Value and quality key to tobacco success


The pandemic has accelerated an existing trend that sees shoppers keener than ever to secure maximum value and minimum out-of-pocket spend – but they’re not keen to sacrifice quality.

For all the challenges it has faced over the years, and for all the doom and gloom that often seems to surround the category, tobacco remains a huge and extremely resilient category for local retailers in Scotland.

“The UK Tobacco market is worth £2bn,” says Duncan Cunningham, UK Corporate Affairs Director at Imperial Tobacco & blu. That’s a chunk of change and means that it’s a category that retailers literally can’t afford to lose focus on.

Like most categories over the last 18 months or so, it’s an evolving one, and like many other categories, the direction of travel is firmly towards the value end of the spectrum.

“The category remains heavily price driven,” says Cunningham. “It’s a trend that we’ve seen developing in recent years and we’re also seeing continued moves towards more of a nicotine portfolio approach with adult smokers buying different RYO and factory made cigarettes (FMC) products to suit different occasions. In fact, [Imperial Tobacco] figures show a quarter of consumers are now dual smokers.”

While many smokers may be experimenting with the nicotine products available across segments, shopper demand for value continues to dominate buying habits in tobacco overall.

Cunningham says: “This is a trend we expect to continue and grow in 2021 and beyond. With this in mind, retailers must be well-equipped with a strong product range across all categories in order to cater for this trend and keep one eye on their sales so they can adapt their range to meet the needs of their customers.”

In reality, that means many shoppers are down trading from premium brands to more value focused offerings. Needless to say, the kay manufacturers have been busy developing a refreshed range of products across both the RYO and FMC segments that offer the great value shoppers are looking for, but with the premium features they’ve become accustomed to.


For many shoppers, the solution has been RYO. Imperial Tobacco estimates that 45% of all tobacco sales are now RYO – and sales are growing at 30%. In line with a growing demand for value, sales in the Economy RYO segment are also rising.

“Lambert & Butler RYO benefits from 120 years of premium brand heritage and has become our fastest growing rolling tobacco brand,” says Cunningham. The range now includes an improved freshness seal, plus the addition of filter tips and high-quality papers. We’ve also launched limited-edition outer designs as part of the range exclusively for the independent channel to celebrate one year of Lambert & Butler RYO in the market, which are available to buy in both 30g and 50g formats with RSPs of £12.80 and £21.00 respectively.”

Other recent innovations include the launch of JPS Players Easy Rolling Tobacco, a new blend of fine cut tobacco that offers an easier rolling experience, and the launch of Gold Leaf Carnival Edition Papers and an improved click and close pouch feature, two new offerings from the number one Traditional RYO brand in the economy sector.

Launching this month, the new limited-edition papers will be available in Gold Leaf 30g pouches until the end of September with an RSP of £12.80 for the Gold Leaf 30g pouch including the limited-edition papers.

Recently, JTI celebrated 30 years of Amber Leaf and 10 years as the UK’s No.1 RYO brand.

The brand holds over a quarter of the RYO market and continues to generate good cash margin. Amber Leaf original is available in a 30g pouch, a 50g pouch and a 3-in1 box format. Each include hand stripped, fine cut Virginia blend tobacco, 100 premium quality cigarette papers and 77 filter tips. Alongside the original, the Amber Leaf range also includes the Blonde 30g Box, a smoother tasting version.

Ross Hennessy, Head of Sales at JTI UK, says: “We are incredibly proud of Amber Leaf reaching these two major milestones in 2021. Since it was introduced 30 years ago, the brand has gone from strength to strength and we cannot thank retailers enough for helping retain its position as the No.1 RYO brand for the last 10 years. We’re looking forward to supporting retailers in the years to come with this iconic brand in the tobacco category.”

Also good news for retailers was the recent announcement by JTI that it was repositioning its Kensitas Club Rolling Tobacco exclusively in Scotland with the lowest RSPs for a 3-in-1 rolling tobacco product in the UK.

Kensitas Club Rolling Tobacco offers the same quality and convenient tobacco product in easy-to-use formats as previously sold, but with a better value price.

“We know that for many existing adult smokers, price is a key factor when deciding what brand to purchase,” explains Hennessy. “By repositioning the Kensitas Club Rolling Tobacco range in Scotland, it allows retailers to capitalise on the brand’s momentum and success over the past 100 years, as well as tap into the growing RYO segment. We’re confident that the price drop will provide Scottish retailers with an even more competitive product for existing adult smokers and drive incremental sales.”


While RYO is leading the growth charge, cigarettes still account for the majority of tobacco sales with a 52.7% share of the market, according to Imperial Tobacco. The key trend here is also value for money and minimised out of pocket spend.

“Our most recent FMC innovations include our new Embassy Signature range where everything is premium except the price,” says Cunningham.

The Embassy Signature range launched with Gold and Silver variants with an RSP of just £9.50, plus Embassy Signature Gold in packs of 100 at an RSP of £47.50. Embassy Signature Gold Superkings was next to join the line up as a straight swap for Embassy No.1 Red Superkings and the latest addition to the range is Embassy Signature New Crush featuring a unique cooling sensation filter.

Leaf Wrapped

Another trend about to fully burst into life is the leaf wrapped cigarillo category. Huge in America, the category has slowly been building momentum in the UK.

Earlier this year JTI launched Sterling Dual Capsule Leaf Wrapped in a new 20s format – an extension to the already successful king size cigarillo product, which is the best-selling and fastest growing cigarillo within the UK market [IRI, Dec 2020].

Hennessy comments: “The Sterling Dual Capsule Leaf Wrapped 10s range has gone from strength to strength since its launch, so we were pleased to be giving retailers even more choice for their customers. With this 20s extension, we expect the product to follow the same route as the 10s.”

Alastair Williams, Country Director at Scandinavian Tobacco Group UK (STG UK), also sees a great opportunity for retailers in this area: “The last 18 months have seen the emergence of cigarillos which have proved a very popular addition, due to their flavour profile, convenience and low price point.

“Our own Signature Action filter cigarillo is growing steadily in popularity and is currently on promotion offering the lowest price in the segment with an RSP of just £3.99 for a pack of 10.”


Very few segments of the tobacco category can claim to be in growth, but cigars is one of them. “The retail sales value of the cigar category in Scotland increased by 5.2% in March this year,” says Williams.

A remarkable achievement, even if volumes with down very slightly by 0.2%. And it’s miniatures that continue to dominate the market accounting for nearly three quarters of all sales. STG itself accounts for 57% of all cigar sales and owns the top two brands in Scotland in Signature Blue and Moments Blue.

But while miniatures account for the lion’s share of sales, Scotland does appear to be missing a trick on larger cigars for some reason, as Williams highlights: “I do want to flag a UK-wide trend which isn’t yet being reflected up in Scotland and that is the growth of the medium / large cigar category, which is up 23.4% in value and 17.4% in volume in the last twelve months [IRI, May 2021].

“This is being led by our Henri Wintermans Half Corona brand, whose sales value has risen by over 25% in value terms, but this is not being seen north of the border and could well be a good opportunity for Scottish retailers to capitalise on.

“We’ve all been through a very trying time of late, and many of us will be looking forward to a summer of celebration as restrictions ease and ‘normal life’ resumes, so for some adult smokers that may well include trading up to a larger format cigar so stock up and don’t miss out on those additional sales.”

Williams also highlights the fact that the value trend has affected cigars just as it has affected RYO and cigarettes. “Value has been a consistent trend in cigars for quite some time which is evidenced by the success of our Moments Blue brand, which offers a quality smoke at a low price, and is now the second best-selling miniature cigar brand in both Scotland and the UK as a whole, after Signature Blue,” he says. “With the added impact of the pandemic on the economy for the foreseeable future, I would imagine this move towards value will only increase.”

With that in mind, STG has just launched a new pack format for its Signature Red Filter brand, the UK’s best-selling aromatic filter cigar. The new pocket-friendly sized pack comes with the low out of pocket price of just £5.79.

STG’s UK Brand Activation Manager Clara Maria Endresen comments: “We know consumers are increasingly looking for more compact and convenient formats so we anticipate this change will be well received, particularly at the new reduced price point. The ‘Filter and Flavour’ segment and in particular vanilla, grew approximately 8% between 2018-2020 so there is increasing demand for this type of cigar, and we recommend that retailers stock up to meet the expected demand.”

Accessorise your profits

Gavin Anderson

With RYO tobacco still among the brightest performers in the tobacco category, there’s plenty of scope for retailers to boost their profits with high margin accessories, says Gavin Anderson of Republic Technologies.

In a category like tobacco where margins are notoriously tight on most products, the opportunity to grab some extra high margin sales is one not to miss. That’s certainly the view of Gavin Anderson, Head of Sales at Republic Technologies (UK), the company behind cigarette paper brands like Swan, Zig-Zag and OCB, the fastest-growing mainstream paper brand in the UK [IRI, May 2021].

“With demand for RYO accessories at an all-time high, the quality, choice and value we offer is contributing to the strong growth of the sector,” says Anderson.

Scotland’s tobacco accessories market is now worth almost £30m, with a YOY growth of 3.5% [IRI, May 2021], placing increased pressure on suppliers to innovate to make their mark in the category. For Anderson, it’s both the expansion of the RYO category itself and a wave of NPD that has helped trigger more growth in accessories.

“The fact that people have access to a raft of NPD is helping to maintain really strong levels of demand in the category,” he says. Much of that NPD was sparked by last year’s menthol ban. “In February, Republic Technologies launched Swan Flavour Fusion Cards, available in two variants: Fresh Burst and Menthol,” says Anderson. “Building on the successful launch of our Swan Crushball filters last spring, our new Flavour Fusion Cards enable retailers to offer shoppers even more choice in flavour and format.”

Another evolution in recent times has been the growing importance of environmental considerations to shoppers, with an increase in demand across all categories for more natural products, reduced packaging and removal of single-use plastics.

“This has led to a surge in demand for category-boosting products such as OCB Virgin and OCB Organic Hemp, which are 100% vegan, unbleached papers and made using OCB natural gum which is sustainably sourced from African acacia trees,” explains Anderson. “Both are available in Papers and Slim & Tips formats and OCB is now the fastest-growing mainstream paper brand in the UK.”

But it’s not just NPD that is helping Republic to “its best ever year” – and that’s on top of a record year last year.

“We’ve been listening to retailers harder and more often”, says Anderson. “We’ve changed the way we call on retailers and restructured the sales team with a stronger focus on Scotland. The structure of the team is also much clearer to our customers in Scotland. We’ve been hitting towns and cities across Scotland hard and that has helped us help retailers grow their sales, as well as driving up distribution.

“We’ve also been holding trade days in cash and carry depots and we’ve been calling on wholesalers and multiple independents to ensure they’re up to speed with the latest developments in the category.”

Some of that feedback the team have been getting from retailers has led to some interesting new ideas, like the creation of new attention-grabbing clip strips.

“Obviously we have different challenges in Scotland from the ones we face elsewhere in the UK, because of the nature of the display ban up here,” says Anderson. “But the clip strips have been hugely popular with retailers able to both merchandise utility and candle lighters on the shop floor without losing any sales space and flag up to customers that the store stocks all the accessories they’ll need.”

So, there’s never been a better time to take a fresh look at your accessories range to make sure that you are ready to cash in on extra sales in a growing category.