If there’s one thing that’s certain in the tobacco space, it’s that it’s always changing.
This year, CSP reached out to its 2026 Category Manager of the Year finalists in the Behind the Counter category to find out what they like about their job, what’s changed over the years and what they’re excited for.
Those category managers are:
Jessica Starnes
Small-chain winner
Serves as the director of loyalty and tobacco category manager at Powell, Tennessee-based Weigel’s, which has 89 stores. Starnes has been in this role for nearly five years.
Tina Badger
Large-chain finalist
Serves as a category manager at CrossAmerica Partners LP, Allentown, Pennsylvania. Badger is in her fourth year with the chain of 352 stores. She leads tobacco strategy across their 18-state footprint.
Melanie Zahller
Small-chain finalist
Serves as the retail category manager- tobacco/nicotine and candy for Bainbridge, Georgia-based Southwest Georgia Oil Co., which has 82 stores. Zahller has 30-plus years in the tobacco/nicotine space and has been with Southwest Georgia Oil for about four years.
Shawn Holmes
Small-chain finalist
Serves as the corporate manager for marketing and merchandising Hot Spot. Spartanburg, South Carolina-based R.L. Jordan Oil Co. operates 41 Hot Spot convenience stores. Holmes has been in his current role for 15 years.
Here’s what Starnes, Badger, Zahller and Holmes of Hot Spot had to say.
These answers have been edited for length and clarity.
What is your favorite part about your job?
Starnes: I enjoy the challenges that come with the role. While it may sound unconventional, navigating and overcoming the complexities of this category is both engaging and rewarding.
Badger: The most rewarding part of my role is competing within one of retail’s most complex categories—balancing regulation, consumer behavior and commercial performance to drive share. Tobacco demands precision, agility and a relentless competitive mindset, and I enjoy building compliant strategies that allow us to win consistently in a crowded marketplace.
Zahller: Collaborating with the teams (our vendor partners, the price book team, marketing, rewards and operations) to improve the day-to-day category interaction for our store managers and associates. Tobacco/nicotine is the only category within the store that our teams have consistent engagement with during our customers’ product decision making process. When these teams are aligned, the pricing and promotions are clear to the customer, the fixture is merchandised effectively and associates are more knowledgeable about the products.
Holmes: The category is always evolving, so there’s never a dull moment. I enjoy balancing compliance, innovation and profitability while still meeting our customers’ changing preferences. It’s rewarding when we can adapt quickly and see positive results at store level.
What’s changed the most about managing tobacco since you started in your role?
Starnes: The most significant changes have been the increased complexity of vendor programs and the rapid pace of innovation within the category.
Badger: The pace of change. What was once predictable is now fragmented, highly regulated and innovation‑driven. Rapid product evolution and shifting consumer behavior require greater agility, sharper analytics and closer collaboration than ever before.
Zahller: The complexity of promotions and change rate of pricing.
Holmes: Regulation and complexity. Between flavor bans, premarket tobacco product application (PMTA) enforcement, pricing pressure and the growth of alternative nicotine formats, managing tobacco today requires far more attention to compliance, sourcing and education than it did years ago.
What segments in tobacco are thriving, and why do you think this is?
Starnes: Nicotine pouches are performing exceptionally well. They offer a differentiated customer experience, are more socially accepted and tend to be more affordable compared to other segments.
Badger: Modern oral nicotine continues to outperform expectations. Its growth reflects a broader shift toward smoke‑free, discreet and socially adaptable formats. The success here is driven by innovation, trialability and a consumer base that’s open to switching—but still wants nicotine satisfaction.
Zahller: Certainly, the nicotine pouch segment is growing—we have moved past the early adopters that like to try anything new. Now more mainstream consumers are looking at alternatives to the products that they have been using, and they find nicotine pouches to be more versatile in how and when they can be used. Innovative offerings, nicotine levels and flavors have accelerated trial and regular use.
Holmes: Modern oral nicotine products continue to perform very well. Customers appreciate the discreet, smoke‑free format, variety of strengths and convenient usage. Nicotine pouches in particular appeal to both adult smokers looking to transition and existing smokeless users.
What segments are struggling, and what are you doing to try to boost sales?
Starnes: The vapor segment is facing challenges, largely due to illicit market activity. Cigars are also underperforming. In response, we are reducing space allocated to cigars and optimizing our assortment.
Badger: Traditional dip is under pressure as the category ages and usage occasions continue to narrow. This is a structural shift, not a temporary headwind. Rather than chasing volume in a declining segment, our focus is disciplined management—right‑sizing space, tightening assortments and pricing to demand. At the same time, we’re reallocating attention growing tobacco and nicotine formats that better reflect how today’s adult consumers shop, switch and engage.
Zahller: Cigarettes is the main segment that is struggling. Although it is expected with consistent price increases and the current economy, our goal is to ensure that our customers have choices at multiple price points and promotional offers.
Holmes: Traditional smokeless tobacco and some premium cigarette segments have softened. We focus on optimizing assortment, targeted promotions and strong vendor partnerships to ensure we’re carrying the right SKUs for our specific customer base rather than overloading shelves.
How have illicit vapor sales threatened your business?
Starnes: Illicit vapor sales have had a meaningful impact, contributing to an approximate 15% decline in the vapor category.
Zahller: That is the unknown, we don’t know what we don’t know regarding actual sales, but we do know that customers ask for products that we do not offer, but they can find in other outlets or online. Until there is clear regulation, it is a threat to all the businesses that operate legally.
Holmes: Illicit vapor products create an uneven playing field. They divert sales away from regulated products, undermine compliance efforts and increase enforcement risk. We stay vigilant by working closely with compliant suppliers and educating store teams about product validation.
What tobacco regulation is most affecting your business and why?
Starnes: Illicit vapor activity and state registry requirements are the most impactful. While we remain compliant, not all competitors are adhering to the same standards, creating an uneven playing field.
Badger: There isn’t a single regulatory lever reshaping our business—it’s the cumulative effect of an increasingly complex framework. Flavor restrictions are one visible component, but they operate alongside taxation disparities, product eligibility rules, marketing and loyalty limitations, and differing enforcement standards across states and municipalities. For operators with a multi‑state footprint, that fragmentation is the real challenge. Success requires highly localized pricing, assortments and merchandising strategies to remain compliant while still protecting category performance and adult consumer choice.
Zahller: Without a clear federal legal standard on vapes and nicotine pouches, states and local jurisdictions have built some of their own—these make a complex category even more complex impacting what can and cannot be sold in one state versus another. Taxation changes to new segments in one county or town not only create pricing complexity, but moreover, from a customer perspective, it is difficult for them to understand why stores only a few miles apart have sometimes significantly different prices.
Holmes: Flavor restrictions and uneven enforcement of PMTA rules have had the greatest impact. They limit assortment flexibility and confuse consumers, often pushing demand toward unregulated or illicit products rather than compliant alternatives.
Are you seeing growth in modern oral nicotine? How are you merchandising these products?
Starnes: Yes, we are continuing to see strong growth. Nicotine pouches have become a key driver on the backbar and may be the most important contributor to nicotine sales. As a result, we are allocating increased space and visibility to the category.
Badger: Yes, we continue to see strong, sustained growth in modern oral nicotine. The category benefits from ongoing consumer trial and migration toward smoke‑free alternatives, particularly among adult users looking for discreet, convenient formats. From a merchandising standpoint, we’re very intentional—grouping products by format and strength, clearly separating them from traditional smokeless to reduce confusion and encourage exploration. Fixture‑level education is critical, as many consumers are still new to the category, and clarity around usage, flavor profiles and nicotine strength plays a meaningful role in driving repeat purchase.
Zahller: Yes, we have seen year-over-year growth in this category for the last three years, although the growth rate has slowed. We made the decision to have defined merchandising segments four years ago and will be expanding the space allocated to nicotine pouches with our 2026 resets.
Holmes: Yes, we continue to see steady growth. We merchandise modern oral products prominently in the backbar with clear brand blocking, strength differentiation, and signage that helps adult consumers navigate options quickly.
What innovation are you excited to see in this category, or what innovation would you like to see?
Starnes: I am particularly interested in heat-not-burn technology and how it will be received by customers transitioning from traditional cigarettes and vapor products.
Badger: What’s most exciting right now is that the industry is finally in a true innovation phase. For decades, nicotine delivery offered very few options—largely limited to combustibles or traditional smokeless. Today, we’re seeing meaningful expansion in formats, experiences and usage occasions, which reflects a more sophisticated understanding of adult consumer needs.
Zahller: I am interested in seeing future innovation in the heat-not-burn category.
Holmes: I’m excited about innovation focused on harm‑reduction, improved flavor consistency and responsible product design. I’d also like to see more cross‑category innovation that brings adult consumers into the store beyond just nicotine alone.
Despite the popularity of smoke-free options, how are cigarettes doing in your stores?
Starnes: Cigarettes are experiencing a steady year-over-year decline, although there are some areas of strength, including fourth-tier products and Marlboro Black. I am also interested in seeing how Marlboro Cowboy Cut performs.
Badger: Cigarettes remain resilient, even as overall volumes continue a gradual decline. The category’s predictability is still a defining strength—brand loyalty remains high, and pricing elasticity has held better than many expected. That said, we are seeing some consumer trade‑down behavior, particularly into fourth‑tier offerings, as price sensitivity increases. Despite these shifts, cigarettes continue to play an important role in driving traffic and contributing to overall basket economics.
Zahller: Cigarettes volumes are down, in some price categories more than others. As customers’ choices shift to other categories or price options within cigarettes, our goal is to ensure that the declines are clearly being offset with the increases in other categories or price groups. We are monitoring inventory levels, educating associates and evaluating the overall tobacco and nicotine sales both volumetrically and from a dollar perspective—and consistently asking if we are meeting our customers’ needs as their choices evolve.
Holmes: Cigarettes remain a strong traffic and revenue driver, though volumes continue to decline gradually. Price sensitivity is increasing, so value brands and strategic promotions are more important now than ever.
What do you learn about your tobacco customers through your loyalty program?
Starnes: Tobacco customers are among our most loyal shoppers, with redemption rates exceeding 70%. They are highly engaged and willing to take additional steps to realize savings.
Badger: Loyalty data shows that tobacco customers are not siloed purchasers—they are sophisticated, value‑driven convenience shoppers with broad basket engagement. We can clearly identify a meaningful segment of poly users, who move fluidly across multiple tobacco and nicotine formats while also actively shopping foodservice, beverages and adjacent categories. These customers respond strategically to value, timing and access, making highly intentional choices rather than habitual ones. In many cases, tobacco isn’t the destination—it’s the entry point into a wider, planned store experience.
Zahller: Customers that purchase tobacco products are very consistent and engaged with our loyalty program. Learning about their market basket, purchase patterns and shopping frequency allows us to move toward aligning promotions that are more personalized to them.
Holmes: Loyalty data shows us that tobacco customers are highly habitual but open to trial when the value proposition is clear. We also see strong cross‑purchasing behavior inside the store, especially with beverages and snacks.
With higher pump prices, is this affecting what your customers are buying in tobacco, or inside the store in general?
Starnes: Yes, we are seeing some impact, including a degree of downtrading within the tobacco category.
Badger: We’re seeing consumers become more value‑conscious overall—seeking promotions, bundling trips and being more selective. In tobacco, that often translates into slower brand switching but greater sensitivity to pricing gaps. Inside the store, it reinforces the importance of clear value propositions.
Zahller: Higher gas prices impact disposable income and that impacts their choices and shopping frequency, we are seeing customers seeking out higher promoted products or lower priced alternatives in tobacco and in other store categories
Holmes: Absolutely. Higher fuel costs have made shoppers more value‑conscious across all categories. In tobacco, customers are trading down or purchasing less frequently, while inside the store we see more focus on deals and bundled offers.
What changes have you made to your backbar in the past couple of years?
Starnes: We have strategically positioned ourselves as the nicotine pouch destination within our trade area. This has resulted in a significant increase in space dedicated to the category, along with testing a variety of brands and pouch technologies.
Badger: We’ve reworked the backbar to give each segment dedicated space, allowing room for growing subcategories like modern oral. The shift from density to strategic segmentation has improved clarity, compliance and overall category performance.
Zahller: The backbar has been consistently evolving, for the future the number one opportunity is to maintain space flexibility, so that we can quickly adjust merchandising space for new products/innovation that our customers are looking for.
Holmes: We’ve streamlined SKUs, increased space for modern oral nicotine, improved compliance signage and focused on cleaner brand blocking. The goal has been to reduce clutter and make the decision process easier for both customers and employees.
Do you sell any hemp-THC products? And if so, how do you merchandise them and how are they doing?
Starnes: No, we do not currently carry hemp-THC products.
Zahller: We do not currently carry and hemp-THC products related to the backbar. We have in the past and did not have the off take that we expected and so we no longer carry these.
Holmes: Yes, we sell THC‑infused beverages and hemp‑derived THC products behind the counter. We merchandise them with controlled access, clear age verification and trained staff. Performance has been strong, particularly with beverages, as consumers view them as a lower‑commitment, social option compared to other formats.
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