|GHQ|NONFOODS FOR PROFIT
THE TOBACCO AND ELECTRONIC IGARETTE CATEGORIES are facing some possible changes in federal rules, and some definite changes in consumer preferences. The Food and Drug
Administration’s proposed deeming rule,
which would give the FDA the authority
to regulate electronic cigarettes and cigars,
is currently being reviewed by the White
House Office of Budget Management.
Meanwhile, manufacturers are facing the
more immediate task of keeping up with—
and responding to—consumer demands for
new flavors and features.
With all that is going on, industry observers say this is an interesting time for the
tobacco category at grocery.
“The tobacco segment can be challenging
for any retailer due to constant-changing
legislation, but the category still presents
ample opportunity for profit if managed cor-
rectly,” says Jessica Fratarcangelo, marketing
director for Cheyenne International, based
in Grover, N.C. “It is important to partner
with manufacturers who can be just that—a
true partner that is focused on your success.”
Fratarcangelo adds that consumers are
savvier than ever. “They realize that some-
times when you buy a high-priced product,
you’re only paying for the brand name.
They realize that quality products with
great taste are indeed offered at affordable
prices,” she says.
Cheyenne recently launched a line extension of its cigar brand with the Cheyenne
Limited Edition Tropical Cigar style.
Fratarcangelo says the new style was chosen
by adult cigar consumers. They selected the
top three styles and voted for their favorite
in the 2015 Save Your Fave Sweepstakes cam-
paign. “There is no better demand than that
of the consumer voice,” she says.
Consumers are brand loyal, says Jane
Green, vice president of marketing at
Swisher International, based in Jacksonville,
Fla. That can help grocery stores that sell
other tobacco products. “Tobacco consumers value a retailer that appreciates their
business,” says Green. “While grocery may
not be a destination stop for many OTP
shoppers, catering to your clientele will
keep them loyal to your store and increase
frequency of those visits.”
In March, Swisher added to its Swisher
Sweets Limited Edition cigarillos with
Swisher Sweets Cherry Dynamite. “Cherry
is a favorite taste and we have had many
consumers ask, ‘Why don’t you offer a
cherry cigarillo?’” says Green.
While price is important, consumers also
want quality and consistency. Green notes
that Swisher’s “2 for 99-cents” cigarillo
pouches are very strong sellers. “Everyone
loves value,” she says.
Price is a big consideration for adult
smokeless tobacco consumers too, says Dave
Savoca, president of Smokey Mountain
Chew, based in Sandy Hook, Conn. “The
smokeless tobacco category has really
Tobacco and electronic cigarette manufacturers
are innovating to meet consumer demands.
BY NORA CALEY
UP IN SMOKE…