RYO/MYO: Welcome to the Machine

Value, DIY and retro mystique spark RYO renaissance

By
Steve Dwyer, CSP Reporter

Retailer Sam Odeh, president of PBD USA Corp., says convenience stores have to give RYO a “proper home” at retail to succeed. Odeh advises retailers serious about the segment to “make sure you have the machines, paper and bags all bundled together.”
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“POP materials are also key,” says Wortzel. “We happen to be embarking on a sweepstakes programs through couponing, and currently are advertising in 30 niche consumer magazines to drive awareness back to the brands. C-stores will be participating in our couponing programs.”

Odeh of Power Mart says rarely has a calendar quarter passed in which his half-dozen stores failed to launch a promotion behind RYO brands. The proper display of tabletop machines and all the allied accessories “play a big role—make sure you have the machines, paper and bags all bundled together.”

Retailers understand that if they want to win in this category, they have to take advantage of all that it offers—starting with potential add-on purchases with tabletop machines and hand injectors. “If you don’t find some space for it, you’re probably missing out on sales,” says Wortzel. “If Bugler is your top brand, you might want to have the rolling papers that pair well with it.”

To reinforce the role ancillary accessories play, Republic in January launched its PoweRoll Electric King Size Cigarette Machine under the Top-O-Matic brand that offers a one-touch automatic operation and makes rolling cigarettes easy within a three-step process.

Segment ‘Workhorse’

Selling 70% of the RYO volume, all channels considered, c-stores are definitely viewed as a RYO “workhorse,” says Wortzel, who predicts that dollar stores will jump headlong into the RYO category with more gusto in 2014. Therefore, savvy c-store retailers should push the envelope on creative programs—racks, accessories, promotions and strategic product placement that includes one-stop bundling—to remain relevant.

“These varieties carry a retro component; don’t forget that a century ago, roll-your-own is how cigarettes started,” says Odeh, who cites Republic Tobacco’s Gambler as his leading brand. “My personal opinion is the category will always have a place. Building awareness in the store is crucial to feed demand because some people don’t realize we carry it.”

For as long as RYO has been around, some retailers are just dipping their toe into RYO merchandising. Encouraged by his local tobacco distributor to carry Bacco Pipe Tobacco bags at his Fuel Zone store in Decatur, Ala., independent retailer Naryan Baddam put it in last year, where it was merchandised as RYO stock. Baddam says he sells 10 to 15 6-ounce bags per week at about $7.99; he also carries a 16-ounce bag at $13.99.

To generate sales of all tobacco products, including RYO, Baddam, who also owns the Danville Park Shell in Decatur, created a large sign mounted along with his street-side fuel sign that announces “Tobacco Outlet” to build awareness. But in summing up the lack of knowledge novice RYO retailers have when it comes to introducing a new product variety, Baddam says he figured Bacco was primarily intended to be an RYO offering, relying on a local wholesaler to maintain the section. He says that the core consumers of RYO products are 40-year-old and older males, with some female consumers as well.

“Retailers will say, ‘All right, I’ll put RYO in,’ but they don’t hold the supplier accountable,” says Maiellano of TAZ Marketing. “Years ago, when I was with Sunoco, a Lane brand manager came in regularly to educate our retailers about the RYO product. Every single category in the c-store needs its own plan.

“Sit down with manufacturers and establish that plan,” Maiellano continues. “If you have 80 stores, introduce RYO in the five that appear capable of supporting it. If it ultimately works in three or four stores, then concentrate on that lean-and-mean merchandising strategy.”

Earlier this year, Glenview, Ill.-based Republic Tobacco introduced a merchandising rack for properly spotlighting its RYO brands. Rack sizes vary from countertop units all the way up to a 4-foot rack.

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