GLENDALE, Ariz. -- While cigarettes face continued decline in volume, speakers at CSP’s recent Convenience Retailing University (CRU) conference in Glendale, Ariz., shared promising numbers regarding tobacco subcategories, including cigars, other tobacco products (OTP) and vaping products.
Speaking about tobacco specifically while addressing about 300 attendees at the conference’s opening general session on Feb. 21, Abbie Westra, director of retail content for Winsight, said smokeless and cigars in particular were high points among c-store categories overall.
Here a look at Westra's take on the category and five other tobacco-related insights from CRU ...
1. Retailer activism
With a gridlocked Washington and an executive agenda aimed at granting more power to states, c-stores should look out for legislation being hurled at them from different directions, Westra said.
“Tobacco, soda and minimum wage are just three of the biggest areas seeing lots of activity—particularly at the state and local level, where things move very, very quickly,” she said. “Suddenly, retailers are having to be activists, fighting for their ability to do business and creating playbooks on how to be heard.”
2. Cigar trends
Cigars sales were up 13% in dollars and 14% in units, Westra said, citing full-year 2017 data from Chicago-based IRI.
3. Smokeless outlook
Movement in OTP outpaced cigars, she said. IRI numbers for the same year-over-year period ending Dec. 31, 2017, showed the category rising 49% in dollar sales and 55% in unit sales.
4. Vape promise
The vaping and e-cigarette category, according to IRI's 2017 numbers, were up 36% in dollar sales and 16% in unit sales.
5. Resetting for innovation
During a category workshop, Laura White, category manager for tobacco for RaceTrac Petroleum, Atlanta, said the chain just underwent a tobacco reset, carving out a 2-foot rack for “innovation” within the category—a move that puts vaping and electronic cigarettes in the spotlight.
6. Premium notion
For two other speakers, premium tobacco products within the c-store was a hot topic. Bill Noah, director of sales operations for Scandinavian Tobacco Group, Tucker, Ga., and Dylan Spencer, director of marketing for Space Jam Juice, San Clemente, Calif., both said the tobacco category is due for a makeover.
During a category breakout session, Noah said that with c-stores becoming more upscale and offering craft beer and other premium products in multiple categories, a similar rethinking needs to occur with tobacco. Spencer agreed, saying that while space is always a concern, failing to explore new, upscale technology trends within nicotine delivery would be a lost opportunity.