GHQ NONFOODS FOR PROFIT
NOT JUST SMOKE, OR VAPOR,
Despite new rules and industry consolidation, the tobacco and electronic cigarette categories remain strong.
BY NORA CALEY
FACED WITH NEW RULES, company mergers and changing consumer preferences, the tobacco and elec- tronic cigarette categories are adapting. Manufacturers are developing new flavors, devices and other innovations, while still making sure retailers can succeed in the category.
According to IRI, a Chicago-based mar-
ket research firm, U.S. multi-outlet sales of
cigarettes for the 52 weeks ended Oct. 30,
totaled more than $14.6 billion, up 2.9 percent
compared to the same period the previous
year. Unit sales totaled more than 1.3 billion,
down 1.5 percent. The average price per unit
increased 46-cents to $10.81.
Sales of electronic smoking devices were the
opposite scenario. Dollar sales were down 5. 8
percent to $126.4 million, while unit sales were
up 2.8 percent to nearly 13. 8 million. The average price per unit was down 84-cents to $9.17.
Earlier this year the U.S. Food and Drug
Administration (FDA) announced the long-awaited deeming regulations, which refers
to the FDA’s decision to extend the agency’s
authority to e-cigarettes and other products
such as cigars and pipe tobacco. The rules
include a minimum purchase age of 18, a prohibition against free samples, and beginning
in 2018, a new warning statement on labels.
Manufacturers say the rules will create
some challenges, but the future is still bright.
“While increased regulation by the FDA will
likely cause some consolidation in brands, the
reputable and reliable companies will be left
standing,” says Jessica Fratarcangelo, market-
ing director for Cheyenne International, based
in Grover, N.C. “Grocery retailers should feel
confident in the manufacturers they do busi-
ness with and as such, make regulatory issues
a point of discussion. Despite impending
changes in the industry, there is still a lot of
room for opportunity.”
Cheyenne International launched the
Cheyenne Tropical Cigar, which Fratarcangelo
says has been so successful that the company
decided to take it from a Limited Edition
item to a permanent item in the brand lineup.
“The distribution continues to grow and we’ve
received a lot of positive feedback from con-
sumers who are looking for options in the fil-
tered cigar category,” she says. The company
also plans to release a new cigar product in
first quarter 2017.
According to IRI, cigar sales were up 2.9
percent to $367.4 million, and unit sales were
up 12. 5 percent to 128. 4 million.
This month Swisher will add Swisher Sweets
Mango to its everyday line-up. Officials for
the Jacksonville, Fla.-based company say
the Mango blend has been well received in
Limited Editions, and more recently in the
natural leaf Optimo Cigarillos. Swisher Sweets
Mango Cigarillos will be available at three
price points: two for 99-cents, two for $1.49,
and save on two.
In the smokeless tobacco category, IRI