Overhauling Tobacco

"The tobacco industry is at a crossroads. There's a need for change," expert says
NEW ORLEANS -- "There's a debate, there a battle over nicotine." Lou Maiellano, tobacco consultant and former tobacco category manager, said a wave of new products are coming, potentially accelerated by impending federal intervention that would give the Food & Drug Administration (FDA) jurisdiction over all tobacco products.

Speaking at the Tobacco Plus Expo 2009, Maiellano shared with several dozen retailers how a plethora of noncombustible nicotine products are being produced by small and large companies across the country. Beyond the buzz of snus, he listed nicotine [image-nocss] water, a nicotine inhaler sprayed into the mouth, a nicotine-based hand lotion that comes in cucumber and other fresh fragrances.
With that, he said in understatement, "Times are changing and we need to adapt to that."

From Philip Morris and R.J. Reynolds to Swedish Match and Star Scientific to obscure companies in small niches, invention and innovation could radically reshape a tobacco industry currently driven by cigarettes. Even cigarettes, Maiellano noted, could be altered by e-cigarettesrechargeable cigarettes that can be plugged into your laptop.

"Imagine going to your doctor and getting a prescription for pills of Marlboro?" he said. "We all say it will never happen. But why couldn't cigarettes be safe. If I have an IPod with 80 gig...why not?"

With that, Maiellano challenged retailers, primarily tobacco outlets in the audience, to revisit how they present the tobacco category. He offered the same challenge to convenience stores that are frequently bound by lucrative contracts with the majors that limit the amount of space allocated to nonpremium brands.

Create a No Smoke Zone, an Alternative Zone and other eye-catching displays that maximize segmentation, he said. "If you want to grow snus, you have a snus category. If you want to grow alternatives, you have an alternatives' category."

Radical thinking, perhaps, Maiellano acknowledged. But the best retailers are the once who anticipate behavioral changes and help drive that change, he said, noting the sweeping shift in the cold vault where water and energy drinks consume an increasingly large share of space.

"The tobacco industry is at a crossroads. There's a need for change," he said. "If tobacco fails, then we have the greatest opportunity to also fail."

Maiellano has 25 years experience and is a broadly experienced marketing/sales manager with significant credentials in the convenience store and tobacco business. Most recently, he was national category manager for Sunoco, where he created and managed strategy and profitability for the $395 million tobacco category. He has also held operational positions at Sunoco, Mobil, Macaroni Grill and Wawa. He directed the management of staffing, training, sales and marketing programs, financial management and both corporate and vendor relationships. And he has operated many successful food-related programs including Burger King, McDonalds, Taco Bell, Vie DeFrance, Parlor Pizza, Country Chicken, City Deli and Gulliver's Coffee.

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