Growth there for the taking

Cigar manufacturer STG UK spies opportunity in convenience

It may not be as well understood by some as cigarettes, but cigars can offer retailers a cracking margin opportunity if they get their offer right – with demand coming from a broad range of consumers.

As things stand, the UK cigar market is worth £199.4m and growing at a rate of 0.4% according to figures provided by Scandinavian Tobacco Company, the firm behind Henri Wintermans, Moments and Cafe Creme.

When turning to the miniatures and medium cigar segments, the growth is even stronger with sales up 4% and 5.2% respectively, according to STG UK.

Jens Christiansen, head of marketing and public affairs at STG UK noted that the firm’s portfolio of miniature brands contributes 70% of all value sales in the miniature segment, while the firm’s Henri Wintermans Half Corona holds the top position among medium/large cigars.

Christiansen reckons this makes STG UK brands a “must stock” for retailers, particularly with Christmas on the horizon – and especially as existing adult smokers seem willing to make the shift from cigarettes.

“Earlier this year, we commissioned our own research into shopper purchasing habits of tobacco and the results showed that most smokers are actually very open to trying cigars and willing to consider switching given the right factors,” he said.

“The research findings highlighted that 59% of male smokers who don’t normally smoke cigars would be willing to buy them. While 32% of traditionally non-cigar smoking males said they would buy cigars for their taste, and 27% would if they were cheaper than cigarettes.

“The research also showed 79% of smokers who regularly visit a convenience store would try an alternative tobacco product such as cigars, if it was recommended by store staff.”

With this in mind, Christiansen suggested retailers invest some energy in improving staff knowledge, to ensure their store makes the most of the opportunities the category provides.