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Category Management Handbook

Tobacco: Cigars 2016

Where the Gains Are

According to IRI, c-store dollar sales of cigars rose nearly 6 percent in 2015 to reach more than $2.6 billion, with units up 9 percent. The channel's performance dwarfed that of food and especially drug, which saw double-digit sales declines (likely because of CVS' exit from the tobacco business). 

A Nielsen database of 25 large c-store chains representing about 14,000 stores show most cigar types growing, with sweet, natural and unflavored varieties up by the double digits in the 52 weeks ending Dec. 19, 2015. Unit sales of foil pouches were up more than 24 percent. For little cigars, unit sales dropped nearly 4 percent. 

Cigar Sales: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

Segment

TypeUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
Pipe90.83.8%$86.23.6%
Sweet89.110.7%$52.56.7%
Flavored83.03.5%$46.60.6%
Natural leaf55.219.2%$45.17.8%
Unflavored16.619.9%$9.016.5%
Premium0.4(13.0%)$1.916.6%

Pack Type

Pack sizeUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
Foil pouch197.624.4%$109.221.4%
Single72.0(11.2%)$70.0(9.6%)
Pack65.3(4.8%)$62.2(0.7%)

Little Cigars

Little Cigars206.20.0%$32.4(3.7%)

Sources: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores


Channel Comparison: Cigars

52 weeks ending Dec. 27, 2015

ChannelDollar sales ($ millions)PCYA*Unit sales (millions)PCYA*
C-stores$2,613.85.8%1,757.89.0%
Multioutlet***$349.7(6.7%)115.012.4%
Food$97.5(1.5%)41.66.0%
Drug$57.2(35.1%)16.4(27.2%)

Source: IRI | * Percent change from a year ago | *** Includes supermarkets, drug stores, mass market, military commissaries, and select club and dollar retail chains


Distributor Data: Cigar Shipments

Calendar year 2015

McLane average shipments of cigars per store per week rose more than 7 percent in 2015. 

SegmentAPSW**** (in dollars)APSW dollar growthPCYA*
Cigars, singles$129.12$10.148.5%
Cigars, packs$65.18$2.694.3%
Cigars, little packs$14.77$0.241.7%
Cigar wraps$4.85$0.183.8%
Little cigars, singles$3.73$1.6983.1%
Total Cigars$217.64$14.947.4%

Source: McLane Co. | * Percent change from a year ago | **** Average shipments per store per week


"OTP was once a category that could generally satisfy customer demand with a core set of items. Today, there are thousands of items and even more customer preferences."Matt Hieb, OTP Category Manager of the Year Award winner


Pack-Type Trends: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

According to the Nielsen large-chain database, pouch packages took 59% share of cigar volumes and more than 45% share of dollar sales.

Sources: The Nielsen Co., Swedish Match North America | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores


Cigar Singles and Packs by UPC: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

According to Nielsen's large-chain database, the top-selling foil pouch UPC was Swisher Sweets Sweet 2 for 99 cents. 

Foil Pouch

UPCUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
Swisher Sweets Cigarillos Sweet 2 for 99 Cents35.185.8%$17.286.1%
White Owl Cigarillos White Grape 2 for 99 Cents8.1(15.1%)$4.0(15.3%)
Swisher Sweets Cigarillos Sweet Save on 27.8(28.0%)$6.3(20.5%)
Swisher Sweets Cigarillos Tropical Fusion 2 for 99 Cents6.827.0%$3.427.1%
White Owl Cigarillos Sweet 2 for 99 Cents5.3(16.1%)$2.6(16.4%)

Singles

UPCUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
Black & Mild Plastic-Tip11.30.0%$13.10.0%
Black & Mild Jazz Plastic-Tip 79-cent6.90.1%$5.40.1%
Black & Mild Jazz Wood-Tip 79-cent6.40.2%$5.00.2%
Black & Mild Original-Tip 69-cent5.10.0%$3.50.0%
Black & Mild Wine3.80.0%$4.50.0%

Packs

UPCUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
Black & Mild Original-Tip 5-Pack11.33.8%$11.44.1%
Swisher Sweets Cigarillo Sweet 5 for the Price of 3 Pack9.7(19.7%)$6.7(15.3%)
Backwoods Sweet & Aromatic 5-pack5.012.9%$5.818.0%
Black & Mild Wood-Tip 5-pack4.31.2%$4.72.0%
Black & Mild Wine 5-pack3.43.6%$3.53.0%

Source: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores


$2.6 billion - C-store sales of cigars in 2015, per IRI


Flavor Trends: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

Volume and Dollar Share by Type

Pipe and sweet varieties of cigars had nearly the same volume share, according to Nielsen’s large-chain database.


Top Flavors by Volume

Sweet and tropical flavors saw the biggest volume gains in Nielsen's large-chain sample. 

TypeVolume sales (millions)PCYA*Volume share
Sweet100.510.6%40.1%
Tropical28.915.2%11.5%
Grape25.8(0.3%)10.3%
Wine19.7(0.8%)7.9%
White grape17.5(23.3%)7.0%
Blueberry9.5(1.4%)3.8%
Strawberry6.0(4.9%)2.4%
Pineapple5.7130.8%2.3%
Casino5.2983.8%2.1%
Mango4.720.2%1.9%

Flavored-Cigar UPCs

The 2-for-99 cets Swisher Sweets cigarillo was the top flavored-cigar UPC by unit sales, according to Nielsen's large-chain database. 

UPCUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
Swisher Sweets Cigarillo 2 for 99 Cents Pouch35.185.8%$17.286.1%
Swisher Sweets Cigarillo 5 for the Price of 3 Pack9.7(19.7%)$6.7(15.3%)
White Owl Cigarillo White Grape 2 for 99 Cents Pouch8.1(15.1%)$4.0(15.3%)
Swisher Sweets Cigarillo Sweet Save on 2 Pouch7.8(28.0%)$6.3(20.5%)
Black & Mild Jazz Plastic-Tip (79-cent)6.913.4%$5.413.4%

Sources: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores


Units and Dollars by Pack Size: 25 Large Chains**

C-store sales, 52 weeks ending Dec. 19, 2015

Small foil pouches had more than one-quarter of unit share and more than 45 percent of dollar share in cigar sales for the large chains in Nielsen's sample. 

Pack TypeUnit volume (millions)PCYA*Unit shareC-store sales ($ millions)PCYA*Dollar share
Small foil pouch92.325.7%52.7%$108.921.4%45.1%
Small pack67.8(9.2%)38.7%$64.7(9.2%)26.8%
Small single12.0(4.5%)6.9%$57.1(0.3%)23.6%
Large single2.1(26.6%)1.2%$5.2(14.9%)2.2%
Large pouch0.9(6.6%)0.5%$5.2(5.0%)2.1%
Large foil pouch0.12.3%0.1%$0.28.8%0.1%

Source: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Including UPCs/brands/families not shown


Little-Cigar UPCs: 25 Large Chains

C-store sales, 52 weeks ending Dec. 19, 2015

The 305's Littles Menthol carton was the top UPC by units in the large-chain Nielsen sample.

UPCUnit sales (millions)PCYA*C-store sales ($ millions)PCYA*
305's Littles Menthol 10 20-pack carton88.84.8%$0.65.0%
305's Littles Full Flavor (20-pack)19.20.4%$1.31.0%
Swisher Sweets Littles Regular (20-pack)12.2(1.3%)$3.40.1%
Cheyenne Filtered Cigars Menthol (20-pack)8.9(13.7%)$1.0(16.0%)
Cheyenne Filtered Cigars Full Flavor (20-pack)7.3(15.6%)$0.9(17.6%)
305's Littles Gold (20-pack)7.3(5.5%)$0.5(5.5%)
305's Littles Full Flavor 10 20-pack carton7.311.9%$0.415.9%
Talon Little Cigars Sweet (20-pack)6.621.6%$0.524.5%
Cheyenne Filtered Cigars Wild Cherry (20-pack)5.8(9.9%)$0.7(11.0%)
Talon Little Cigars Regular (20-pack)5.615.9%$0.519.9%
Total286.1(1.9%)$32.4(3.7%)

Sources: The Nielsen Co., Swedish Match North America | * Percent change from a year ago | ** Including UPCs/brands/families not shown | *** Nielsen Large Convenience Chain store-level database of 25 chains comprising ~14,000 stores


Cross-Category Opportunity

According to an analysis of c-store point-of-sale data by Management Science Associates, cigars ranked among the top 10 items purchased with many core categories. They include: 

  • General merchandise (No. 5)
  • Packaged beverages (No. 6)
  • Fuel (No. 7)
  • Prepaid cards (No. 8)
  • Lottery (No. 9)
  • Cigarettes (No. 10)

9.0% - Increase in unit sales of cigars at c-stores in 2015, according to IRI


Tobacco: What to Watch

Cigarette Sales

Smokeless Sales

CMOY Tobacco: Ruth Ann Lilly

CMOY Tobacco/OTP: Matt Hieb

View the full 2016 Category Management Handbook

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