My market: Smoking out value

Sales and marketing professionals explain how they see convenience and wholesale. This issue: Paul Stokoe and Ryan McCaffery from JTI

Ryan McCaffery and Paul Stokoe
Ryan McCaffery (left) is a multiple account executive for JTI, overseeing the independent wholesale channel in Scotland. His previous experience lies in the retail tobacco sector. Paul Stokoe (right) joined JTI 13 years ago and has carried out various roles, gaining a wealth of experience on his way to becoming business development manager
for independent wholesalers.

Have you seen especially positive growth in 2015 with any particular category or any particular brands?
We have seen positive growth across many of our key brands, with Amber Leaf and Sterling particularly successful in Scotland.
Continued growth of our portfolio is attributable to the fact that in recent years many adult smokers have chosen to switch to products which offer greater value for money – a trend which has manifested itself in the considerable growth of the value ready-made cigarette (RMC) and roll-your own tobacco (RYO) markets.
Not only is Sterling the UK’s number one value cigarette brand and the best-selling cigarette brand in the UK, but Amber Leaf is also the best-selling RYO brand in all regions and the number one tobacco brand overall – making these brands a must stock, especially larger packs of RYO which potentially offer better value for the consumer.

Do you think wholesalers understand the relevance of your various products to the channel? And do you think tobacco companies appreciate the importance of Scotland’s wholesalers?
JTI’s team of multiple account executives (MAEs) and distributive sales developers (DSDs) invest significant time in understanding their customers’ businesses and visit their assigned depots on a regular basis to offer maximum support.
This can involve anything from unveiling promotions to driving tobacco retailer trial of the latest NPD, creating category reviews to help our trade partners focus on key brands and maintain their availability.
Scottish wholesalers are crucial to the supply chain as tobacco is one of the few categories that isn’t available in the emerging discount supermarkets channel and therefore the independent retailer is able to maintain a competitive edge in this key category.

What do you see as the most important current tobacco trends?
The growth in consumer demand for value, reflected in the success of the RYO category as a whole and the continued growth of value RMC segment, is inescapable. JTI’s RYO brand range accounts for a significant 44.3% volume share of the RYO category in Scotland and includes Scotland’s number-one tobacco brand Amber Leaf.
Maintaining 24/7 availability of tobacco is crucial, especially of key value lines such as B&H Blue. Out of stocks will only lead to lost sales, as 26% of shoppers choose to buy elsewhere if their intended item is unavailable.

With the introduction of the tobacco display ban, do you see a future for PMPs? In the short-term, how can wholesalers and retailers use PMPs to their full potential?
PMPs are performing particularly well and currently account for 77% volume share of the RYO market and 74% of the RMC market in Scotland. Existing adult smokers are looking for value, as price is a key driver for both product choice and where the consumer chooses to shop. Price-marked packs continue to drive footfall, customer loyalty and associated purchases in independent stores.

What kind of effect has the dark market had on your own activities?
The display ban in Scotland has the additional challenge of the flaps on gantry units, which retailers have coped with. It is more important than ever for wholesalers to have a thorough understanding of what’s happening in the tobacco category, including the areas of growth, the most popular pack formats and what sells well in their region so they can share information with their customers. JTI holds regular range reviews with its wholesalers, using EPOS data to optimise the range and maximise sales potential.

How can tobacco manufacturers best work with wholesalers to maximise sales from the category?
JTI is dedicated to providing wholesalers across the UK with support and advice to help them excel in the tobacco category and maximise sales. Every single sales visit is specifically designed with the wholesaler in mind, providing essential information on product developments, new initiatives and merchandising support. It’s also important to treat every single depot as an individual case. What works well for one wholesaler may not necessarily work well for others, which includes driving tailored promotions through our wholesale partners which can offer higher POR for their retail customers.
Wholesalers can support their retail customers by keeping them up to date with information available in their tobacco rooms which will help them understand the local and national trends. They should also speak to retail customers about the latest brand innovations, making sure they are getting their availability and range right in store.
Wholesalers can also direct customers to JTI’s trade website, which offers a wide range of guidance and support for retailers and their staff.