature cigars: Signature and Signature Blue (previously known as Café Crème and Café Crème Blue) as well as Moments Blue
  • Panatella/Small cigars: Moments Panatella and Hamlets
  • Medium/Large cigars: Henri Wintermans Half Corona and Corona Sumatra

Know your customers

Retailers know their customers better than anyone else and there will always be regional differences in product performance. By paying attention to what customers are buying and reviewing sales data, retailers can see what’s performing well and stock their range accordingly.

Maintain stock levels

Without a doubt the simplest, but most effective piece of advice to follow is to stay stocked up. If a product isn’t in stock, consumers can’t buy it so retailers should make sure they monitor stock levels carefully to avoid this happening.