A Taste for Tobacco
Some of tobacco marketers leading players are stepping up to the plate with creative flavors and high-tech tobacco alternatives.
Despite increasing stringent restrictions and negative ad campaigns, the tobacco industry is not going up in smoke. Evolving technology is helping the category adapt to the changing market.
While traditional cigarettes may no longer be enough to satisfy modern consumers’ cravings for robust flavors and variety, retailers can boost tobacco and tobacco-alternative sales by taking advantage of the colorful and flavorful new products hitting the market.
Industry observers say that while technological innovation has become an industry constant, the trend toward flavor innovation has also become noteworthy. “Consumers are looking for flavors that span their palettes—from sweet, like our Vivid Vanilla flavor, to bolder tastes, like blu’s Carolina Bold,” says Wayne Jones, senior vice president sales operations at Fontem US, the parent company of Charlotte, N.C.-based blu. “blu has also seen a rise in sales in disposables, which offer a great option for consumers looking to try our product without committing to a rechargeable device.”
Swisher International also has experience in flavor innovation with its range of cigarillo varieties. One of the Jacksonville, Fla.-based company’s featured cigarillo flavors under its Swisher Sweets brand is Banana Smash, which offers a sweet blend of banana and strawberry.
“This unique blend created excitement and traffic from adult consumers, and we sold out in eight weeks,” says Jane Green, vice president, marketing for Swisher International.
Swisher Sweets also recently added a mango flavor to its classic cigarillo line, and offers the product in a variety of pricing options that retailers can choose from based on their market. The options include “2 for 99¢,” “save on 2,” and “2 for $1.49.” The mango blend has increased 29 percent in the large cigar category, say company officials. This past autumn, Swisher Sweets introduced its Outlaws Cigars, which were “inspired by the modern-day outlaw” and come in a range of flavors including Honey Maple and Peach Brandy.
Cheyenne International has also jumped on the flavor innovation train with the debut of its Strawberry Cigars, which come on the heels of its Limited Edition Tropical. David Scott, CEO of Cheyenne International, based in Grover, N.C., says the addition of Strawberry 100’s was a natural step for the company because adult consumers are looking for both quality and variety in the category. He adds that the addition of Strawberry 100s allows retailers to tailor their OTP set for their market needs without having to sacrifice profitability. The Cheyenne Strawberry 100’s Cigar is available in 20 cigars per pack, accompanied by point-of-sale and customized retail and wholesale programs to fit individual market needs.
Flavor innovation is also a key factor in the growth of the vaping segment. Jacopo D’Alessandris, president of E-Alternative Solutions (EAS), a sister company to Swisher International and the exclusive marketer and distributor of recently launched Cue Vapor System in the U.S., says flavor innovation has been driving the vaping industry. Cue Vapor is an e-cigarette device that D’Alessandris says is less complicated to use than most options on the market because it can be smoked with a simple press of a button and uses replaceable flavor cartridges instead of complicated coils. The cartridges come in 10 flavors—five tobacco flavors and five fruit, mint and dessert flavors—that are available in three different nicotine levels. D’Alessandris says this range of flavors is ideal for retailers’ shelves because it has something for everyone without being overwhelming to consumers or taking up too much shelf space.
“In general, Millennial smokers have been the drivers of the vaping culture. We’ve seen this growth in the past five years especially,” D’Alessandris says. “What’s been driving the evolution in the category is the availability of a variety of flavor options. We’re seeing people seeking an alternative to traditional tobacco products, and once they get into vaping they try new flavors shortly thereafter. Tobacco flavors are still the most desired options, but desserts and classic fruits like melon and berries are also very popular. In the dessert category, vanilla and chocolate are the trending favorites.”
D’Alessandris says these flavor cartridges are also of value to retailers because once a consumer purchases the Cue Vapor device they will then need to continuously return for cartridge replacements.
“We are employing a model like that employed by Keurig with its coffee pods, where the customer simply has to replace a cartridge to select a flavor that’s right for them. We intend to make Cue Vapor an attractive offering to adult Millennial smokers and vapers and an older generation of smokers who are seeking an alternative to cigarettes,” he says. “It is a perfect model for grocers because it is a driver type of category that draws in shoppers.”
Jones says blu also focuses on innovations that target Millennials, and that the demographic is driving the evolution of the category.
“Millennials are driving many companies to innovate—not only in the e-vapor industry, but across all consumer brands today,” Jones says. “The most important thing to understand about Millennial consumers is that much like with everything else they use on a day-to-day basis, they are constantly searching for a product that meets their personal needs and demands. This means not only do they need a simple, efficient and strong-performing e-vapor device, but that we must also understand how they use the product, where they use it, when they use it and even why they use it. This is where we have an edge on the market and why we take Millennial feedback very seriously when designing our products.”
Free for All
While keeping the tobacco shelves fresh and exciting can help boost sales, retailers would be wise to take note of the growing demands for tobacco alternatives. Dave Savoca, president of Sandy Hook, Conn.-based Smokey Mountain Chew, says the increase of tobacco-free campuses among businesses has caused a noticeable boost in sales of the brand’s tobacco-free herbal snuff.
Herbal Snuff recently launched a citrus flavor to help meet the needs of the brand’s growing consumer base as tobacco taxes, healthcare regulations, insurance premiums and nicotine testing become more prominent, Savoca says. He adds that retailers can help boost sales on these tobacco alternative products by keeping an ear out for whether or not corporate campuses nearby are going tobacco-free and by making these alternative products visible and convenient to buy.
“Any type of visibility is really what sells a product, so if we can work out a type of short-term promotion to add visibility to the brand, that would help,” he says. “Consumers, especially at grocery, are looking for ease of purchase and they need a visible location that has a diverse mix of products.”
Turning Point Brands offers its rapidly growing Stoker’s Moist Snuff in a 1.2-ounce can and in a 12-ounce tub for value shoppers. The Louisville, Ky.-based company also recently expanded its traditional OTP offerings through the acquisition of several smokeless tobacco brands, including Big Mountain, Appalachia, Black Mountain, Springfield Standard and Snake River. The addition of these regional brands further strengthens the company’s position as the No. 2 marketer of chewing tobacco products, says Brittani Cushman, vice president of external affairs for Turning Point Brands.
“In the OTP space, we see consumers who are constantly evolving in their buying preferences and demonstrating a desire to try new styles and different types of products,” Cushman says. “Turning Point Brands aims to provide retailers with a varied portfolio of products to meet the needs of these types of consumers through our lengthy catalog of popular OTP options.”
D’Alessandris says Cue Vapor also meets the needs of consumers who are looking for traditional tobacco alternatives because the product comes in a range of colors and does not look anything like a cigarette. This can help reduce the negative stigma consumers may encounter from their friends and families, he adds.
“We think it is important to counteract the negativity of the cigarette factor,” he says. “By their very nature, most e-cigarettes look like cigarettes. We think this is an issue because some smokers don’t want a product that makes them look like they’re smoking. There’s often a negative stigma associated with smoking, especially amongst Millennials, and this product doesn’t invoke the same emotional response.”
Consumers who are not ready to venture into tobacco alternatives but are looking for a way to cut down on some of the risks associated with smoking can try Smokey Mountain Chew’s new product, Airio Micro Filters. The product is the world’s smallest cigarette filter, says Savoca, and takes out most of the tar and harmful chemicals found in cigarettes.
“Traditional cigarette filters have been so large that you have to hold onto it and people don’t like that,” he says. “Ours are so small that consumers can smoke their cigarette in a normal fashion.”
Retailers can help boost tobacco sales by ensuring visibility and ease of purchase, but many companies are also doing their part to make sure consumers are educated about the new products and tobacco alternatives that are available to them. EAS recently rolled out an infomercial that educates consumers about Cue Vapor and its attributes.
“When it comes to vapor products and e-cigarettes at retail, the previous marketing efforts relied on retailers to do the work to sell the product,” D’Alessandris says. “Through our infomercial campaign, Cue lifts that burden from the retailer while providing a more stylish and simplistic device for consumers. We are focusing on building brand awareness so that when consumers walk into a grocery store they see and are familiar with the product without requiring the retailer to devote too much time and effort. Retailers don’t have the time to become vaping experts, and Cue makes vaping simple for both the retailer and the person looking for an alternative to smoking.”
Swisher and blu also try to help their retail partners increase sales within the category by educating them on the current state of the market and providing data that can help them make the best decisions when stocking their shelves.
“We believe that product education is the best way for retailers to maximize the sales of our products. We support this by providing materials that explain the current and evolution of margins made by our trade partners within the EVP category,” Jones says.
Green says their goal is to partner with retailers to maximize each store’s sales and profits across the entire OTP category. “With professionals certified in category management and geo-focused business analytics, the Swisher team helps retailers focus on the right products in the right quantities,” she adds. “It’s a data-driven, customized solution to grow traffic, turns, and profits.”