LAS VEGAS -- The NATO Show has long prided itself on providing valuable, engaging insights into the ever-challenging world of tobacco, and the 2016 conference again rose to the task. After presentations from Bonnie Herzog of Wells Fargo, Michael Herklots of Nat Sherman and Thomas Briant of NATO, even this tenured tobacco editor learned a thing or two. Here are five key findings from the first day of the NATO Show:
A 'Tobacco-Free Generation' Law?
We all remember when Westminster, Mass., famously attempted to ban all tobacco sales. Well, Brookline, Mass., has taken what NATO executive director Thomas Briant described as a “twist” on banning tobacco, proposing a law that bans selling tobacco to anyone born after 1995. Even though Brookline’s equivalent of a city council declined to vote on the measure earlier this week, it’s certainly a matter to keep an eye on.
Price Increases Are Coming
Wells Fargo tobacco analyst Bonnie Herzog routinely surveys retailers on a number of issues, including pricing. Based on her latest “Tobacco Talk” survey, retailers predict the next price increase to come within weeks (May 9, to be exact) at 7 cents per pack.
Mastering 'Expertly Vague' Selling
Michael Herklots, vice president of retail and brand development for New York-based Nat Sherman, provided a number of insights on mastering the premium-cigar category. Our favorite pointer was teaching clerks to be “expertly vague”: knowing how to talk about any cigar without actually knowing anything about it. Citing the differences between a long and short cigar, or a fat or thin cigar, will take them far, he said.
Altria Going Superpremium?
In the wake of lower gas prices, consumers have been “trading up” in a number of categories, including cigarettes. With Reynolds American’s National American Spirit brand continuing to grow by double digits, Herzog has talked with Altria Group Inc. about whether the No. 1 player will enter the superpremium space. “They were open to it, which is interesting,” she said.
Big Marijuana
One of the first questions asked of Herzog involved the potential of legalized marijuana—a question she said she’s been getting frequently from retailers and investors alike. While she described Altria and Reynolds as being “cautious” in comments about marijuana, Herzog thinks it’s a good fit: “My belief is they will enter when and if marijuana is legalized federally. It makes sense.”
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