Tobacco Today, Tobacco Tomorrow

By
Mitch Morrison, Vice President & Group Editor

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I don’t care much for computers or email,” the man told me. A career person for close to five decades, he professed that the tools of the trade that worked well for him in the ’70s and ’80s remain sufficient today.

My instinct was to dismiss him as an anachronism, a relic, a dinosaur whose professional future had past.

Around the same time, I visited several convenience stores and tobacco shops. Two locations—one c-store, the other a tobacco shop—reminded me of my friend’s comment. The sites’ displays and plan-o-grams had probably changed little over the past couple of decades. Yes, I saw some of the hotter brands and even one SKU or two of snus. But the lighting, fixtures and feel of the store were scenes from an earlier generation.

Why is this important? Our second annual CSP-NATO Tobacco Supplement is replete with legislative strategy; in-depth reports on emerging categories such as snus and e-cigarettes; and insights and thoughts from the suppliers who drive our tobacco business across cigarettes, cigars, MST, pipe tobacco, RYO/MYO and developing segments.

What those stories do not do—nor were they intended to—is tell us about you. How’s your business doing? Are you operating the same way you did five or 10 years ago? How do you plan to stay competitive and perhaps even drive change in the market?

For that, our second annual survey of tobacco shops and c-stores sheds some light and suggests that many of you are altering selection, testing newer yet proven segments, and perhaps (for tobacco shops) expanding more confidently into nontobacco fare.

Fundamentally, what future do you see for yourselves and, if possible, how are controlling your future? We hope to talk more about this at the NATO Show in Las Vegas. Some question to consider:

How have I evolved my business over the past decade to stay relevant? Let’s be more challenging: What have I done in the past year to bolster my operations?

This is not about carrying a bit more Skoal or Red Man, Marlboro or Newport, or the latest flavored cigarillo. It’s much bigger. It’s about whether you’re acting on shifts in consumer behavior, anticipating a more holistic tobacco set that is less dependent on cigarettes, and investing in your store to give consumers an urgency to patronize your location.

Can I insulate my company from the capricious world of legislation and taxation? We know we cannot ignore local or state levies or FDA governance. But how do we transcend them? Think of this in another way. In the NBA and NFL, players operate within a game block that imposes rigid limits on how much time you have per each possession. Some teams and players have mastered the clock: the 2-minute drive of an NFL matchup, or Kobe Bryant in the final 3 seconds of a tight NBA game. Is there a way for you to take the barriers and turn them into competitive advantages? Also, are you thinking several plays ahead, or one move at a time?

It is time to think about tobacco’s future—your future—and how you will operate in an environment that could include graphic warning labels on cigarette packages, restrictions on flavored cigars, further limitations on merchandising and, on a potential positive note, a new era of modified-risk products.

We’re already hearing some retailers talking about creating special zones to call out smokefree, spit-free products. Others are taking a deep dive into e-cigarettes and are training their store clerks on how best to educate the end user.

 One c-store retailer shared the following: “We’re going through a psychological shift. For years, all our CSRs (customer service reps) had to do was sell cigarettes and some OTP. Now we’re educating them in snus, e-cigs, orbs and roll-your-own.

“It’s no longer enough to have the product in stock. We need our front-line folks to help our consumer know what we have and how to use them.” 

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