AS they take up relatively little space in tobacco gantries at present, could cigars suffer substantially once the display ban is implemented?
Well some of Britain’s cigar suppliers are actually quite bullish.
Scandinavian Tobacco Group UK, which markets cigar brand leader Café Crème, says value for money is hugely important to the cigar market and other parts of the tobacco market too. And it reckons it has a secret weapon for the market battles ahead with its newly launched Break Little Cigars, which it views as a new sub-category of Super Value For Money (SVFM) cigars that will allow retailers to offer their customers a cheaper, alternative smoke to VFM cigarettes (see full story on p94).
Elsewhere in the cigar market the firm says the miniatures segment has continued to increase its share of the market, it now accounts for the largest section of the category with 67% of sales.
STG says its Moments range has proved “incredibly popular” with the trade. Head of marketing Alan Graham said: “Not only has the Blue variant taken up position as the sixth-leading miniature cigar since its launch, but is now positioned as the eighth-leading cigar in the total market.”
On its main brand, Café Crème, Graham argued that its position as brand leader showed it was a product range that is trusted by consumers
“The Café Crème family now accounts for 40% of the entire UK cigar market and is worth over £74m in the UK alone, demonstrating just how popular the range has become with cigar smokers,” he said.
Andy Swain, field development manager for the convenience channel with cigar firm Ritmeester, told Scottish Grocer things had been going well for the range in c-stores since the firm, strong in supermarkets, had begun to analyse and understand the market in convenience outlets.
“We’ve put price-marked packs in, we’ve put the distribution channels out there, we’re starting to get some real traction in it,” he said.
A problem had been, he said, that the miniatures cigar market leader had been on shelf typically for between £4.80 and £5 and Ritmeester’s recommended price had been about £4.40.
“We’ve launched our price-mark at on our Royal Dutch Miniatures Yellow and Blue at £3.65. That’s a huge difference, getting the consumer looking at the gantry, thinking, there’s a whole pound saving for me there,” he said.
“The one thing we’ve got with our products is fantastic quality. Consumers want value for money but they won’t sacrifice the quality, which is probably why Aldi is doing so well.
“We are moving to £3.95 in July – we’ve held back from the duty increase. It still begins with a three, and still keeps us that £1 price difference.
“Price marking can be so difficult for Mr Retailer because of the margins he can make on a PMP, 2-4% on some of the cigarettes out there.
“We are offering a minimum of 18% margin to retailer on PMP as well.”
He said he was intrigued by activity on little cigars and that Ritmeester was well placed if the sub-category took off.
“We are the market leaders in that product across Europe with Mini Moods and Moods Filtered. We’ve been trying to get filtered cigars going in the UK and never gained traction compared to where we are across Europe.
“We’re the market leaders in Germany, Holland, Switzerland. It’s encouraging for me, if Break manages to get the UK to move onto this, we’re perfectly placed to come in with our products.”