Publication - Tobacco Business Online

Transcription

Rouseco’s Golden Harvest now available in a new size—“The Pounder”
JANUARY/FEBRUARY 2014
VOLUME 17 NUMBER 1
n
Some of the tobacco outlet industry’s
ToP 50 ReTaileRS, which
all together have headquarters
SPanninG 25 STaTeS,
reveal their 2013 highs and lows, along
with a few
2014 exPecTaTionS.
Retail tips from Kansas
City’s Fidel’s Cigar Shop
C-Store Corner: Succession
& the Family Business
Cigar Sense:
A Regulation Update
PUBLISHER’S LETTER
BY ed o’connor
A Retrospective…
H
appy New Year! May the months to come bring
happiness, good health and a modicum of prosperity to you and your loved ones!
In our last letter we gave you “Perspective from a Bold
Forecaster.” Recall the “Old Bold One” envisioning an unfolding electronic cigarette industry. If you missed it, take a
look at the Publisher’s Letter in your November/December
issue, or refresh your memory at www.tobonline.com.
It being the start of a new year, a time when we customarily look back and glean the year’s high points, “Editorial
Auld Lang Syne” has sparked thoughts of Tobacco Business’s “word craft,” shaping your perspective on the vital
issues and opinion makers governing the industry. Memory Lane draws our focus back to 2013.
Remember the presentation of the Top 50 Retailers? Fifty
top chains discussed growing pains, positive store changes, challenges faced, tobacco harm reduction and even a
wish list. The California Distributors’ 50th Anniversary was
celebrated along with their tireless work to defeat Proposition 29, which would have added a $1.00 per pack cigarette
tax (January/February issue).
Then, the landmark story on electronic cigarettes hit:
“those advancements in the electronic cigarette arena
were being felt industry-wide…through analyst and public health expert backings, at the manufacturing level, and
even a newly formed standards association.” Don’t forget
the TB-commissioned research focusing retailer attention
on decreasing cigarette volume and essential OTP items
critical to making up the loss in cigarette volume (March/
April issue).
May/June provided research on Joe Friday’s assessment
of the TPE (now TPC) January trade show in which results
were reported from both exhibitor and retailer points of
view. Highlights of the AWMA show rounded out trade
show coverage. Rich Castiano told of his inspiring “Trench
Marketing” saga describing the evolution of his World Famous Cigar Bar—a story of perseverance against bad odds
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TOBACCO BUSINESS
to create a great cigar store. Richie will tell more about
what it took to create his business, along with insightful
retailer promotional ideas at TPC 2014. Tobacco Business
became the successor to Tobacco Outlet Business, the
goal being to broaden industry coverage of the changing
tobacco market.
Then came breaking news from TMA covering harm
reduction and the FDA, summarizing the best thinking on
industry burning issues. The demise of the rolling machine
business angered many operators and was greeted with
“good riddance” by industry factions. “Rolled Over, But
Not Gone” told the story. How about the Meerschaum pipe
story and IPCPR coverage? “Electric Alley” debuted: TB’s
commitment to updating the developments of the signature tobacco product of the generation (September/October issue).
Hopefully you saw the data roundup on sales trends in
“C-Store Corner:” the change in annual growth of cigar
packs, the number of e-cig SKUs carried, along with leading e-cig brands and top branded cigar packs sold in 2012.
What about that 17th Annual Smoker Friendly Tobacco
Festival & Conference? The hot products of 2013? Also,
“Profit” on page 103: a way to boost your sales in the flagging cigarette market. And of course, the TPC 2014 details:
the agenda, the exhibitors, the floor plan, the hospitality,
the seminars, and the round tables. Stogies and Steaks, the
John Hunter Foundation’s charity event, heralded broad industry support of the foundation’s dream to build a school
and a future for elementary school children. Yes, TB was
there (November/December issue).
“Auld Lang Syne:” it’s all there. Thanks for a good year!
Best to you,
INSIDE
THIS ISSUE
CIGAR SENSE
Cigar Sense: Staying Alert for Regulation
28
Will 2014 be the year cigars become FDA-regulated?
FEATURES
Pipe In Hand: Slow Smoking
36
Electric Alley: How Very Resourceful
40
A leisurely pipe offers the pause you need when life is racing by.
The electronic cigarette industry is now bursting with association
and expert support; here are some trusty “e-resources” in one compiling.
Top Tobacco Perspectives From Around the Country 44
Mistic: Market Maven, page 62
Domestic perspectives from the top of the tobacco chain(s).
Rouseco Honors U.S. Military
58
Event Highlight: NACS
60
Mistic: Market Maven
62
A team of servicemen enjoyed an annual fishing expedition
on a boat sponsored by Rouseco.
Highlights From October’s NACS Show
A top seller at Walmart, this e-cigarette brand couples a savvy
market strategy with value pricing for a winning combination.
Event Spotlight: NACS, page 60
Event Spotlight: D&R’s Debuts
68
C-Store Corner: All in the Family
70
Celebrating Music and Stogies
76
Trench Marketing: Facing the Music
78
Fidel’s Cigar Shop in Missouri and Cigars & Tabac in Kansas hosted launch
parties for D&R’s large-filtered and 1881 Perique cigars, respectively.
Two family business veterans offer five tips for growing your family-owned
retail business.
The Cigar Family Charitable Foundation’s 4th Annual Sax & Cigars
event was a huge hit.
Fidel’s Cigar Shop dug itself out of an early hole created by a contentious
store name, but now it’s a thriving boutique cigar hotspot on the Kansas
City scene.
Rouseco Honors U.S. Military, page 58
Publisher’s Letter ...................................................................... 4
A Retrospective...
News & Trends ........................................................................ 12
Cities seek e-cig ban, minimum age revisited and more
TMA Report ............................................................................ 20
Breaking news from the TMA
Category Manager .................................................................... 48
C-Store cigar sales report
Product Profile ........................................................................ 82
A guide to new and popular outlet products
Trench Marketing: Facing the Music, page 78
NEWS & TRENDS
AWMA Overhauls Annual Convention
The American Wholesale Marketers Association unveiled a new format
for its annual convention and exposition to be held in February.
The newly renamed and reformatted
AWMA Marketplace & Solutions Expo
will be held on February 25 at the Paris
Hotel in Las Vegas, NV. “The convention will feature a broader array of educational and networking opportunities
and more show deals,” reports AWMA
President and CEO Scott Ramminger.
“A lot has changed in the past few
years for all business enterprises, and
the convenience distribution business
is certainly no exception,” he explains.
“At AWMA, we are determined to meet
these new challenges, and our new, redesigned Marketplace & Solutions Expo
is one way we are doing that.”
The culmination of a year working
with and listening to distributors and
manufacturers, the show’s design will
feature:
• New incentives for manufacturers
to offer show deals and better ways of
communicating those deals to distributors at the AWMA Buyer’s Circle.
• More educational opportunities,
including marketplace show floor seminars in the AWMA Solutions Café &
Theatre.
• A Knowledge Bar, where attendees can talk one-on-one with experts
on topics ranging from business profitability to warehouse security and food
safety planning.
• More peer-to-peer networking
Major Cities Seek E-Cig Ban
Chicago and New York City may be the first cities
to ban use of e-cigarettes.
Legislative action to regulate the
use of electronic cigarettes in public places is popping up around
the country, with Chicago and New
York City weighing outright bans.
Already, a Chicago City Council
subcommittee is reportedly studying a proposal to prohibit the use
of e-cigarettes anywhere that the
use of cigarettes and other tobacco products are already forbidden. Supported by Chicago Mayor
Rahm Emanuel and other local officials, the proposal would amend
an existing ordinance regulating
tobacco use in public spaces and
take effect sometime this month,
Chicago Health Commissioner Dr.
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TOBACCO BUSINESS
Bechara Choucair said. It would
also make it illegal to sell e-cigarettes to minors within city limits
and would require retailers to apply for a sales license to sell e-tobacco products.
In New York City, the Council
Health Committee recently voted
to extend its ban on smoking in
bars, restaurants and other indoor
public spaces to include e-cigarettes.
At press time, outgoing Mayor
Michael Bloomberg was expected
to sign the measure, which was
sponsored by City Council Speaker Christine Quinn and Councilman
James Gennaro, into law.
opportunities, including comfortable
space on the marketplace floor, where
attendees can enjoy a beverage while
speaking with other attendees.
The focal point of the AWMA Marketplace & Solutions Expo will be the
trade show floor, where the industry’s
top suppliers will present their products
and services, where much of the education program will take place, and where
an industry reception will be held along
with prize drawings, a networking and
silent auction lounge, and a new products showcase.
More
information
about
the
event can be found at www.awma
marketplace.com.
Chicago Mayor
Seeks Highest Tax
Proposal will raise the city’s
cigarette tax by 75 cents.
Chicago Mayor Rahm Emanuel has
proposed a 50 percent increase to the
city’s cigarette tax, which will bring it to
$7.42 per pack. The move will leapfrog
Chicago ahead of New York as the U.S.
metropolis with the steepest cigarette
taxes.
NEWS & TRENDS
PMI and Altria Augment
Reduced-Risk Efforts
The tobacco giant is gearing up
for forthcoming regulation.
Philip Morris International has announced establishment of
a strategic framework with Altria Group to commercialize
reduced-risk products and e-cigarettes. Under the terms of
a set of licensing, supply and cooperation agreements, Altria will make its e-cigarette products available exclusively to
PMI for commercialization outside the United States, while
PMI will make two of its candidate reduced-risk tobacco
products available exclusively to Altria for commercialization in the United States.
“In the United States it is envisaged that PMI’s products
would be regulated as modified-risk tobacco products and
any commercialization would be subject to U.S. Food and
Drug Administration (FDA) authorization,” says a company
spokesperson. The agreements also provide for cooperation on the scientific assessment, regulatory engagement
and authorization related to these products with the FDA,
and for a similar framework for e-cigarettes with the relevant
regulatory authorities in international markets. In addition,
the agreements provide for the sharing of improvements to
the existing generation of products.
“PMI firmly believes that reduced-risk tobacco products,
as well as e-cigarettes, represent an important step toward
achieving the public health goal of harm reduction, a potential paradigm shift for the industry, and a significant growth
opportunity for the company. Further to our plans for international test market introduction of our candidate reducedrisk products as of the second half of 2014, this agreement
establishes a roadmap for commercialization in the U.S., subject to FDA authorization. At the
same time, it provides us with a
platform to accelerate our entry into international e-cigarette
markets while we continue
to develop future versions,”
says André Calantzopoulos,
PMI’s CEO.
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TOBACCO BUSINESS
HigHligHts
NYC Sues Fedex
Over Cig Delivery
City seeks $52 million from the
company.
New York City is suing FedEx for allegedly delivering millions of contraband cigarettes to people’s
homes, thereby depriving the city of tax revenue.
The lawsuit reportedly seeks $52 million in fines
and unpaid taxes. According to the city, package
delivery company FedEx created a “public nuisance” through a partnership with Shinnecock Indian Nation reservation’s Shinnecock Smoke Shop
in Southampton, New York, which involved shipping untaxed cigarettes to residential homes.
According to city officials, FedEx was engaging
in that activity while also negotiating a 2006 agreement with New York state’s then-attorney general
Eliot Spitzer to stop such deliveries in the state,
an agreement later expanded to cover deliveries
throughout the country. The city alleges that FedEx deprived it of a $15 excise tax on 55,000 cartons of cigarettes that it delivered to city residents
in 9,900 shipments from 2005 to 2012, and that the
deliveries violated various federal and state laws,
including an anti-racketeering statute.
The city seeks $49.5 million in fines, equal to
$5,000 per shipment, plus $2.48 million representing triple the lost tax revenue from FedEx, which
has stopped doing business with known shippers
of untaxed cigarettes.
“Through its contracts with customers, FedEx
prohibits the shipment of tobacco direct[ly] to
consumers and believes the claims made by the
city are overstated and not founded in law,” says
the statement. “FedEx intends to defend this case
while continuing to work with authorities to stop
prohibited tobacco shipments.”
NEWS & TRENDS
Expansion for 7-20-4 Cigars
Miguel Schoedel
Joins Toraño
The growing premium cigar maker unveils a
new headquarters.
Company names new national sales
manager.
Industry veteran Miguel Schoedel has joined
Toraño Family Cigar Company as national sales
manager. Schoedel reports to President Charlie
Toraño, and his responsibilities are two-fold: overseeing the existing nationwide “Toraño Team” of
manufacturers’ representatives and expanding
the sales force to meet future company growth.
Prior to joining Toraño, Schoedel worked in the
premium cigar industry for 10 years, primarily in
sales. His experience includes working indirectly
with the Toraños for three years, and then another
three years as a direct Toraño sales rep covering
Great Lakes states from his base in Cincinnati,
Ohio. For the near term, Schoedel will travel nationally but remain based in Cincinnati; then he
plans to relocate to the Toraño’s headquarters in
Miami.
“Based on Miguel’s outstanding performance as
a Toraño rep, we knew he was our best choice for
the position,” says Charlie
Toraño. “Infectious enthusiasm, passion for cigars
and extensive knowledge of
the marketplace are his key
strengths. We look for great
things from Miguel.”
7-20-4 Cigars is undergoing the finishing touches on its new 9,000-squarefoot office and warehouse set to open in the spring of 2014. “[Our] new
world headquarters would have been only a 10-minute trolley ride from
the original 7-20-4 factory on Elm Street in Manchester, New Hampshire,” notes Rick Ardito, vice president of sales and marketing. “Kurt A.
Kendall, our company founder and president, is intent on paying homage to what once was the world’s largest premium cigar manufacturer:
the creation of R.G. Sullivan in 1874.”
Ardito credits 2013’s marketplace success at “brand building” and
media acclaim for 7-20-4 for the company’s expansion into a larger
facility. “Kurt is grateful for all the generous support he has received by
retailers nationwide, fueling our penetration in[to] the rapidly growing
boutique cigar market,” he says. “He is fulfilling his vision, which from
the outset was to perpetuate Sullivan’s mottos: ‘Blended for every
palate’ and ‘Quality in every case.’ Their ratings confirm [that] he has
accomplished that.” As part of that expansion, the company recently
announced naming Taylor Douglas Hall to the newly created position
of director of inside sales.
In 2014, the company plans to focus on “eventing,” or spending time
with retailers and cigar lovers alike, says Ardito.
With new Director of Inside Sales Taylor Douglas Hall and
a larger company headquarters, 7-20-4 Cigars is ready to
target a larger customer base.
Vapor World Expo Launched
A new all-vapor trade show to take place in Chicago.
TMG International has announced Vapor
World Expo, an all vapor business-to-business conference and exposition that will
take place at the Rosemont Convention
Center, located just minutes from O’Hare International Airport in Chicago, Illinois.
“The market for electronic and vapor
devices is growing worldwide as more
smokers are turning to these products as
an alternative to the traditional tobacco
products,” says Ed O’Connor, president/
CEO of TMG International, in explaining the
show’s premise. “Vapor World Expo is the
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TOBACCO BUSINESS
first of its kind—a trade show that will bring
the world of vapor together for two days to
meet, do business and learn what to expect
as the vapor phenomenon continues to expand across the globe. Offering enormous
consumer appeal, vapor products are positioned to take over a good percentage of the
market as more health-conscious individuals purchase these products.”
Expected buyers include retail stores,
wholesalers, distributors, convenience
stores, headshops and many others
who want to keep up with the vapor
market expansion.
Vapor World Expo 2014 sets the stage for
innovation, product safety, harm reduction,
education, and market profitability for those
individuals involved in the manufacture, distribution and sale of these products.
Reuter Exposition Services, show management for Tobacco Plus Convenience
Expo, will assume the show management
responsibilities for this new launch.
NEWS & TRENDS
Utah Considers Raising Minimum Purchase Age
New law would require tobacco purchasers to be at least 21.
Senator Stuart Reid (R) has proposed
legislation that would raise Utah’s age
limit on tobacco products from 19 to
21. Reid’s bill, known as SB-12, would
raise the purchase age for cigarettes and
other tobacco products (including electronic cigarettes), as well as enact stricter penalties on individuals attempting to
illegally purchase or consume tobacco.
Because the current law restricts minors
from purchasing tobacco, violators under the age of 18 go through the juvenile court system. Under SB-12, 19 and
20-year-olds who buy tobacco would be
guilty of a class C misdemeanor.
The penalties for retailers who sell to
anyone under the legal purchase age
would remain the same: a class C misdemeanor for first time offenders, class
B for the second offense, and class A
for third time offenders. The proposal
has met with some opposition. Senator Todd Weiler (R) raised objections at
the Health and Human Services Interim
Committee session in November, asking why 21 is better than the current
age of 19, or why 21 is an ideal age
compared to 25.
Anti-tobacco forces testified in support of the proposal at that session.
“Increasing the legal age of sale is likely
to have a significant impact in reducing
tobacco use among the young and limit
their access to this highly addictive,
deadly product,” noted Beverly May,
regional advocacy director for the Campaign for Tobacco-Free Kids, speaking
before the interim committee. “Young
brains are still developing through the
teen years and offsetting the daily use
of tobacco products will reduce the
addiction and dependency on nicotine. Any effort to prevent tobacco use
among young people is worthwhile. It
will save lives.”
Utah is not alone in contemplating an
increase to the tobacco purchase age.
New York City has already raised the
age to 21, while Chicago, New Jersey
and New York state all have similar legislation pending.
Arango Takes on Rattray
Cigar company is now the exclusive U.S. distributor
for Rattray’s Pipes and Tobaccos.
Arango Cigar Co., a national distributor of
a wide variety of tobacco products and related accessories, is now offering the entire product line of 19 Rattray’s Epicurean
Pipe Tobaccos. All are hand-blended and
packed in 100-gram tins, with five also
offered in 50-gram tins. Additionally, 14
blends are available in 17.5-ounce bags.
“Our best-selling Rattray’s tobaccos
are Marlin Flake, Highland Targe and Old
Gowrie,” explains Michael Gold, Arango’s
president. “These are also the namesakes
for three Rattray’s briar pipe models—
Marlin, Highland and Old Gowrie—which
Arango stocks as well. These pipes fall
into the average price range of finer pieces in the pipe market.”
Originally founded in 1903 by Charles
Rattray, Rattray’s Pipes and Tobaccos
grew into the largest tobacco shop in
Scotland’s capital of Perth. Rattray soon
gained international stature as a master
blender of unique custom and stock tobaccos for discriminating pipe lovers, and
his tobacco remains one of the world’s
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TOBACCO BUSINESS
most highly acclaimed brands.
Kohlhase, Kopp & Co. GmbH
& Co. KG (Offenbach am Main,
Germany) acquired Rattray’s
soon after forming their company in 1976. The original Scottish
and English mixtures are still
blended, following Charles’s
century-old recipes. The new
owners added aromatics: Virginia, Carolina Burley and Cavendish tobaccos for
their mellow flavor and aroma. Other than
one blend, Bagpiper’s Dream, which contains a touch of fine cognac, Rattray’s tobaccos are blended without additives.
“For decades, the respected Rattray’s
name has retained its prominence for
smoking satisfaction and uncompromising production standards,” says Gold.
“These fine tobaccos and pipes are a
valuable part of Arango’s pipe product category, and we are proud to offer
them to a welcoming and discerning pipe
world.” Arango Cigar, Northbrook, Illinois,
800-222-4427
See You in Vegas!
The Tobacco Plus Convenience
Expo (formerly known as TPE) will
welcome industry players from
around the world to Las Vegas this
month.
January 29-30
Las Vegas
TMA REPORT
By FARRELL DELMAN
Breaking news From the tma
the following are excerpts from harm reduction,
tobacco regulation and other tobacco-related news.
On harm reductiOn…
…San Francisco, California-based
Ploom, inventor and manufacturer
of the premium vaporizer Pax,
which heats tobacco without
producing
smoke,
said
that
following the recent discovery of
counterfeit products that contain
plastic materials that are not
stable at operating temperature, it
conducted investigations to locate
manufacturers of the fake products
and initiated legal actions in China
to stop their production and sales,
noting that Ploom’s foremost goal is
to protect consumers from poorlyperforming and potentially unsafe
counterfeit devices.
…The
American
E-Liquid
Manufacturing Standards Association
(AEMSA) had its third “listening
session” with the Food and Drug
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TOBACCO BUSINESS
Administration on December 19, at
which Dr. Konstantinos Farsalinos, a
cardiologist recognized as a leading
e-cig medical researcher, made a
primary presentation on his study
on
plasma
nicotine
absorption
levels (PNLs). The study examined
nicotine delivered from both “cigalikes” and representative PNLs from
a “new generation” device used by
experienced e-cig consumers and
novice e-cig users (tobacco smokers),
and found that “PNLs from ciga-likes
were dramatically lower as compared
to tobacco cigarettes.” The new
generation device “showed evidence
of being more efficient at nicotine
delivery than the ciga-likes and came
closer to tobacco cigarette PNLs over
time, yet indicated tobacco cigarettes
still deliver substantively more nicotine
puff-for-puff,” while novice e-cig users’
PNLs indicated less nicotine absorption
compared to experienced e-cig users.
Farrell Delman,
President, TMA
…AEMSA President Lou Ritter and
Counsel Azim Chowdhury of Keller
and Heckman LLP recently met with
representatives at the U.S. Office of
Management and Budget’s (OMB)
Office of Information and Regulatory
Affairs (OIRA) in December. At the
meeting, AEMSA said, among other
things, that the Family Smoking
Prevention and Tobacco Control
Act broadly defines a “tobacco
product” to include substances
that are derived from tobacco such
as nicotine, but “products that
only contain such tobacco-derived
substances should not be regulated
in the same manner” as cigarettes,
smokeless tobacco, RYO tobacco
and other products that contain
tobacco.
Tobacco-containing
products, especially those that are
combusted, are the most harmful,
while e-cigs and the e-liquid used
in them are “demonstrably less
TMA REPORT
harmful;” there is little to no
evidence that e-cigs are used as a
gateway to conventional cigarettes;
the
premarket
authorization
requirements in the FSPTCA should
not apply to e-cigs and e-liquids;
the grandfather date of February
15, 2007 in the FSPTCA should not
apply to e-cigs and other tobaccoderived products, which were not
contemplated when Congress was
drafting the legislation; all e-cigs
and e-liquids currently on the
market should be allowed to remain
on the market without obtaining
premarket approval from the FDA;
and the deeming regulation should
allow for products already on the
market to smoothly transition to
fully regulated status, and should
create a reasonable premarket
authorization process for new
products that focuses on ingredient
and
manufacturing
process
disclosures to ensure purity and
safety.
…Wisconsin
Sen.
Glenn
Grothman (R-West Bend), who
has introduced a bill that would
exempt e-cigs from the state’s
2010 public smoking ban, said the
bill is intended to help smokers quit
regular cigarettes.
…Sheriff Millard Gustafson of
Gage County, Nebraska said that he
is seeking an exemption for e-cigs
at the Gage County Detention
Center from the ban on tobacco
products on county property.
…In an op-ed to The New York
Times, New York State Department
of Health Commissioner Nira V.
Shah said that “much remains
unknown” about e-cigs, including
how smokers and ex-smokers
use the device and whether it will
reverse the recent decline in youth
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TOBACCO BUSINESS
smoking, and that “the lack of
science on critical questions should
be cause for close regulation of
e-cigarettes until these questions
are better answered, rather than
careless optimism with the lives of
our youth.”
…In a December 12 Picture of the
Week report, RBC Capital Markets
analysts reported that the increasing
consumer interest in customizable
“vaporizers” and “vape shops” are
becoming a rising risk for traditional
branded
e-cigs,
with
Google
search
interest
in
“electronic
cigarettes”
having
peaked
in
February 2012 and January 2013,
while interest in “vapor shops” just
peaked in December, adding that
some reasons for the increasing
popularity of vaporizers are: 1. cost
efficiency, as e-liquids are cheaper
than cartomizers; 2. the ability to
customize e-liquids; 3. higher vapor
volume; 4. an easier pull or draw
for the consumer; and 5. a longerlasting battery.
…A bill introduced December
11 in the Wisconsin Senate would
specify that the term “smoking,” for
purposes of the general ban against
smoking in indoor places, does
not include holding, inhaling or
exhaling a vapor from an electronic
device that does not contain
tobacco, and would in effect allow
the use of e-cigs in places where
state law prohibits smoking.
…The New York Times’ “The
Opinion Pages” columnist Joe
Nocera writes that the e-cigarette
is
“the
first
harm-reduction
product to gain serious traction
among American smokers” and
should be regulated for what it
is—“a pharmaceutical product that
delivers nicotine, not a conduit
for tobacco poison”—with health
claims allowed so long as they are
backed up with real science.
…A New York Times op-ed by
Prof. Amy Fairchild and Associate
Prof. James Colgrove of Columbia
University Mailman School of Public
Health questions the New York City
Council’s efforts to ban e-cig use
in places where smoking is already
banned, and instead suggests that
the FDA regulate e-cigs as products
“sold or distributed for use to
reduce harm or the risk of tobaccorelated
disease,”
as
“history
shows that harm reduction—the
doctrine that many risks cannot
be eradicated and that efforts
are best spent on minimizing
the resulting harm—has had an
important place in anti-smoking
efforts and suggests that regulation
is better than prohibition,” and that
it would be counterproductive to
force e-cigs out of sight if they can
even slightly reduce the number of
tobacco-related deaths.
On the Fda…
…The U.S. Food and Drug
Administration
announced
September 26 that its Center for
Tobacco Products (CTP) Office of
Science issued additional tobacco
product review decisions allowing
the sale and marketing of four new
products through the substantial
equivalence pathway: 1. Elements
Aficionado 1¼ roll-your-own papers
and tips by HBI International;
2. Elements Aficionado KS Slim
RYO papers and tips, also by
HBI International; 3. Top Regular
100mm RYO filtered cigarette tubes
by Republic Tobacco LP; and 4. Top
TMA REPORT
Gold 100mm RYO filtered cigarette
tubes also by Republic Tobacco
LP. The FDA updated its “Tobacco
Product Marketing Orders” webpage
to reflect the new SE orders.
…An FDA notice published in
the December 19 Federal Register
with Docket No. FDA-2013-N-1588
solicits comments for 60 days
on exemptions from substantial
equivalence
requirements
for
tobacco products. See https://
federalregister.gov/a/2013-30137.
…The OMB’s OIRA posted rules
governing the FDA’s issuance of a
proposed rule to deem products
that meet the statutory definition
of “tobacco product” (other than
cigarettes, cigarette tobacco, rollyour-own tobacco and smokeless
tobacco, which are already under
FDA regulation) to be subject to the
Federal Food, Drug, and Cosmetic
Act, as amended by the Family
Smoking Prevention and Tobacco
Control Act.
…OIRA’s
meeting
records
show that it hosted five separate
meetings with stakeholders in
November, when five e-cig industry
executives argued during one of the
meetings against treating e-cigs
like traditional cigarettes, saying
that the devices “are a desperately
needed new approach to stopping
tobacco smoking” and “[i]f we are
serious about reducing spiraling
health care costs, there is no
better way to have a dramatic and
near term impact than fostering
e-cigarette use.” E-cig manufacturer
NJOY called for “appropriate”
regulation that would not ban TV
ads or require e-cigs to be sold
behind store counters.
…According to law firm Troutman
Sanders, the FDA’s letter to the
National Association of Attorneys
24
TOBACCO BUSINESS
General, in response to a request
signed by 42 state and territorial
attorneys
general
to
regulate
e-cigs, agrees that e-cigs should
be regulated and indicates that
the deeming regulations will apply
all generally applicable provisions
of the Family Smoking Prevention
and Tobacco Control Act to the
newly deemed tobacco products
that fall within the definition of
tobacco
products,
presumably
including e-cigs, but also suggests
that other, non-generally applicable
requirements will be applied on a
case-by-case basis.
…An article in The Wall Street
Journal’s “Corporate Intelligence”
blog says that the success of
e-cigs has the potential of making
nicotine
a
“socially-accepted
stimulant [that] people can enjoy
in relative safety,” but a lot depends
on “whether regulators and antismoking campaigners will view
e-cigarettes as an opportunity to
reduce the rate of smoking and
related illnesses, or as a threat that
could extend the lifespan of the very
cigarette industry that many groups
instinctively oppose.”
…A report out of the University
of Waterloo titled ITC Canada
National Report and prepared by
the International Tobacco Control
Policy Evaluation Project says,
among other things, that e-cigs are
readily available in retail outlets
and that “it is almost certain that
e-cigarettes are less harmful than
tobacco cigarettes,” but the degree
to which they may benefit public
health will depend on whether they
promote dual use and whether
they encourage youth initiation;
cigarette affordability increased
by 1.4 percent per year between
2002 and 2010; and 66 percent of
smokers said in 2011 that they would
“support” or “strongly support” a
law to ban additives and flavorings.
…Forbes
contributor
Rob
Waters, Phillip Gardiner of the
African American Tobacco Control
Leadership Council, and Larry Cohen
and Dalila Butler of the Prevention
Institute
wrote
that
menthol
cigarettes are “unequal-opportunity
killers that disproportionately hook
young people, African Americans
and other people of color, harming
their health and reducing their life
expectancy,” and urge the FDA to
ban the flavoring.
…An
Assembly
Concurrent
Resolution introduced in New
Jersey on November 18 would urge
the FDA and President Obama to
enact measures overseeing the
sale and use of electronic smoking
devices and conduct research on
the health impacts of the devices on
users and third parties.
…The U.S. Food and Drug
Administration announced November
15 that it is authorizing the sale
and marketing of eight additional
tobacco products, all manufactured
by
Swedish
Match
North
America, through the substantial
equivalence pathway: Timber Wolf
Long Cut Wintergreen, Renegade
Long Cut Straight, Renegade Long
Cut Wintergreen, Timber Wolf
Long Cut Apple, Timber Wolf Long
Cut Peach, Timber Wolf Long Cut
Straight, Timber Wolf Long Cut Cool
Wintergreen, and Timber Wolf Fine
Cut Wintergreen.
…In a November 4 letter to
FDA Commissioner Margaret A.
Hamburg, U.S. Reps. Henry A.
Waxman
(D-California),
Diana
DeGette (D-Colorado) and Frank
Pallone, Jr. (D-New Jersey) called
on the agency to act immediately
TMA REPORT
With its exclusive agreement with
Altria, Philip Morris International
seeks quick entry to the overseas
e-cig category.
to regulate e-cigs, alleging that
e-cig manufacturers “are taking
advantage of the absence of
regulation to market their products
to young smokers” by “using many
of the exact same advertising
and
promotional
techniques
used for decades by cigarette
manufacturers to hook teenagers
on their products,” including TV
and
magazine
advertisements,
celebrity endorsements, sport and
event sponsorships, and the use of
cartoon characters.
…U.S. Centers for Disease Control
and Prevention (CDC) Director Thomas
Frieden said the U.S.’s overall progress
26
TOBACCO BUSINESS
against smoking is threatened by new
products like e-cigs and little cigars,
which he said fall through loopholes in
federal regulations.
On Other tObaccO news…
…Altria Group and Philip Morris
International announced December
20 that they entered into a series of
licensing, supply and agreements
whereby PMI has the right to
exclusively sell Altria’s e-vapor
products outside the U.S., Altria
has the right to exclusively sell in
the U.S. two “candidate reduced-
risk tobacco products” that heat
tobacco, which PMI is developing,
and the two would work together
on scientific assessments and
regulatory authorizations.
…Stifel analysts said that the deal
gives PMI a “quick entry ” into the
e-cig category and the fast-growing
e-cig markets like the UK, France
and Italy, while also smoothing out
the process of working with the FDA
and getting approval for Altria to
sell PMI’s Platform 1 and Platform
2 products as modified-risk tobacco
products in the U.S., though any
FDA approval of MRTPs is expected
to take “at least two years.” tB
Staying Alert
for Regulation
Will 2014 be the year cigars become FDA-regulated?
By Renee M. Covino
I
n late October, the Cigar
Association of America (CAA)
issued an industry alert: deeming
regulation for cigars was on the move.
The CAA confirmed that a deeming
regulation that affects all tobacco
products (including cigars) moved
from the U.S. Department of Health
and Human Services to the White
House Office of Management and
Budget (OMB).
“The content of the deeming
regulation is unknown, but this
movement is evidence that the
regulation is progressing forward,”
the association reported. It stated
that it would continue to monitor the
situation closely, as well as continue to
work with the federal government “to
ensure that the concerns of the cigar
28
TOBACCO BUSINESS
industry are noted and understood.”
Tobacco Business checked in with
Craig Williamson, president and
CEO of CAA, to find out what that
meant exactly, and how big of an
industry concern it was.
“The No. 1 issue on our screen is
absolutely being regulated by the FDA
(Food and Drug Administration),”
Williamson confirms. “We always
believed we would be regulated some
day; we would love to be able to say
to the FDA, ‘don’t regulate us,’ but we
know they already have the authority
and will take it, sooner rather than
later now.”
As a refresher, in 2009 President
Obama signed into law the Family
Smoking Prevention and Tobacco
Control Act, which required the
FDA to regulate
cigarettes. The bill
also authorized the
FDA to regulate
other types of
tobacco, but didn’t
require
such
Craig Williamson
regulation. Now,
however, it looks as if the FDA may
exercise that regulatory authority.
Educating from
fiEld to ShElf
From the CAA’s perspective, the
question becomes how cigars will
be regulated—or more accurately, to
what extent, which is where the CAA’s
knowledge and intervention comes in.
During the past two years, the CAA
has held seven government meetings
“There are those in the premium cigar industry
that feel they should not be regulated; we disagree.
We think it should be all regulated or none regulated.”
on behalf of the industry—five with
the FDA and two with the OMB,
according to Williamson. Representing
cigars of all shapes and sizes (along
with pipe tobacco), the CAA recently
educated the government about cigars
“from soup to nuts, or actually, from
field to shelf; from when the product
is first put in the ground, what the
seed is like, through growth, and then
from manufacturer to consumer,”
Williamson explains.
One of the biggest themes brought
forward by the CAA is how cigars
differ greatly from their cigarette
counterparts. “We explained from
the premium side how different
the manufacturing process is from
cigarettes,” says Williamson. “Basically,
cigarettes are automated, [whereas]
30
TOBACCO BUSINESS
premium cigars are very labor-intense.
Some of our machinery is very old,
and we have a lot of hand-rollers, too.”
While this might seem obvious to
industry members, it is apparently not
obvious to legislators and government
regulators.
Another talking point from the
cigar industry to the government has
been how different cigars are within
the industry itself. Here, there has
been cigar input from manufacturers,
including from machine-made and
little cigar makers such as Swisher.
“Cigars come in so many different
shapes and sizes, and one-size-fits-all
regulation that applies to cigarettes
and smokeless products won’t work for
the cigar industry,” says Joe Augustus,
senior vice president of global affairs
for Swisher. He is encouraged since
“the FDA has been very receptive
to our meetings,” but acknowledges
“whether they accept our premise or
not, we will see when regulations come
out.”
“all or nothing”
lEgiSlation?
But while Williamson supports
internal
cigar
distinction—
and
appropriate
corresponding
legislation—Swisher’s Augustus does
not support one side being exempt
entirely from regulation. “There are
those in the premium cigar industry
that feel they should not be regulated;
we disagree,” he emphasizes. “We
think it should be all regulated or
none regulated. We agree that the
regulations should reflect the
differences in our products—that
all products shouldn’t be treated as
the same. The FDA has asked us for
clarification on some of the points we
provided, and we reiterated our ‘all or
nothing’ belief.”
Meanwhile, from the opposite
standpoint, the International Premium
Cigar & Pipe Retailers Association
(IPCPR) and Cigar Rights of
America (CRA) sent a letter in early
December to the OMB to argue
against impending regulation of cigars
by the FDA, knowing that the OMB
is currently evaluating rules proposed
by the FDA.
The nine-page letter makes the
case that there is “no public health
basis to conclude that premium cigars
should be regulated by FDA under
the Tobacco Control Act.” It states
that there is no legal basis for such
regulation because there is no evidence
that premium cigars are addictive
32
TOBACCO BUSINESS
or used by young
people.
The letter notes that
the Tobacco Control Act gives the
Food and Drug Administration
“the authority to address issues of
particular concern to public health
officials, especially the use of tobacco
by young people and dependence on
tobacco,” and also should “continue to
permit the sale of tobacco products to
adults in conjunction with measures to
ensure they are not sold or accessible
to underage purchasers.”
It also uses scientific research, some
from the National Cancer Institute, to
demonstrate that handmade cigars are
not addictive when used properly.
The letter makes the case that if
the FDA and OMB apply the law in
a scientific manner, the FDA should
not create any new regulations for
handmade
cigars.
Furthermore,
should the FDA attempt to regulate
handmade cigars, the arguments in
the letter are likely to be the same
arguments in any legal challenges to
FDA regulation. It is signed by Finnie
P. Helmuth, president of IPCPR, and
Glynn Loope, executive director of
CRA.
Bracing for changE
But the CAA and manufacturers like
Swisher are bracing for change in the
form of deeming regulations. The CAA’s
Williamson made it a point to mention
“we were the first in and the last out”
to visit with the government when
it was asking for industry comment
on its proposed rules, now with the
OMB. He is expecting something back
in the first quarter of 2014. Swisher’s
Augustus agrees in saying, “I think
“They can’t treat us like cigarettes.
If they go by the 2007 date [new product SKUs
that were introduced before 2007 were grandfathered
in cigarette regulations], that kills us in cigars
because we will have 10,000 new SKUs a year, which
is not the case with cigarettes.”
we’ll see something [in 2014].”
The problem is that the OMB
has no set timeframe to get back to
the FDA. But once it does and its
concerns are expressed, it will be an
issue of whether those concerns are
minor or major, and whether the rules
will have to be rewritten, according to
Augustus.
The hope is that the important
cigar issues brought forth by the
CAA and others—methodology, good
manufacturing practices, flavorings
and SKU introductions—will produce
a distinction in regulation, one that is
less harsh than those on cigarettes.
“They can’t treat us like cigarettes,”
Williamson stresses. “If they go by the
2007 date [new product SKUs that
were introduced before 2007 were
34
TOBACCO BUSINESS
grandfathered in cigarette regulations],
that kills us in cigars because we will
have 10,000 new SKUs a year, which
is not the case with cigarettes. It may
be the same cigar name but it’s a little
thicker or shorter so it has a different
SKU. We can’t control the crops every
year,” he continues. “The rain, the
moisture content, what’s in the soil
that year—every year our products
change. Manufacturers try to get it
as close as possible to the year before,
but there are a lot of outside forces
we can’t control such as weather. The
2007 date is absolutely not fair to us.”
So what’s his wish on a fair date
for cigars? “Ideally, I’d like when the
rule takes effect—that would be the
date before which products could be
grandfathered,” he says.
commEntS from
thE rEtail gallEry
From the retail perspective, the cigar
industry is expecting FDA regulation
to remain as it is for cigarettes and
smokeless: adult-only facilities can
remain self-service and consumers can
come in to “touch and feel the freshness
of a cigar” and make single sale purchases,
says Augustus.
However, while retail groups have met
with the FDA already, it will continue to be
important that the retail voice is heard—
perhaps even more important after the ruling
comes out and comments are requested,
he says. “That is the time for retailers
to make sure they submit their
comments on what their preferences are
and how their businesses can be
maintained.” TB
Slow Smoking
A leisurely pipe offers the pause you need when life is racing by.
By Erik Stokkebye
A
nother Sunday night dinner
with family and friends—we’ve
spent all afternoon slow roasting
a beautiful fat chicken and baked fresh
bread that was allowed to rise as long
as it needed to be just so…we’ve picked
out the perfect wine and set the table
with care, yes every night is a candlelit
dinner at our house, a cozy remnant of
our Danish traditions.
Of course, if you eat just to get full, a
box of fast-food chicken nuggets serves
the same purpose, but slow cooking is
gaining in popularity as more and more
people decide to take the time to enjoy
the process, be more in control of what
they eat and stop rushing everything.
By the same token, pipe smoking is far
from convenient. If you are just after a
quick hit, a “nicotine delivery device” will
36
TOBACCO BUSINESS
provide that, but how different it is from
savoring the ritual of enjoying a good
pipe!
The discreet sigh of opening a fresh
tin of tobacco, the way the beautiful
bright Virginias play against the darker
mellow—almost black—tobaccos, the
feel of your favorite pipe in your hand,
smooth but somehow not hard. Finally
inhaling the deep aromas of the blend,
feeling around for just the right amount
and filling it in your pipe—not too firm
or too loose—but, like Goldilocks, just
right. All this anticipation leads up to
the final enjoyment of smoking your
pipe.
Pipe smoking appeals to all the senses,
and a pipe is to be relished, you can’t rush it.
But in today’s world, where everything
is premade, where electronic cigarettes are
assembled in China,
I enjoy knowing that
I chose to fill this
specific pipe that I
picked out, maybe
even blending two
tobaccos
together,
creating my own
blend. I am in control
of what and how I
am smoking.
These days, time is the one indulgence
we rarely allow ourselves, and maybe that
makes it the ultimate luxury. So with all
the hustle and bustle going on in our lives,
try to take the time and enjoy relaxing
with an unhurried pipe full of your favorite
tobacco. Put the leisure back in your life—
at least for the moments it takes to sit and
truly enjoy slow smoking. TB
CATEGORY MANAGER
CIgArETTES & E-CIgS
Examining E-Cigarette Sales
C
ompetitors in the emerging e-cigarette category
continue to jockey for position in the various retail
channels. Thus far, Lorillard’s blu seems to be taking
the lead in key retail segments, according to Nielsen sales
data. While the brand lost some market share over the past
few months, blu remains the e-cigarette category leader in
convenience stores, according to Nielsen, which says it held
44.8 percent dollar volume share in the c-store market as of the
end of November. NJOY held the No. 2 slot with a 20.6 percent
c-store share and Logic came in at No. 3 with 18.5 percent.
Blu also held a 48.4 percent share in Nielsen’s Expanded All
Outlets Combined (xAOC) channel, which includes club, dollar
and mass retail outlets. Other leading brands in that channel
were FIN (15.3 percent share), Mistic (14.1 percent share) and
NJOY (9.4 percent share), according to Nielsen data.
Cigarette sales, meanwhile, continue to decline. In the c-store
channel, dollar sales of traditional cigarettes fell 1.3 percent
during the four weeks ending November 23, 2013, with dollar
sales of Marlboro brands falling even more (2 percent) during
the period.
To follow are charts depicting the volume and category
pricing trends for e-cigarettes and traditional cigarettes. TB
C-Store E-Cigarette Category Pricing, Volume, Dollar Share and Unit Share Trends
e-Cigarette Category Volume vs Pricing Growth
140%
40%
120%
30%
80%
20%
60%
10%
Pricing
Volume
100%
40%
0%
20%
0%
11/24/12 12/22/12 1/19/13
2/16/13
3/16/13
4/13/13
5/11/13
6/08/13
7/06/13
8/03/13
8/31/13
9/28/13 10/26/13 11/23/13
-10%
C-Store E-Cigarette Category Pricing, Volume, Dollar Share and Unit Share Trends
Cigarette Category Volume vs Pricing Growth
3.5%
0%
-0.5%
3%
-1%
Volume
-1.5%
2%
-2%
1.5%
-2.5%
1%
-3%
0.5%
-3.5%
-4%
38
Pricing
2.5%
11/24/12 12/22/12 1/19/13
2/16/13
3/16/13
4/13/13
5/11/13
Source: Nielsen C-Track Database and Wells Fargo Securities, LLC
TOBACCO BUSINESS
JANUAry/FEBrUAry 2014
6/08/13
7/06/13
8/03/13
8/31/13
9/28/13 10/26/13 11/23/13
Volume Growth
Pricing Growth
0%
electric
ALLEY
How Very
Resourceful
The electronic cigarette industry is now bursting with association and expert support; here
are some trusty “e-resources” in one compiling.
By Renee M. Covino
E
lectronic cigarette resources are
literally all over the (global)
map these days. Tobacco Business
recently compiled some U.S. “e-support”
for the nascent industry—in both group
and individual form—from those who
can serve as reliable resources for our
readers:
American E-Liquid Manufacturing
Standards Association (AEMSA)—
Founded in 2012, AEMSA is a
manufacturers’
trade
association
dedicated to creating responsible and
sustainable standards for the safe
manufacturing of “e-liquids” used in
electronic cigarettes. AEMSA is an
all-volunteer organization formed by
American manufacturers of e-liquids
to promote safety and responsibility
through
self-regulation.
(www.
AEMSA.org;
[email protected];
877-68-AEMSA)
Consumer Advocates for Smoke-free
Alternatives Association (CASAA)—
Founded in 2009 by members of an
online forum as an advocacy group to raise
awareness and protect consumer rights to
access tobacco harm reduction (THR)
alternatives, CASAA was created as an
answer to the anti-tobacco harm reduction
groups’ efforts to ban THR products. It
now tallies over 7,400 members. (www.
casaa.org; 202-241-9117)
40
TOBACCO BUSINESS
SFATA’s Cynthia Cabrera
Smoke-Free Alternatives Trade
Association
(SFATA)—Founded
in 2011, SFATA serves as an
educational and lobbying resource
for manufacturers, wholesalers, retail
sellers and distributors of Personal
Electronic Vaporizing Units (PEVUs),
which includes, but is not limited to,
e-cigs. SFATA keeps members abreast
of state and federal regulatory issues
and intends to serve as a powerful
industry advocate with government
officials. SFATA is also committed
to providing a framework for
meaningful industry standards, Good
Manufacturing Practices (GMPs), and
furthering the advancement of peerreviewed scientific studies. (www.sfata.
org; [email protected]; 218-22-SFATA)
Tobacco Vapor Electronic Cigarette
Association
(TVECA)—Founded
in 2008 as the Electronic Cigarette
Association, TVECA wants to be
known as the responding voice to all
media and legislative requests for
information on electronic cigarettes.
TVECA invites all industry players to
reach out to it for further information
of all completed science, all current
and past legislative and judicial
actions, or any general question
about “this amazing new technology.”
(www.tveca.com;
[email protected];
888-99-TVECA)
AEMSA’s Lou Ritter and Linc Williams
TVECA’s Tom Kiklas
electric
ALLEY
Electronic Cigarette Industry Group
(ECIG)—A non-profit 501c6 association
of consumers, manufacturers, importers
and distributors of electronic cigarettes,
ECIG is advocating for fair regulation
of e-cigarettes. The organization works
with manufacturers, importers and
distributors of electronic cigarettes to
lobby for balanced state and federal
regulations and provides regulatory
news and compliance assistance to
its members. (www.ecigarettegroup.
org; [email protected],
888-943-8947)
A Who’s Who
of E-Cig ExpErts
Phil
Daman,
Esq./Daman
&
Associates—Daman is the president
of SFATA (see above), as well as
an attorney and founding member
of Daman & Associates, LLC, a law firm
with offices in Los Angeles, Boston and
Philadelphia. Daman’s practice focuses
on counseling clients in various matters
involving the protection and use of their
intellectual property. He and the firm
are experienced in advising investors,
technologists, manufacturers, distributors
and purveyors of Personal Electronic
Vaporizing Units (PEVUs), including
electronic cigars and electronic cigarettes,
on transactional, litigation and regulatory
42
TOBACCO BUSINESS
issues in the United States and abroad.
(www.damanllc.com;
phillip.daman@
damanllc.com; 617-221-3737)
Dr. Joel Nitzkin—Now a senior fellow in
tobacco policy for the R Street Institute,
a national think tank headquartered in
Washington, D.C., Nitzkin has been in
the private practice of public health as a
health policy consultant since the mid1990s. In 2007 while serving as co-chair
of the Tobacco Control Task Force of
the American Association of Public
Health Physicians, he played a lead role
in exploring policy options for reducing
tobacco-attributable illness. This effort
focused his attention on THR. In 2012,
Nitzkin made presentations on THR
and related issues to a variety of tobacco
industry, medical, public health and state
legislative audiences. He has also taken
action to place THR on the agenda of
the House of Delegates of the American
Medical Association. (www.rstreet.org;
[email protected]; 202-525-5717) Dr. Carl Phillips—In 2012 Phillips
joined the board of CASAA in the
role of scientific director, merging his
public health research and education
organization, TobaccoHarmReduction.
org, into CASAA. Phillips oversees
most scientific communication from
CASAA. He spent most of his career
as a professor of public health science
and now works as an epidemiologic and
economic consultant along with being
chief economist for the Humane Society
of the United States. ([email protected])
Professor Brad Rodu—As a professor of
medicine at the University of Louisville,
Rodu holds an endowed chair in tobacco
harm reduction research, and is a member
of the James Graham Brown Cancer
Center at U of L. For the past 20 years,
he has been involved in research and
policy development regarding THR. He
wrote the book, For Smokers Only: How
Smokeless Tobacco Can Save Your Life. His
research is supported by unrestricted
grants from tobacco manufacturers
to the U of L and by the Kentucky
Research Challenge Trust Fund. (www.
rodutobaccotruth.blogspot.com, brad.
[email protected])
Dr. Michael Siegel—As a professor in
the Department of Community Health
Sciences, Boston University School
of Public Health, Siegel has 25 years
experience in the field of tobacco control.
He has been called an “enthusiastic
supporter of tobacco harm reduction and
a tireless exposer of tobacco myths” (via his
blog) that many in the e-cigarette world
look up to. (tobaccoanalysis.blogspot.com;
[email protected]; 617-638-5167) TB
Some of the tobacco
outlet industry’s
Top 50 reTailerS,
which all together
have headquarters
Spanning 25 STaTeS,
reveal their 2013
highs and lows, along
with a few
2014
expecTaTionS.
44
TOBACCO BUSINESS
See page 56
for
The 2014
TB Top 50 List
Announcing
TB’s Top 50 Retailers
Domestic perspectives from the top of the tobacco chain(s)
By Renée M. Covino
T
The top of the tobacco chain speaks
out. As 2013 came to a close, the
general assessment from some of
Tobacco Business’s Top 50 tobacco outlet
retailers was that there was a good
deal of good news to report amidst the
expected challenges. And while good
news came in varied forms, every top
player mentioned electronic cigarettes/
non-combustible tobacco alternatives
as a top trend that is not letting up.
As for 2014, there is generally a
sentiment of cautious optimism for a
steady year ahead.
Here are seven specific viewpoints
from top-level tobacco retailers that
range in size from 15 stores to more
than 800.
Expansion and Education
As the largest chain of authorized
dealers (currently 816) in the
business, Smoker Friendly of Boulder,
Colorado, recognizes that the best
business issue for its stores and the
industry last year was “the continued
amazing growth in the e-cig/vape
category,” mentions Jeremy Weiner,
marketing and purchasing director.
At Smoker Friendly stores, e-cig/
vape sections were carved out and the
chain continued to expand the product
selection throughout the year. “We also
provided our employees [with] sales
training classes to educate them on all
the different brands we currently carry,”
Weiner adds. “We feel that having
well-educated employees who are able
to explain the differences between
e-cigs and vapes gives us a competitive
advantage over convenience locations.”
Other good news came in the
form of moist tobacco/snus and
premium cigars, which also continue
to be growth categories for the chain,
according to Weiner. “Many of the
premium manufacturers have come
out with fresh foil packs so that stores
without humidified cases can carry a
nice premium selection without the
worry of humidification,” he points
out. “We have [also] added a few more
walk-in humidors and lounges during
2013. This continues to help increase
the premium cigar sales in our Smoker
Friendly stores.”
The category that has been the most
challenging to the chain is domestic
cigars. “Manufacturers continue to
bring out pre-priced or discounted
pack offerings (i.e. five for $3 or three
for $2), which are available as everyday
offerings,” Weiner explains. “This
continues to lower the dollars spent
in the store and compresses the profit
margin.”
For 2014, Weiner expects to see
continued growth in the e-cig/vape
category, along with moist tobacco,
snus and premium cigars. However, he
believes that, “as more major cigarette
manufacturers enter the e-cig category,
other brands may get squeezed out
of the category in many stores due to
space constraints and specific contract
requirements.” He recognizes that
“the big unknown” is if the FDA gets
involved.
45
TOBACCO BUSINESS
Therefore, his wish this
year is “that the FDA deems
the e-cig category a reducedharm alternative to cigarettes
and doesn’t regulate them the
same as cigarettes.” Similarly,
he hopes that the FDA comes
to realize that “premium cigars
are vastly different from domestic
machine-made cigars, and if
they do decide to regulate cigars,
premium cigars will not fall under
that time regulation.”
prEmium cigars and a
paradigm shift
The best business news for Wild
Bill’s Tobacco, based in Birmingham,
Michigan, with 50 stores, was when the
state of Michigan enacted a 50-cent tax
cap on individual cigars at the end of
2012. “It allowed us to be much more
competitive with our online competitors
last year, which led to an increase in
sales,” explains Justin Samona, chief
marketing officer. Wild Bill’s specializes
in premium cigars, with cigar lounges in
20 locations and walk-in humidors with
Spanish cedar paneling and advanced
humidification systems in all 50 stores.
46
TOBACCO BUSINESS
“We see the
paradigm shift
and we feel
that e-cigs
are here to
stay.”
But the top trend in 2013 was the
electronic cigarette craze in Wild Bill’s
stores, just as it was across America,
according to Samona. “We see the
paradigm shift and we feel that e-cigs
are here to stay,” he says. “Wild Bill’s
is quickly becoming known as the
electronic cigarette destination. Our
stores are equipped with modern e-cig
supercenters, which we call ‘Mr. Vapor.’
The chrome shelving and blue LED
lights attract customers right when they
enter the store. Customers
can sample disposable e-cigs,
rechargeable kits, tank kits,
mod systems and over 100
different flavors of e-liquids and
strengths.”
In 2013, the chain improved
its business through customer
service
management.
“The
HR management team here
launched
many
creative
bonus and incentive plans,”
Samona
explained.
One
such plan that caused great
excitement was the profit-sharing
program, which is eligible to all
managers that have been with
the company for three or more years.
The thinking behind it comes from
Mike Samona, CEO. “When you have
loyal, satisfied customers, your business
becomes more referable, thus more
profitable,” he says. “We’ve discovered
that staff members will provide much
better service to our customers, whether
it’s through up-selling, converting or
handling complaints, when they know
a percentage of the profits will go to
them.”
Wild Bill’s outlook for 2014 is
ongoing expansion. “Our goal is to
saturate the Michigan market with our
unique concept,” says Justin Samona.
“Our plan is to open 12 to 15 stores
a year, just as we have the past few
years, and we currently have four under
construction.”
The company also plans to have
continued success in 2014 with its
private label lines. Last year, it introduced
its own line of electronic cigarettes, as
well as its own RYO pipe tobacco
and “both were a major success,”
according to Samona. “We are
expanding our private labels to
another super premium RYO
blend, [plus] filtered tubes,
filtered cigars, premium cigars,
bundle cigars and smoke odor
candles.”
cigarEttEs
still thE Bulk
When Illinois raised its state
cigarette excise tax last year, Smoke
Shop in Dyer, Indiana, benefitted
because of the increased border business
in its Indiana and Michigan stores,
according to Gary Tapley, general
manager of the 29-store chain. “We are
still doing a good business in regular
cigarettes; sales are down as far as
number of cartons fro a few years ago,
but the bulk of our business is still in
cigarettes,” he explains.
The other high for the chain is e-cigs—
“something I was wrong about,” Tapley
says. “I didn’t think we would do much
with it last year, but I have to admit, it’s
getting bigger and bigger. It’s a growing
segment and we’ve beefed it up now. RYO
and pipe tobacco has pretty much leveled
off, but e-cigs are definitely growing.”
48
TOBACCO BUSINESS
Tapley’s biggest challenge is that “it’s
hard to grow without adding new stores,
and I’m not finding new, good locations.
Plus, you need deep pockets to do it, and
we’re a fair trade state in Indiana; I like
that and wouldn’t want to lose that,” he
adds.
“I cannot see
our company ever
completely walking
away from
the tobacco
category as it
has been our
backbone since
day one.”
Looking ahead to
this year, Tapley is realistic in that he’s
not expecting any bottom-line miracles.
“Hopefully, we can just maintain what
we got—being stable would be good for
2014,” he admits. “But as I always say, we
live in paradise here, and a lot of people,
especially in the tobacco industry, just
don’t realize it. I tell them to go live in
Afghanistan and then come back. They
will change their tune.”
a statE lEgislativE coup
Darren Collett, owner of the
26-store chain Collett Enterprises in
Seymour, Indiana, was on a legislative
high as 2013 came to a close. He and
his company reportedly worked with
its state legislators to introduce and
pass a bill requiring any person(s),
including online retailers, who are
selling and/or shipping a tobacco
product into the state of Indiana
to register and obtain a license
from the state. Additionally,
all Indiana tobacco purveyors
are now required to collect
and remit OTP tax to the
state. “While the state of
Indiana is still perfecting the
enforcement of this bill, the
groundwork has been laid and
we believe the benefits will begin
to show in 2014,” Collett reveals.
More good news came in the
form of non-combustibles, such
as moist snuff and e-cigarettes/
e-liquids, which were “by far,
the driving factors attributing
to our sales growth in 2013,”
says Collett. “Many of our back
bars have been remerchandised to
highlight our e-cigarette/e-liquid and
moist snuff categories.” Additionally,
the chain has expanded the number of
SKUs offered in these categories.
“In addition, the privatization of the
Hoosier Lottery helped increase lottery
sales through a variety of promotions,”
Collett reports.
The biggest 2013 challenge Collett
named was the narrowing of the price
top-to-top
comparison
Compared to 2013’s list, here’s how the tobacco outlet industry’s
Top 50 chains add up for 2014:
• In 2014’s list, there are 2,223 total stores versus 2,182 total stores in
2013’s list, a slight increase of nearly two percent (which is in keeping
with last year’s increase).
• No chain is new to this year’s list; all Top 50 chains from last year
are in this year’s list, although some places have shifted in rank.
• 13 chains (26 percent) have increased their store count by at least
one store since the 2013 survey; six (12 percent) have increased by
more than one store.
• Three chains (6 percent) saw store number declines, but all of them
reduced their count by only one store.
• 34 chains (68 percent) have stayed the same in store count.
• A whopping 94 percent of TB’s Top 50 chains have either kept a
consistent store count or increased it.
50
TOBACCO BUSINESS
gap between full price and sub-generic
cigarettes, “along with the majority of
our competitors moving to Indiana fair
trade retails.”
From a profitability standpoint,
Collett expects 2014 to be better than
2013 at his chain, but “perhaps not” in
sales dollars, he states. “We currently
sell the equivalent of over 700 cartons
a week in e-cigarette/e-liquid product,
and the number continues to grow every
week. Many of these sales have come at
the expense of traditional combustible
cigarettes. While the margin is
significantly higher, the sales dollars and
penny profit are not. I believe sales will
be slightly up, primarily due to new store
openings. The higher profit margins
offered by the ‘E’ category, along with the
reduction in our controllable expenses,
should result in a more profitable year.”
But Collett also has a secret wish
that would result in an even better
future: “for the FDA to officially rule
[that] e-cigarettes/e-liquids are a safer
alternative to traditional combustible
cigarettes.” Then, the “current footprint
and merchandising flexibility within
our locations should allow us to really
take advantage of the boom that would
follow such an announcement,” he
explains.
hail: E-cigs
The best thing that happened to
Kocolene Marketing (Smokers Host) in
Seymour, Indiana, in 2013 was a familiar
high to many tobacco stores these days:
electronic cigarette growth, according to
Andrea Myers, president of the 18-store
chain. “The category just exploded, and
I feel like we did a good job keeping up
with it,” she says. Moist snuff growth also
drove the tobacco category for the chain
last year, she adds.
From the challenge department, “the
constant squeeze of margins in the entire
tobacco category continues to impact us,”
Myers reveals. “While electronic cigarettes
were a big growth category for us in sales,
the margins decreased this year.”
In 2014, Myers expects e-cigs to
continue to have a very strong year in her
chain: “Even if they are taxed, they still
offer something a traditional cigarette
does not,” she says.
hot and Bright
Like other tobacco players, the best
52
TOBACCO BUSINESS
thing that happened to the 18-store
chain of Cox’s Smokers Outlet in
Louisville, Kentucky last year “was the
sudden extreme growth in the e-cig/
vapor products category,” as Bill Grantz,
owner and operator, tells it. “This
includes the latest craze in the e-cig
category, the tank vapor devices, as well
as all of the related items, including
the e-liquids, atomizers, replacement
batteries, etc. I have not seen a category
as hot as this since the inception of the
RYO/pipe tobacco category several
years ago due to the taxation on standard
RYO tobacco.”
Grantz says that the best part of the
vapor category is the profit margins
being well over 50 percent, with
numerous as high as 80 percent, some of
which the chain has never experienced
before, according to him.
He expects the e-vapor category to
continue to grow “as we start into 2014,
as the category seems to be evolving
almost weekly with new and better
products becoming available. The profit
margins may not hold up as the category
becomes more competitive with more
retailers jumping on board.” He does
not expect the margins to drop below
the 50 percent level “any time soon.”
The chain has also grown its business
with categories it believes will hold into
the future: liquor, wine and premium
cigars. “With the increase in volume in
these categories, we have been able to
buy these lines at a lower cost, which
keeps us competitive,” Grantz explains.
His outlook for 2014 is bright. “With
the change in focus on developing other
categories, we have made great strides,”
he says. “I cannot see our company
ever completely walking away from
the tobacco category as it has been our
backbone since day one. We have seen
steady growth in premium cigars and
smokeless over the last two years. We
have concentrated on upgrading our
premium cigar category by expanding
cabinet and/or walk-in humidor space
and better merchandising upgrades.” The
chain has also hired a premium cigar
category manager.
“I do expect 2014 to be better than
2013,” Grantz concludes. “Our current
customers and potential customers have
reinforced our reason for optimism — the
results we have seen from the changes we
made in 2013 have been very positive.”
offsEtting cigarEttE
dEclinEs
The best 2013 news that came across
the desk of Randy Silverman, president
of 15-store chain Klafters in New Castle,
Pennsylvania, was the fact that it was a
year of minimal tax increases on tobacco
products and a year of minimal changes
to retailers on the regulatory front.
“This allowed for growth and
innovation in alternative nicotine
delivery products,” Silverman tells TB.
“We could be seeing the dawn of a new
54
TOBACCO BUSINESS
era where tobacco-related products with
significantly less harmful effects could
help offset the continued decline in the
number of cigarette smokers. Depending
upon the FDA, this young segment could
continue to develop and thrive in 2014.”
Specifically, the electronic cigarette
category has helped to offset the
cigarette sales losses for Klafters, but
not entirely: “Electronic cigarettes’
share of total store sales have doubled
this year,” Silverman reveals. “Other
categories such as machine-made and
premium cigars, smokeless, and rollyour-own have also been critical in
helping to offset the decline in cigarette
sales.” Klafters also opened a new store
in 2013 with a “much larger premium
cigar focus.”
One of the biggest challenges that
Klafters faced in 2013 was related to PCI
(Payment Card Industry) compliance,
according to Silverman. “PCI compliance
is an initiative led by the major credit
card companies and affects anyone who
processes credit card payments,” he
explains. “We had one of our merchant
accounts deactivated, and it took us a few
weeks to get a new merchant account.
This was a difficult experience, but we
learned a great deal about payment card
compliance from the experience and
have improved our processes as a result.”
Silverman is hoping 2014 will be as
good as 2013, “if not better,” he says.
He expects the e-cig category, including
e-cigs, vaporizers, juices and other new
items to take about a 5 percent share
of sales in the chain. “With the major
cigarette manufacturers entering the
electronic cigarette category, I would
anticipate an eventual decline in
margins in the category, along with more
stipulations tied to programs from the
major cigarette manufacturers. That may
not happen right away, but it probably
ultimately will.”
And so, Klafters will continue to look
for new locations and opportunities. “I
expect to see more electronic cigarette
boutique/lounges opening up in our
region, and we may look into doing
something like that ourselves,” Silverman
says. TB
.
The 2014 TB Top 50 List
The Top 50 tobacco outlet chains of the year, by store count (as of 12/31/13):
Smoker Friendly International,
Boulder, Colo.;
816 total authorized dealer locations,
86 of them company-owned under The
Cigarette Store Corp.
Tobacco Plus Discount Outlet,
Crowley, La.; 22 stores
William & Taylor Tobacco, Mullins, S.C.;
17 stores
A&K Wholesale (Discount Tobacco
Outlets), Murfreesboro, Tenn.; 22 stores
Tobacco Shoppe/Save-A-Lot, Bowling
Green, Ky.; 16 stores
Admiral Discount Tobacco,
Coopersville, Mich.; 173 stores
TRO of North Carolina (Tobacco Road
Outlets), Lakeview, N.C.; 22 stores
*JC’s Cigarette Outlet, Elizabethtown, Ky.;
16 stores
*Tobacco Central dba Low Bob’s,
South Bend, Ind.; 129 stores
*Smokes 4 Less, Poughkeepsie, N.Y.;
21 stores
Ross-Lab Marketing (Nothin’ Butt
Smokes), Lubbock, Texas; 15 stores
Tobacco Superstores, Forrest City, Ark.;
86 stores
*Delta Distributors/Discount Tobacco
Outlet, Andalusia, Ala.; 21 stores
Puff Super Value, Mill Hall, Pa.; 15 stores
Smokers Choice, Rock Hill, N.Y.; 51 stores
TBM Management, Pearl River, La.;
20 stores
Discount Smoke Shops, St. Louis, Mo.;
50 stores
Smokers Outlet/ Wild Bill’s Tobacco,
Birmingham, Mich.; 50 stores
*Brookshire Brothers (Tobacco Barn),
Lufkin, Texas; 48 stores
*Tobacco Connection/Big Smoke,
Nampa, Idaho; 46 stores
Cheap Tobacco, Cincinnati, Ohio; 40 stores
Smoke ‘N’ Go (Cheap-O-Depot),
Abbeville, La.; 20 stores
Gateway Marketing/Tobacco Station USA,
Texarkana, Ark.; 20 stores
Fast Lane Discount Tobacco, Lovely, Ky.;
19 stores
*Smokin’ Joe’s Tobacco & Liquor,
Davenport, Iowa; 19 stores
*NBS Inc., Parkersburg, W.Va.; 39 stores
Puff Discount Cigarettes, Mill Hall, Pa.;
19 stores
Kwik Trip (Tobacco Outlet Plus),
LaCross, Wis.; 39 stores
Cox’s Smokers Outlet, Louisville, Ky.;
18 stores
Smokin’ Joes, Waymart, Pa.; 30 stores
*Kocolene Mktg. (Smokers Host),
Seymour, Ind.; 18 stores
Smoke Shop, Dyer, Ind.; 29 stores
*CLTS/Dot Discount/Cigarette City,
Newark, Del.; 27 stores
*Collett Enterprises, Seymour, Ind.;
26 stores
56 56
TOBACCO
BUSINESS
TOBACCO
BUSINESS
JANUARY/FEBRUARY
20142014
JANUARY/FEBRUARY
Tobacco Road, Jermyn, Pa.; 18 stores
*Cigaret Shopper, Brewer, Maine;
18 stores
Louisiana Discount Tobacco (Discount
Tobacco Outlet), Shreveport, La.; 17 stores
*Klafters, New Castle, Pa; 15 stores
Tobacco Depot, Tampa, Fla.; 14 stores
Puff-n-Snuff, Lock Haven, Pa.; 13 stores
Bo’s Smoke Shop, Elizabethtown, Ky.;
13 stores
Dirt Cheap Cigarettes & Beer, Fenton,
Mo.; 13 stores
Tobacco Discount, Picayune, Miss.;
12 stores
*MGN Tobacco, Raleigh, N.C.; 12 stores
*Redi-Mart Tobacco, Elizabethton, Tenn.;
11 stores
*Truax 2, Salem, Ore.; 11 stores
Saver Group, Campbellsville, Ky.; 10 stores
Town Crier, Mandeville, La.; 10 stores
*Hi Times Liquor Mart/Smoker’s Outlets,
McCook, Neb.; 9 stores
*Blue Ridge Tobacco,
Winston-Salem, N.C.; 8 stores
*Smoker Friendly authorized dealer
Rouseco Honors
U.S. Military
A team of servicemen enjoyed an annual fishing
expedition on a boat sponsored by Rouseco.
F
or eight years running, servicemen have
gathered in Morehead City, North Carolina
for Military Appreciation Day, a full-day
community event packed with family activities.
“It’s a day where we celebrate the military and say
‘Thank you!’ to the men and women who serve
our country,” says Jeff Martin, general manager
of Rouseco, which sponsors the event’s Early Out
Fishing Team.
The event centers around a “Take The Troops
Fishing” boating event that this year drew 600 active
duty servicemen, who left the docks of Morehead
City on 117 boats for a day of fishing. Meanwhile
on land, their family members were treated to a full
day of activities, including sightseeing boat rides, a
kids’ fishing derby, carnival games and other fun.
When the boats returned, fish cleaners were
standing at the ready to clean, bag and pack the
day’s catch. Participants and their families were
then treated to a dinner of pork steaks from
Murphy Brown, chicken quarters provided by
House of Raeford, hot dogs, sweet potatoes, hush
puppies and more.
“We had a great time and thoroughly enjoyed the
picnic afterwards too,” reported Richard Hubbard,
one of the participating servicemen. “Please
know that the efforts of the captains, crews and
volunteers on behalf of military members are truly
appreciated. Thanks again and see you next year!”
Military participants also appreciated the
activities for their children and spouses. “My
family and I had the absolute best time,” said
Joshua Dubois. “My family got to take part in the
boat rides and loved every minute of it. After 17
years in the Marines, this was by far the best event
for the troops I have ever participated in.”
For more information on military appreciation
events and to learn how you can volunteer, please
visit www.militaryappreciationday.org/phpBB3/
home.php. TB
(From Left) Team Rouseco’s Jeff Martin with three U.S. Marines—
Steve Musan, Jody Mizell and Matthew Bass—and his colleagues
Stevie Sasnett and Steve Jones.
58
TOBACCO BUSINESS
Highlights From October’s
NACS Show
King Maker’s Vikram Chachra, Bhavani
Parameswar and Kevin Morrow
M
ore than 22,000 retailers,
wholesalers and distributors
attended the 2013 National
Association of Convenience Stores’ annual
show, which took place October 12-15 at the
Georgia World Congress Center in Atlanta.
In addition to a 396,000-net-squarefoot expo floor where 1,160 companies
exhibited, the show featured three days of
general sessions, 58 educational sessions and
three evening networking events. The pages
to follow showcase the photos taken at the
event. TB
Mistic’s Justin and
John Wiesehan
ental
Inter-Contin
argio Patel
Sh
s
g’
in
Trad
Republic Tobacco’s
Michael Clark
60
TOBACCO BUSINESS
y Brown’s
panelists Eb s Judy Hong
E-cigarette
s’
ch
Sa
an
and Goldm
Andy Barr
Mistic:
Market Maven
A
A top seller
at Walmart, this
e-cigarette brand
couples a savvy
market strategy with
value pricing for a
winning combination.
By Jennifer Gelfand
62
TOBACCO BUSINESS
mid the chaos of players
crowding into the e-cigarette
category, Ballantyne Brand’s
Mistic e-cigarette is emerging as one
of the more serious contenders. In
November, Mistic scored the No. 1
spot in its category at Walmart, the
world’s largest retailer, according to data
from Nielsen’s Brand Rank Report.
While such rankings continually shift,
particularly in the musical chairs game
of e-cigarette brand market share,
Mistic consistently ranks among the
top three in many large chains.
So what makes Mistic stand out?
As one might expect from a lead seller
at Walmart, value pricing is a big part
of the product’s appeal. Our last issue
inadvertently misquoted Ballantyne
Brands CEO John Wiesehan, Jr.
on an impossibly low price for the
company’s disposable e-cigarette that
we won’t repeat here (TB apologizes
for the error), but the actual price
is nearly as impressive: $4.99. That
sticker price is a full $3 less than that
of several competing brands. Mistic’s
rechargeable products are an equally
economical option, starting at $14.99,
with refill cartridges priced at $14.95
for five or $19.99 for 10.
Mistic has also won kudos for
eschewing typical tobacco marketing
tactics in favor of a more consumerproducts approach. “We like to think
we are the retailers’ e-cigarette,”
explains Wiesehan, who says his
company offers margins of 40 to 50
percent on its products and prides itself
on Mistic’s taste and value equation.
“We have a great taste profile, promote
to consumers at very attractive price
points, and give very healthy margins
to retailers.”
The company is also an aggressive
marketer. Mistic print ads have
appeared regularly in popular
consumer magazines since its launch,
and the company also actively engages
with its customers through social
media. More recently, it branched
out into television advertising with
a 30-second ad that uses whiteboard
animation video to demonstrate the
cost savings that smokers of traditional
cigarettes can experience by switching
to Mistic e-cigarettes. “As any smoker
of traditional cigarettes knows, [the]
cost of the product has skyrocketed,”
says Wiesehan, who says that the ads
will be featured on stations such as
AMC, ESPN and CNBC. “There are
numerous reasons tobacco cigarette
smokers are switching to electronic
cigarettes like Mistic, and saving
money is high on the list.” The ad can
also be seen on Mistic’s website.
Finally, Mistic recently announced
that it will serve as a co-primary
sponsor in the 2014 and 2015
IndyCar Series seasons of the No. 11
car piloted by Sebastien Bourdais. “As
race fans ourselves, we are looking
forward to the 2014-2015 season,
not only to cheer for the team’s new
driver, Sebastien Bourdais, but to
further leverage our relationship with
KVSH Racing as we roll out offers
and promotions that educate IndyCar
fans on alternatives such as our
electronic cigarettes,” says Wiesehan.
[From left] Mistic’s Justin Wiesehan and John Wiesehan, Jr.
64
TOBACCO BUSINESS
FDA RegulAtion-ReADy
Along with its peers in the
industry, Ballantyne is well aware
“We think [e-cigarettes] will be regulated
a lot like tobacco. Flavors will be a problem,
selling to minors will be a problem, [and] Internet
sales will go away. And then we think they will want
to see good manufacturing practices.”
that potentially game-changing FDA
regulation of this relatively nascent
category is imminent. Unlike many
in the industry, the company chose
to take a proactive approach toward
accommodating what it sees as
inevitable: an FDA ban on flavored
e-cigarettes.
“Beyond menthol and tobacco, we
don’t do any flavoring,” says Wiesehan.
“We think it’s an issue with the FDA
and we want to be very prudent in what
we do and also be good citizens. We are
not trying to promote to anyone who is
not already a smoker, which is what we
believe the FDA will look at when they
look at flavors. They will say, ‘Look, you’re
attracting children or you’re attracting
someone who does not currently smoke.’
Our demographic is 100 percent
someone smoking cigarettes today. We
want those smokers to try an e-cigarette.”
The company is also committed to the
“We Card” tobacco sale age verification
retail program, requiring consumers to
show proof that they are of age before
purchasing its products.
To ensure consistent taste and quality
of the vapor being inhaled, Ballantyne
chose to manufacture the liquid used in
its products in the U.S., another decision
it hopes will play well with regulators.
“We ship that to China for assembly
and then ship the finished products
back,” explains Wiesehan. “But we’re
66
TOBACCO BUSINESS
looking into moving the entire process to
North Carolina, which will give us better
control of the supply chain and which we
also believe the FDA will prefer.
“We think [e-cigarettes] will be
regulated a lot like tobacco. Flavors will
be a problem, selling to minors will be
a problem, [and] Internet sales will go
away. And then we think they will want
to see good manufacturing practices.
We will have to show them our testing
and prove that our liquid is as consistent
as we say—which is something a lot of
companies can’t do,” relays Wiesehan.
Such speculation has been a point
of differentiation across the e-cigarette
playing field with some manufacturers
moving forward with flavored products
and overseas manufacturing practices,
essentially banking on having time to
reconfigure their business approaches
as necessary if and when the FDA
introduces
e-cigarette
regulations.
Although regulations were expected
in October of 2013, at press time the
agency had yet to make any major
announcement regarding the category.
In the meantime, the e-cigarette
market continues to grow as more and
more retailers pick up the category.
Mistic’s electronic cigarettes and
vapor products are currently sold in
approximately 40,000 retail outlets
across the country, as well as through
its website. Beyond Walmart, chains
like Rite Aid, Kangaroo Express, Circle
K, Winn Dixie/Bi-Lo, Food Lion, and
many others stock these products.
PoS PointeRS
For those retailers just introducing
the category, Wiesehan recommends
taking an aggressive stance. “You need a
counter display that puts them right in
front of your customers,” he says. “Once
it’s established you can move it back,
but education at the point of purchase is
key for a retailer who is just getting into
e-cigarettes.”
It’s also critical that first-time “vapers”
have a good experience with the
product—which is why some of the metoo, fly-by-night brands can backfire
for retailers, he adds. “It is all about the
taste. If someone tries an e-cigarette for
the first time and gets a bad one, they
usually don’t go back and try another
brand.”
Ultimately, the most important thing
retailers can do is to simply be in the
category. “E-cigarette sales are growing
every day,” says Wiesehan. “E-cigarette
sales will top $2 million this year,
including Internet retail. This category
isn’t going away.” TB
D&R’s Debuts
Fidel’s Cigar Shop in Missouri and Cigars & Tabac Ltd.
in Kansas hosted launch parties for D&R’s large-filtered and
1881 Perique cigars, respectively.
Enjoying PEriquE
in Missouri
D
aughters & Ryan, Inc. debuted their new
Picayune, Rimboché Red and Rimboché
Blue Large-Filtered Perique Cigars
at an event held at Fidel’s cigar shop in Kansas
City, Missouri. Attendees, including Mary and
Mike McNeal of McClelland Tobacco Company,
enjoyed an afternoon of good conversation and
tasting the new large-filtered Perique cigars.
The company also recently debuted its new 1881
Perique cigar at an event held at Cigars and Tabac
Ltd., in Overland Park, Kansas. Many attending
the October event were members of the Kansas
City Pipe Club. Everyone enjoyed an afternoon
of smoking 1881 Perique cigars, sipping various
port wines, and snacking on coconut shrimp,
steak tips with Portobello mushrooms, and risotto.
The 1881 Perique cigar is totally handmade
in the Philippines by Tabacalera Incorporada,
and Daughters & Ryan, Inc. is the exclusive US
importer. TB
A fEstivE
AftErnoon
in KAnsAs
68
TOBACCO BUSINESS
C-STORE CORNER
All in the Family
Two family business veterans offer five tips for growing your
family-owned retail business.
By Jennifer Gelfand
F
or many retailers, business is a
family affair. At inception or over
time, spouses, parents, siblings and
children often join the company, either by
pitching in on the workload or by investing
in startup or expansion capital. Ideally, the
result is closer family ties, a tightly knit
company culture, and a business you can
pass down through generations—in short,
both the business and the family benefit.
Unfortunately, that’s not always how it
plays out.
“The highs are higher and the lows are
lower in a family business—you suffer
more when things are bad, but when
they are good, you get a greater benefit,”
explains Jeff Miller, president of Miller Oil
Co., which operates Miller’s Neighborhood
Markets.
In fact, only one in three family
businesses survives to the next generation.
There are ways to boost the odds of your
company being one of them. Here are five:
CommuniCate, CommuniCate,
CommuniCate
All too often in business, particularly so
when families are involved, assumptions are
made about what people know and how they
feel about issues, strategies and goals. This can
lead to misunderstandings that will undermine
the company and your family relationships.
The solution: set regular times to meet with all
the family members involved in the business
to review daily operations, discuss overarching
goals and resolve any disputes that arise.
“Communication needs to be a priority,”
says Katie Wagner, vice president of Arrow
Mart, vice president of MWS Enterprises,
which owns 54 convenience stores throughout
Western and Central New York, many operating
under the Yellow Goose Markets and Arrow
Mart brand names. “When we do it, it builds
us up; when we don’t, it takes us down.” MWS
keeps up a running dialogue by holding weekly
strategic planning meetings where the three
family member principles discuss initiatives
and assess progress.
Arrow Mart’s Katie Wagner
Define Roles
One of the nice things about a family
business is being able to count on the hard
work and energy that family members are
willing to put into the business. At the same
time, it’s important not to take advantage of
that relationship and ask too much of family
Miller Oil’s Jeff Miller
70
TOBACCO BUSINESS
C-STORE CORNER
Wagner with her family
member colleagues
member employees—or to let them take advantage of you.
Having defined responsibilities for family member
employees, managers and owners is one way to guard against
the work-family relationship becoming unbalanced, says Mike
Newman, executive vice president of NOCO, which operates
34 NOCO Express convenience stores. It’s equally key to have
processes for determining pay, promotions, work schedules
and performance reviews. In addition to ensuring that your
family members are treated fairly, this will also help guard
against subconscious favoritism, which can be off-putting to
non-family member employees.
Get outsiDe Help
“Don’t be afraid to ask for help,” urges Wagner, whose sister
and parents are involved in the family business. “Whether
you need a succession plan, [need to] cope with two family
members who don’t get along, or [to] fix board meetings where
no progress is being made, an outside consultant or mediator
can go a long way toward resolving issues before they escalate.”
At NOCO, a board of directors that originally consisted solely
of five family members has evolved to include two outsiders
and the company’s non-family member CFO. “The outsiders—
an attorney and a former banker—were [recruited] for the skill
sets they bring to the table, but it’s also helpful to get opinions
from outside the family,” says Newman.
pRoteCt “outsiDeR” family membeRs
When multiple relatives are involved in a company, it’s all too
easy for social event talk to drift toward business. As tempting
as it might be to bring up that problem employee to Uncle
John at the backyard barbecue, it’s critical to resist the urge.
“It’s important to remember when you are a family and when
72
TOBACCO BUSINESS
you are a business,” notes Newman, who co-owns and runs
the company with his brother. “We try to not bring business to
family functions.”
That separation helps guard against feelings of exclusion and
resentment that can arise from family members who are not
involved in the business. “It’s important to remember who is in
and who is out and to have respect for those who are not in the
business,” says Newman.
“It will be better for your marriage if you don’t make your
spouse the dumping ground for family business drama,” agrees
Wagner. “And your child may not understand what you’re saying
about [your relative] but that doesn’t mean she won’t repeat it
at Thanksgiving.”
staRt suCCession planninG eaRly
Succession is where many family businesses implode.
“The generational transition was most challenging,” recounts
Newman, who teamed up with his brother to buy the company
that his grandfather founded and passed on to his father and
uncle. “My uncle struggled with it. He didn’t have kids who
wanted to join the business, and he had trouble with having
been in it for 40 years and then no longer [being] in [control].”
For many companies, bringing in outside help smooths
the leadership transition process, whether it be a professional
facilitator who helps the family hold effective meetings around
succession planning or a consultant who helps to assess
potential next generation leaders and guide the company
through the transition period.
“[Leadership] transition is very difficult and filled with
emotion,” sums up Newman. “In hindsight, I wish we had had a
stronger board there guiding us through it; it would have been
smoother for the family.” TB
CeleBraTing
Music and Stogies
The Cigar Family Charitable Foundation’s
4th Annual Sax & Cigars event was a huge hit.
H
eld at the Westin Tampa
Bay in November of 2013,
the 4 th Annual Sax & Cigars was
a festive evening that also raised
funds for schools, as well as
health and sports facilities in the
76
TOBACCO BUSINESS
impoverished farming regions of
the Dominican Republic. The event
was organized by the Cigar Family
Charitable Foundation (www.cf-cf.
org), a joint endeavor by the Fuente
and Newman cigar families, who
also underwrote the event so that
all funds raised could go toward the
Dominican Republic children and
families it benefits. The photos to
follow show some of the festivities
attendees enjoyed. TB
trench marketing
BY MICHAEL GELFAND
Facing the Music
Fidel’s cigar Shop dug itself
out of an early hole created by a
contentious store name—now
it’s a thriving boutique cigar
hotspot on the kansas city scene.
78
TOBACCO BUSINESS
B
efore tobacco became his bread and butter, Tom
Foster was training at the California Culinary
Academy to become a professional chef. Back then,
he looked forward to the day when he’d have a restaurant of
his own where he could play tastemaker for his customers
and prepare a sensory experience that would exceed their
expectations every time they came in. But dreams and
reality often mix like oil and water, and Foster soon realized
that being a cook meant he would never see the front of the
house—let alone get the opportunity to watch them eat the
food he prepared.
Disillusioned, Foster soured on his dream of professional
cooking and left California to return home to Kansas City,
trench marketing
“Sales people have to have enough pride to treat every customer
the way they want to be treated without being high pressure. Find out
what the [customer] came in for [and] let them know they’re there to
answer questions without talking down to them because it’s too easy
for customers to sit at home and shop online.”
where he began to realize that the most important aspect of his
culinary dream wasn’t about the food, it was about being in a
service-oriented industry. “I wanted to be the one interacting
with customers to see their experience,” Foster recalls. “You
want to see them enjoy it.”
Upon returning to Kansas City, Foster was recruited by some
friends who were already in the tobacco retail business to help
expand—and become a part owner in—their current store, as
well as open a new one. “I was 28 years old at the time and a
bit reluctant, but I said yes,” he says. “I learned that it was a very
social environment, and that got me thinking.” The new store
was located between two bars, and Foster saw that there was a
lot more foot traffic at night, so he convinced his partners to hire
“cigar girls” with old-style cases and trays to walk around the
two bars and sell product, which ultimately quadrupled sales.
“That got everyone’s attention,” he says.
After three years as a partner, Foster knew that the business
could be lucrative, and also that it was something he enjoyed,
so he bought out his partners and changed the name of the
store to Fidel’s Cigar Shop. “At that time, his name [Fidel Castro]
went hand-in-hand with cigars in my mind,” says Foster. “It
was a lighthearted idea that generated a lot of flack for me with
manufacturers, so I spent a lot of time speaking with them to iron
out problems and calm them down. Guys like George Padron
and Jose Aliva[…]they were a little disgruntled, so I explained to
them that it was just a name, and that I didn’t agree with anything
Castro stood for other than his passion for cigars.”
It took a lot of time and finesse to mend those broken fences,
but today Fidel’s is a thriving business adored by customers
around the country and boutique cigar manufacturers worldwide.
Located in the Westport section just 15 minutes south of
downtown Kansas City, Fidel’s straddles the city line. “It’s on the
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TOBACCO BUSINESS
trench marketing
edge of the suburbs in a great location with bars, restaurants and
shopping,” says Foster. The store, which is approximately 1,500
square feet, is located in a historic brick and mortar building that
was built in 1898, and its Old World feel provides an appropriate
backdrop to what’s going on inside.
Banking on Boutique
Foster’s product leans heavily toward boutique brands,
with more than 700 different facings in the store. “There’s a lot
crammed into a relatively small shop,” he says, “everything from
Ashton, Arturo Fuente, Tatuaje, Don Pepin Garcia, Prometheus,
God of Fire, Kristoff, Alec Bradley and so much more.” Foster
opted for reach-in mahogany file cabinets that are eight feet
tall to showcase his specialty products because he believes
that they’re easier to light behind glass. “Cigars are beautiful,
especially with their bands, and you want them where customers
can see them,” he says.
In addition to cigars, Fidel’s carries a broad selection of
tobacco products, including pipes, pipe tobacco, flavored cigars,
e-cigarettes, hookahs and roll-your-own, as well as humidors,
lighters, cutters and other accessories. “Being diversified is
important,” he says. “We’re traditional, but we’ve embraced
modern products, and pipes and pipe tobacco represent 25
percent of our business. That grows every year because these
30-somethings saw their grandfather do it, they remember the
smells, and it sparks memories. It’s nostalgic, trendy, a sign of
stature, and demonstrates character. These younger customers
are more willing to try whatever you suggest to them, which is
why it’s important for your staff to be incredibly knowledgeable.”
Aside from having a diversified product selection, customers
are drawn to Fidel’s because of its lounge. “We did the transition
into a Graycliff cigar lounge back at a time when tobacco stores
didn’t have lounges,” he says. “I caught a lot of flack for it
because you couldn’t serve alcohol there, but I really wanted a
place for customers to smoke, so I turned half of the store into an
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TOBACCO BUSINESS
800-square-foot cigar lounge.”
Graycliff helped decorate the store by flying in a designer who
picked out chairs and helped pull together what Foster describes
as a traditional Cuban living room. “It has 18-foot high ceilings,
six chandeliers, oriental rugs, and a very warm feel of someone’s
own home,” he says. “We put in some high-end smoke eaters
because as much as we enjoy the smoke, we want to be able to
see. It’s a place to engage customers, a place where you can sell
and experience products, and it’s still comfortable for everyone
during events.”
Welcome to the cluB
As if the lounge wasn’t attractive enough, Foster installed 24
private humidified lockers that customers can rent on an annual
basis to store their cigars, bring in their own alcohol, and gain
access to special discounts on purchases up front, as well as first
dibs on rare precuts that come in. “They feel that they’re a part
of a club,” says Foster. “They’re a part of the store. I wish I had
more, but I don’t have more room; I’ve used every square inch in
the store, and there’s a waiting list to get the ones we have. But
what we have definitely works. Customers want to store their
cigars there, and it creates loyalty and camaraderie.”
Foster holds monthly events in the lounge because its three
flat-screen TVs and wireless Internet make it a great place for
customers to hang out even when events aren’t going on. “We
get them to come in, smoke and learn about it,” he explains.
“We’ve got something going on in there once a month from
5 p.m. to 10 p.m., and we’re open seven days a week up until
midnight on Friday and Saturday. Since we’re in a bar district
and no one else is open that late, this is the only store to go to.”
To keep customers engaged and coming back, Foster
communicates actively with clients via email and social media.
“We try to capture customers’ email addresses and enroll them
when they make their first purchase, let them know about sales
and specials via monthly newsletters, and send them e-vites
trench marketing
[electronic invitations] to events,” he says. He also maintains
an informative website (www.fidelscigarshop.com) as well as
an active presence on Facebook and Twitter. “We also use [an
online marketing company called] Constant Contact to manage
our email database and track open rates and customer rewards
programs, and we just started putting barcodes on every product
that doesn’t already come with a manufacturer’s bar code, which
allows us to track product and expedite sales using iPads and
card swipes at the point of sale.”
Another active strategy Foster’s team employs is asking
customers in the store if they need anything brought to them.
“A customer can buy product from the lounge without leaving
84
TOBACCO BUSINESS
his or her seat, and it all boils down to that type of customer
service,” he says. “I track my inventory; I know what’s selling
and what’s not. I go to trade shows and develop relationships
with manufacturers, but I think the most important thing we
do is remember first names and engage everyone who walks
in with a smile and a ‘hello, how can I help you?’” Foster adds,
“Salespeople have to have enough pride to treat every customer
the way they want to be treated without being high pressure.
Find out what the [customer] came in for [and] let them know
they’re there to answer questions without talking down to them
because it’s too easy for customers to sit at home and shop
online.” TB
PRODUCT PROFILE
MARCH/APRIL 2014
Arango Adds Private Label
“We are pleased to include Romeo & Julieta as the most recent addition in our new
‘Clasico’ series of premium cigars,” says Michael Gold, Arango Cigar’s president,
in announcing the company’s latest premium cigar offering. “Unlike the original
two Clasicos, which are patterned after General Cigar Company’s top-selling Macanudo and Punch brands, Romeo y Julieta Clasicos are a product of Altadis USA.”
All three Clasico lines are made exclusively for Arango and have natural wrappers. Their make-ups and blends are comparable to the Altadis and General Cigar
brands they are patterned after. Romeo y Julieta Clasicos are medium-bodied with
an Indonesian wrapper, while medium-bodied Punch Clasicos have an Ecuadorean
wrapper, and the mild-to-medium-bodied Macanudo Clasico features a Connecticut shade wrapper.
The Romeo y Julieta Clasico frontmarks, like the original two lines, pay tribute
to notable Chicagoland areas: Mag Mile (5.5x44), Windy City (5x50), Bucktown
(6.125x52, Belicoso) and Gold Coast (6x60). Their suggested prices range from
$6.75 to $8.40.
Clasicos are presented in 15-count boxes, an affordable, space-saving and
novel feature of the line. “Another significant advantage for brick-and-mortar tobacco shops is that Arango does not sell Clasicos to mail-order or Internet retailers,” notes Gold, who adds that the full Clasico lineup is currently available. Arango
Cigar, 800-222-4427
Debuts From Davidoff
Davidoff has released two new assortments. Its “Inspirational Robusto” assortment offers cigar aficionados an assortment of three exceptional cigar blends and
complex aromas. The new assortment features three cigars:
•The award-winning Davidoff Nicaragua Robusto, launched in late 2013;
• The “Millennium Blend,” which showcases Davidoff’s sophistication in blending and complexity of aromas; and,
• The “Puro d’Oro,” the first Davidoff Dominican Puro with its intense and complex blend wrapped in a unique Yamasá wrapper.
The Davidoff “Short Pleasures” assortment offers four ideal cigars for those
short, relaxing moments in a hectic life. It includes a selection of Davidoff’s rich
blends that can be enjoyed in 30 to 45 minutes. Thanks to the different cigar formats and blends, modern cigar lovers can discover and enjoy, depending on
their mood and the time of day, the milder “Entreacto” and “Grand Cru” No. 5,
or the richer and more intense Millennium Blend Short Robusto or Davidoff Puro
d’Oro Gorditos. The cigar strength indicator inside the assortment pack helps you
choose the right cigar for a specific occasion. Davidoff, www.davidoff.com
84
TOBACCO BUSINESS
MARCH/APRIL 2014
PRODUCT PROFILE
MARCH/APRIL 2014
Royal Gold and Drew Estate Team Up
Styling from
Sapphyre Hookah
Royal Gold Cigars has partnered with renowned cigar manufacturer Drew Estate
for its latest premium, hand-rolled cigar release: Nirvana Cameroon Selection.
The new cigar features a luscious, light-brown, Rosado wrapper grown in the
Eastern province of Cameroon, Africa.
The origin of the Cameroon seed varietal is Sumatra Indonesia, which has
been grown in Africa for over 60 years. The balance of the blend consists of fillers from Nicaragua, specifically Jalapa and Estelí, along with a portion from the
Jamastran region of Honduras. The binder is San Andreas tobacco from Mexico.
“The beauty behind the Nirvana blend is the combination of [a] Cameroon
wrapper and Nicaraguan filler leaves,” says Drew Estate co-founder Marvin
Samel. “Cameroon leaf is from Africa and is known for its sweetness and a natural sweet spicy taste. Blending the strength, body, and richness of the Nicaraguan tobacco with the Cameroon allows a nuanced and layered depth to really
come through. This is not an old-fashioned mild Cammy. Quite the contrary.”
The new Nirvana line is offered in five sizes, including a 6x46 Corona Gorda,
5x52 Robusto, 6x52 Toro, 6x54 Torpedo and finally, a 4x44 size called the “Silencio.” The first shipment of Nirvana will be shipped in unique, limited edition,
wooden display boxes featuring beautiful silkscreen graphics. Royal Gold Cigars,
800-524-4406, [email protected], www.royalgoldcigars.com
Sapphyre Hookah is an exciting new
line of flavored electronic hookah
from ECO-CIGS. With a rich metallic
finish, Sapphyre Crystal tip and 600
puffs of zero-nicotine flavor, Sapphyre
Hookah e-cigs appeal to a wide range
of adult customers—and delivers the
quality, margin and value retailers expect from the Sapphyre brand.
Sapphyre Hookah comes in eight
great flavors, including Blueberry
Mint, Mango Tango, Green Apple,
Strawberry Fields, Peach Passion,
Grape Explosion, Watermelon Heaven
and Chocolate Mint. Each Sapphyre
box includes five each of four flavors
at a MSRP of $8.99. ECO-CIGS, 855326-2447 (x106) or tony@eco-cigs.
com
86
TOBACCO BUSINESS
MARCH/APRIL 2014
PRODUCT PROFILE
MARCH/APRIL 2014
Electronic Cigarettes U.S. Automated
Filling, Assembly & Packaging
Freedom Smokeless, a Southern California-based producer of electronic
cigarettes, unveiled new, U.S.-built, high-speed electronic cigarette automation machinery at the recent TPC 2014 show in Las Vegas. Freedom, in the
e-cig industry since 2008, offers complete, turnkey automated solutions designed specifically to bridge the gap between China and America, making ecig and cartridge liquid filling, assembly and packaging an affordable reality.
Freedom’s business is focused on OEM and ODM precision manufacturing of electronic cigarettes. In 2011, Freedom began the design and construction of its high-speed automated filling and assembly production lines
with the assistance of U.S. automation engineers. The first of six customdesigned “made in America” machines has been installed in Freedom’s
Southern California, FDA Registered, ISO- and GMP-compliant facilities. By
May 2014, all six automated lines will be up and running with the capacity
of producing over four million units per week (disposable and cartomizer).
“The response at the recent TPC show was overwhelming,” says Glenn
Kassel, Freedom’s president and co-founder. “When watching the video of
our automated production, people were amazed that we had developed
such sophisticated technology, especially our built-in quality assurance features.” Freedom’s automation includes precision filling, gluing, capping, a
patent-pending fusion feature (for soft-tip disposables and for a first-of-itskind soft-tip cartomizer), QC inspection with pressure testing, LED validation, a visual puff test, labeling, and silicon over-capping.
“Our quality assurance protocols include audits at every level of manufacturing from raw materials, sub-assemblies, WIP and finished goods in addition to regularly scheduled, consistent on-site factory inspections,” says
Michael Lewis, Freedom’s CEO and co-founder. “We use the very finest U.S.made e-liquids, which are all batch tested by accredited third-party labs. Our
packaging and printing is handled locally at ISO-certified facilities. It’s taken
us several years to create this world-class production system; our customers will attest that our consistent high quality and extremely
efficient manufacturing and finished goods production allows
them to focus on sales instead
of facing all the challenges that
can arise when working with
foreign vendors.” Freedom,
www.FreedomSmokeless.com
88
TOBACCO BUSINESS
MARCH/APRIL 2014
Miami Cigar Debuts Anniversary Humidor
Twenty-five years ago, Nestor and Mariana Miranda began distributing cigars out of the trunk
of a car, visiting accounts that Nestor Miranda
had built relationships with through his many
years in the liquor business. That endeavor
eventually evolved into what is today one of
the nation’s largest premium cigar distributors.
To commemorate this accomplishment, Miami Cigar & Company has decided to release
a limited edition 25th Anniversary Humidor
containing cigars from the two factories that
helped them reach this milestone. “We are
very excited to be working with La Aurora and
My Father Cigars on this project,” says Jason
Wood, Miami Cigar’s vice president. “Twentyfive years would not have been possible without the help of the Leon and Garcia families
and we thank them for that.”
This piano-finished humidor has the capacity for 75 cigars. It will contain 20 Toro-sized
cigars, each packaged in their own individual
coffin. The individual cigar will have a secondary band denoting its country of origin. Total
production on this limited release will be 500
humidors set to hit the U.S. market in midMarch.
“I feel privileged to be a part of this historic
milestone,” says Wood. “What the Mirandas
were able to accomplish is something that I
can only hope to duplicate in the 25 years to
come. They have provided us with the blueprint; now with the help of everyone at Miami
Cigar, we look forward to an amazing run continuing their legacy.” Miami Cigar & Company,
www.MiamiCigarCompany.com
PRODUCT PROFILE
MARCH/APRIL 2014
Super
Limited
by Nat
Sherman
This New Haus
Mistic introduced its new Haus Personal Vaporizer at the Tobacco Plus
Convenience Expo in Las Vegas in January. The device will be sold nationwide in mass-merchandise, convenience, dollar store and grocery retail channels, including Walmart, Circle K, The Pantry, H-E-B, Winn-Dixie
and Bi-Lo, and other national and regional distributors.
“Mistic is setting the standard for quality, value and taste within the
electronic cigarette and vaping industry,” said John Wiesehan, Jr., CEO of
Mistic. “Our retail partners chose Mistic to develop Haus because of our
reputation for quality and increasing demand among adult smokers who
want to create their own vaping experiences as they transition away from
traditional cigarettes.”
Offered in blue or black with stainless steel fittings and a light activated on/off control, Haus features a streamlined, lightweight design and a
high-powered lithium ion battery at a suggested retail price of $24.99.
The Haus Personal Vaporizer is a complete starter system, equipped with
a specially designed unit and tank with a soft handle for added comfort, a
lithium ion battery, a USB charger, and a lanyard for easy carrying access.
“We listened to what our retailers wanted and developed an individual personal vaping unit to be rolled out nationally across multiple store
channels,” says Wiesehan. “Haus also provides the added convenience
for consumers of being available nationally from a trusted brand of vapor
products and accessories.”
Allowing vapers the flexibility to choose from a variety of taste profiles,
five distinct blends will be available to use with the Haus Personal Vaporizer: American Blend, Cool Ice, Washington Red, Java and Ocean Mist.
Retailing at $7.99, Mistic’s e-liquid, like all of its other electronic cigarette
products, is made and bottled in the United States. Mistic, www.misticecigs.com
90
TOBACCO BUSINESS
MARCH/APRIL 2014
Nat Sherman is offering a limited production format in
three of their most
popular
blends
from the Dominican Republic, The
Timeless
Collection, 1930 and Sterling. The Super Lancero measures 8x38, a
half inch longer than a traditional Laguito No.
1 Vitola. “The lancero format is an extremely
elegant size, allowing the smoke’s flavor to
remain focused, without incorporating as
much air into the smoke as larger ring gauges
do,” says Michael Herklots, executive director of retail and brand development for Nat
Sherman International. “The extra length of
the cigar gives greater opportunity for the experience and flavors to change and develop
from start to finish, while keeping the smoke
cooler longer.”
“The Super Lanceros are manufactured in
limited quantities at The Quesada Factory
(formerly known as MATASA) in Licey, Dominican Republic, just outside of Santiago.
Only one team of rollers is tasked with making this coveted size,” adds William Sherman,
executive vice president of Nat Sherman.
“Small ring gauges are among the hardest vitolas to make, as it’s very easy to under-fill
or over-fill. We have one expert team in the
factory that is carefully bunching and rolling
these cigars to ensure they’ll draw and burn
perfectly.”
The Super Lancero Timeless Collection
comes packed in boxes of 10 cigars with
an MSRP of $110 per box, the 1930 Super
Lancero is $150 per box and the Sterling Super Lancero is $180 per box. Nat Sherman,
NatSherman.com
PRODUCT PROFILE
MARCH/APRIL 2014
A POWERFUL ROLL
Republic Clears
Things Up
Republic Tobacco’s new Kwik Kleer Lens
Wipes are individually-packaged wipes
with a clean, fresh scent. The moistened,
non-abrasive sheets clean eyeglasses,
sunglasses, cell phone screens, computer screens and more. Ten individual
foil-sealed packages are packed per box
for 99 cents each, or a three-tier counter
merchandiser ships ready to sell with
48 boxes per display. Republic Tobacco,
800-288-8888
92
TOBACCO BUSINESS
MARCH/APRIL 2014
Republic Tobacco has launched the PoweRoll Electric King Size Cigarette Machine by TOP-O-Matic, which combines one-touch automatic operation with
the quality and durability of the popular TOP-O-Matic line. The PoweRoll machine comes with tamper and cleaning tools, instructions, and a one-year,
one-time limited warranty, all packaged in its own carrying case.
With the PoweRoll, cigarettes are made in seconds with three steps: fill the
tobacco chamber, place a tube on the nozzle, and push the start button. The
PoweRoll King Size Cigarette Machine is individually boxed and sold in cases
of four units that display in a small footprint on a counter or shelf. Republic
Tobacco, 800-288-8888
WOW
E-Cigarette
Vapor4Life recently introduced its WOW Vapor
King disposable e-cigarettes at the Tobacco Plus
Convenience Expo in Las
Vegas. After four years in
development and more
than 200 hours of taste
testing, the Vapor4Life
company has released a disposable e-cig available in two flavors: Tobacco
and Menthol. Both flavors are available in Regular (2.6 percent nicotine) and
Strong (3.6 percent).
“For years I’ve been trying to find the perfect solution for a disposable
e-cig. I have tried over 500 brands of disposables,” says Steve Milin, Vapor4Life founder and CEO. “Nothing cut it. My disposables deliver a true smoking experience: perfect tobacco flavor, a realistic throat hit, and huge vapor.”
Vapor4Life, wowvapor.com
PRODUCT PROFILE
MARCH/APRIL 2014
Xistix
94
TOBACCO BUSINESS
MARCH/APRIL 2014

Publication - Tobacco Business Online

Transcription

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