Convenience Stores Will Need More than Tobacco to Fill Empty Menthol Slots

Menthol and flavor bans will confront the Food and Drug Administration with a new range of unregulated hemp, botanical and CBD-infused flavored smoking products: Geoghegan
Menthol cigarettes
Photograph: Shutterstock

When the Food and Drug Administration (FDA) finally arrives at an enforcement date for their bans on menthol cigarettes and flavored cigars, convenience-store tobacco customers may be surprised at how much, and how little, things have changed. On the other hand, the FDA shouldn’t be surprised that nicotine-free smoking will be part of the new retail shelf set, beyond its tobacco rulemaking authority.

By the end of this year, forward-looking retailers will have had time to plan a new tobacco back bar, minimize category shrinkage, shift more grab-and-go items to the front and extend premium cigars and smokeless SKUs to replace missing menthols and flavored facings. Many will also offer non-tobacco, nicotine-free menthol and flavored smokes free of profit-robbing federal excise taxes, already happening in California. Retailers shouldn’t underestimate the simple enjoyment of a smoke break.

Last year, against a retail backdrop of more store locations, more square footage and a strong economy, convenience-store sales of every leading cigarette brand declined. Cigarette volume, by far the tobacco section driver, continues downward by around 400,000 packs a year, according to the Centers for Disease Control’s 20-year survey; a decrease of about $1.8 billion in 2023 vs. 2022, by NielsenIQ’s count.

Meanwhile, vape usage continues at around 5% of tobacco section sales, $69 million smaller than last year. Six times as many teens regularly use vape as smoke cigarettes when correlating census data with CDC numbers, leading to a new FDA impetus in market denials and warning letters. Alternative nicotine products are projected to grow from their 3% market share, but even 40% growth in 2024 wouldn’t provide the impetus that some research has projected. Cigars and cigarillos are at 5%, barely changed from 2022. The only real growth was smokeless, up around $670 million to 13% of the tobacco section.

Finding Flavors Outside the Box

Without menthols and flavored cigars, there will be millions of empty slots to fill. A partial solution will be non-tobacco, nicotine-free smokes, smokeless and wraps. They won’t save the section, but they’ll deliver key flavors the FDA took away and add back facings at a sustainable level.

Hemp-based menthol smokes are already on shelves at independent retailers who have jumped ahead of the FDA’s promise to “work with Congress” to sort out the rules for hemp. Nicotine-free filtered botanicals are appearing on retail shelves in California and other markets in menthol, clove and other flavors. They’re positioned as alternatives rather than cessation, offering a measure of self-control smokers currently don’t have with nicotine and tobacco. 

Why Is This Important?

Botanicals and hemp smokes fulfil the social need for the act of smoking and the indulgent fingers-to-lips satisfaction that smokers describe in research groups. CDC data say 68% of smokers want to quit. Nine out of 10 don’t. Concerns about health and nicotine addiction continue to reduce the smoking population, but age-related data show the reduction results from those who never start rather than those that try quitting. The hemp rules need to be further defined before distributors and retail chains stock and sell without marketer indemnification. So far, the FDA has ignored any regulatory language.

They Aren’t Cigarettes

How will the FDA and key states like California and Massachusetts respond to the presence of non-tobacco, nicotine-free smokes?

Section 900 of the 2009 Tobacco Control Act provides the deeming legal definition of a taxable cigarette. It first requires that it be made of tobacco. It then includes this language “that, because of its appearance, or its packaging and labeling … is likely to be offered to, or purchased by, consumers as a cigarette.”

In order to have a sustainable and secure place on the c-store shelf set, nicotine-free smokes will need to be merchandised and displayed as a distinct segment not offered as tobacco. The nature and purpose of nicotine-free blends should discourage regulators from rewriting rules. Well-researched expectations for volume, velocity and consumer expectations can be supported by media and marketing.

For retailers, the goal is to improve the transition for menthol smokers looking for their regular brand. More importantly, retailers will have a finger to point out the evident separation and differences to the inevitable tobacco inspectors and enforcers.

Managing the Regulators

As FDA flavor enforcement grows closer, there should be enough nicotine-free marketers to form an alliance that offers a profitable, sustainable segment for frustrated menthol and flavored cigar smokers. A distinct non-tobacco section would offer clarity for regulators at federal and state levels and avoid an extended sequence of headaches for retailers. It will also provide further assurance to distributors that they’ll be outside of tobacco regulatory and tax constraints. All ships rise with the tide.

This should influence standardized shelf sets for non-tobacco smokes. It could even signal nicotine-free non tobacco SKUs with a small emblem or imprint on packs for regulators and consumers. Press and social media information would also inform regulators and relieve retailers and distributors of the need for explanation.

The FDA and state governments have enough to do without adding nicotine-free smokes to their list. Who knows? Some menthol smokers might kick nicotine all by themselves. And enjoy it.

John Geoghegan has spent the last 30 years in the tobacco business including vice president at General Cigar Co., U.S. Manager for DjEEP Lighters and marketing head at Kretek International Inc. Prior to that, he served as senior vice president group creative director at a global advertising agency. He began his career at Procter & Gamble. He lives in Laguna Niguel, California. Reach him at johngeo3646@gmail.com.

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