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9 tips to complete the transition to plain packaging

It’s time. After a year of preparation, retailers will have to sell only products meeting the new plain packaging standards set out by Health Canada as of this Friday, Feb. 7, 2020.

Canadian cigarette packs will have to be plain drab brown with standardized layouts and lettering. The regulations released May 1 also standardized the size and appearance of cigarettes, cigars and other tobacco products inside the packages.

Manufacturers began complying with labelling rules for packages and dimensions for cigarettes in November and retailers had until now to run through old stock.

 

Here are 9 tips to help you and your staff navigate the final stretch in the switchover.

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Plain packaging A Q&A with Norman Pridgeon, JTI-Macdonald

Screen Shot 2020-01-30 at 2.55.21 PMPlain, but not-so simple

Norman Pridgeon, vice-president, sales – JTI-Macdonald Corp., on how tobacco companies and c-stores can work together to navigate the new world of plain packaging.

  1. How is plain packaging reshaping your business in Canada and what are you doing to respond to the new regulations?

Screen Shot 2020-01-30 at 2.54.48 PMOver the last few years, retailers and tobacco manufacturers have successfully navigated a number of regulatory changes—display restrictions, menthol bans and changes in health warnings and packaging—and we expect to manage this transition just as effectively together.   

We’ve learned through each one of these transitions how critical the role of retailers and clerks is in guiding adult smokers through the changes as smoothly and efficiently as possible. This time, we’ve been able to learn from the experiences of JTI markets that have already converted to plain pack and apply the best practices to Canada. From the beginning of this transition to plain packaging, being a true partner through change has been our top priority. 

 

  1. What do you want c-stores operators and their staff to know about the changes? Any tips?

As of February 7, all tobacco products—with the exception of cigars—sold by retailers to consumers must be in plain pack. 

We appreciate how hard c-stores and their staff have been working to get ready for this transition. In just three months, c-stores will have reorganized their storage, shelving, trained staff and sold through branded inventory—this is the shortest implementation timeline of any country so far and the speed and agility Canadian retailers have demonstrated has been truly impressive.  

When you can’t use branding, colour or pack shape to differentiate between products, it will be even harder to provide quick and efficient service to the hundreds of customers c-stores serve every day. 

The experience from other countries tells us that smokers become frustrated as they spend more time waiting in line and as they are more likely to be accidentally handed the wrong tobacco product. 

Tobacco storage needs to be exceptionally well planned and organized so that SKUs can be quickly located when customers ask for them. 

 

  1. How are the changes expected to affect the number of SKUs? 

Under the new regulations, only Regular Size and King Size cigarettes are permitted. This means that after February 7, super slim and super king (or 100s) SKUs can no longer be sold. 

It’s too early to speculate beyond this. We do know that new brands have continued to be successfully launched in markets that already have plain packaging in place, and we know that Canadian adult smokers are discerning. They will continue to seek out the best quality product for the best value and we will continue to take great pride in meeting their high expectations. 

 

  1. How do you think this will influence the contraband market?

When all packs look the same and only the brand name visually distinguishes one product from another, there is a risk that price becomes the key driver and smokers trade down to cheaper products or turn to the illegal market. That’s a risk to all of our businesses and we need to take every action to crack down on illegal trade now and call on governments to step up and do their part.

 We’ve been working with law enforcement to make sure they are aware of the move to plain packaging, understand how this could impact the illegal trade and provide information to help them identify legitimate from contraband product. In a plain pack environment, their jobs become even tougher and it’s up to us to provide them with tools and training to support their work.

 Retailers should continue to be vigilant in reporting any suspected illegal tobacco activity in their area to local law enforcement or Crime Stoppers.

  

  1. What is your company doing to help c-stores prepare for the transition to plain packaging?

It’s in everybody’s interest to have the smoothest possible transition at point of sale, and we’ve been committed to educating and supporting retailers every step of the way. 

Retailers play a critical role in answering questions from tobacco consumers about pack, branding and product changes and it’s our job to help them answer them. When smokers can’t buy super slim or super king cigarettes after February 7, or don’t understand why their pack has changed, retail clerks are the front line. Over the past few months, we’ve set up information sessions, a dedicated trade website and communications materials to explain what’s changing, why, and what the alternatives are. 

We’ve also worked closely with c-stores to better understand their needs going forward, suggest storage solutions and ways to organize shelving so that clerks are able to more easily identify products when consumers ask for them. 

While much of the work will already have been completed before February 7, there is no doubt that it will be an evolution. It’s important that we listen well to what adult smokers and retailers need and respond effectively. 

 

  1. How are you reaching out to consumers to help smooth the transition? 

Screen Shot 2020-01-30 at 2.55.06 PMIn the weeks leading up to plain packaging, we used our packs and advertising in adult-only locations to let adult smokers know that their packs would be changing and alert them to any name changes, as colour-based brand variant names are no longer permitted. We printed the message “Red is Bold” for example, so that smokers know how to order their favourite LD pack after February 7.

We also used these tools to reassure consumers that while the pack and product is now plain, the blend and quality has not changed. This reassurance is critical; when the packaging of any consumer good changes, some consumers will assume that the product is also different. In fact, we would never make a product change at the same time as a pack change for exactly this reason—all of JTI’s tobacco blends and filters remain exactly the same inside their plain exterior. 

This interview originally appeared in the January/February issue of Convenience Store News Canada. 

 


The OCSA shares 9 tips to help c-store adjust to plain packaging

cigarette-1642232_1920-1024x783By now many convenience stores will have started to receive some of their higher volume cigarettes and tobacco products in the new plain packaging. These have arrived while much of the previous stock remains on the shelf, causing confusion.

Retailers have until February 7, 2020 to sell through their slower moving coloured products and the following checklist will assist you in identifying product lineups and new requirements as you reconfigured your tobacco section to ensure speed of service, staff awareness and ease of reordering going forward.

This transition will not be easy as you will have an array of sales people from all the various tobacco companies coaching or influencing you to favour their concepts. Some easy ideas for all retailers to follow can be:

1) train staff as new products arrive in the areas of placement for ease of service.

2) sell through all coloured packaging first and rotate the plain in behind.

3) explain to your customers the change while assuring them that the colours are as fresh as the plain (ask for patience)

4) decide on the best set up for your tobacco section (ie. alphabetical or dedicated flaps for each major product) and minimize the influences to continually change the shelf by tobacco reps.

5) track your sales/inventory closely. This is a good time to re-evaluate which products are most popular as many consumers may move to the cheaper products on the shelf when there is no difference in packaging.

6) ensure you have reviewed your security needs and procedures for the handling of plain packaging from receiving an order, inventory counts and replenishment through proper rotation.

7) work with your local tobacco representatives on product returns and product issues and swap out slower formats as you define the shelves.

8) be patient as this will be somewhat of an operational frustration of the business and spend time with employees to insure they have an understanding of this change

9) be mindful of underground sellers and don’t be influenced to purchase coloured packaging from anyone or compromise your tobacco business with anyone.

Originally published by the Ontario Convenience Stores Association


Why brown?

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The Tobacco Product Regulations (Plain and Standardized Appearance) calls for the use of drab dark brown colour on packs and prohibits the use of any design elements, logos or product branding.

In addition, only regular and king size cigarettes will be permitted for sale in Canada once the new regulations come into effect, with a ban on slim and demi-slim cigarette formats.

But why brown?

“This colour (Pantone 448C) is the package colour selected by all countries that have implemented plain packaging measures for tobacco products. Health Canada also commissioned a public opinion research (2016–17) that confirmed that the Canadian population findings were consistent with those for Australia whereby Pantone 448C, a drab dark brown, was considered to be an unappealing colour.”

(Source: Health Canada, 2018).


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9 tips to help operators prepare for plain packaging

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Tobacco manufacturers are getting ready for the arrival of standardized packaging and preparing to support retailers with a range of measures.

“We are committed to providing clear communication to our retailers so they know what to do, and when to do it,”says Sylvain Laporte, president, Scandinavian Tobacco Group Canada.

Reorganizing storage, training staff and selling through inventory all takes time. Plain packaging will be implemented November 9 at the manufacturer level, and February 7, 2020 at the retail level.

Learnings from Australia

Around the world, several countries have implemented or announced their intention to require plain packaging, and a dozen more are studying the issue. Australia was the first in 2012, and lessons learned by c-store retailers there are helpful to understand challenges and opportunities for Canadian operators.

Plain packaging in Australia has impacted what smokers purchase and retailers have seen a shift towards sub-value, cheaper brands, soprice has emerged as the key driver. “Plain packaging has devalued brands and changed the sales mix sothat the key focus from consumers is on the cheapest price when there is no ‘image’ attached to a particular pack,” says Jeff Rogut, chief executive officer of the Australasian Association of Convenience Stores (AACS). “That affects sales and profit dollars.”

Without colour, pack shape or branding to differentiate between products, providing quick and efficient service is even more of a challenge. That can mean more time waiting in line for customers, and it increases the chances of choosing the wrong tobacco product.

Security measures have had to be strengthened – at retailers’ expense – as the cost of legal tobacco has risen. “Transaction times have increased as store staff must spend a considerably longer time with their backs to customers, sorting through similarly packaged products, increasing the risk of robbery,” Rogut says.

Research commissioned by Philip Morris and supported by the AACS and other retail associations reveals two-thirds of Australian retailers say it takes more time to train staff as a result of the changeover. More than three out of four retailers report an increase in the time taken to serve adult smoker customers.

Caroline Evans, head of corporate affairs & communications at JTI-Macdonald Corp., shares these tips.

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Quotes from this article originally appeared in the January/February issue of Convenience Store News Canada magazine.


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Plain cigarette packs to hit shelves as ‘best in the world’ regulations kick in

Screen Shot 2019-11-01 at 10.35.38 AMSmokers will soon see their cigarette packs stripped of logos and distinctive designs as federal rules make drab brown the default colour for tobacco brands.

Plain-packaged cigarettes have started to pop up on shelves as the tobacco industry prepares for Health Canada’s regulations to take effect on Nov. 9, after which retailers will have a 90-day window to offload their remaining inventory.

All packaging will feature the same brown base colour, basic grey text and minimalist layout under the new requirements. The measures will also standardize the size and appearance of cigarettes, cigars and other products inside the packages.

Health experts and advocates say the policy positions Canada at the forefront of a global push to curb the appeal of cigarette brands, particularly among youth, and eliminate packages as pocket-sized promotions for Big Tobacco.

Rob Cunningham, a senior policy analyst at the Canadian Cancer Society, lauded Canada’s plain-packaging regulations as “the best in the world,” having learned from the examples of at least 13 other countries that have adopted similar measures.

Cunningham adds that Canada is leading the charge in eliminating extra-long and “slim” cigarettes, which tend to be marketed to women.

In 2021, slide-and-shell packages will become mandatory in Canada, providing a wider surface area that will display the largest health warnings in the world, he said.

“This measure is going to have an important difference, especially over time,” said Cunningham. “We will have kids who will grow up not exposed to branded packages.”

As regulators have cracked down on many forms of tobacco advertising, packages have become powerful branding tools to appeal to consumers, said University of Waterloo psychology professor Geoffrey Fong.

“The package designs (are) really amazingly glitzy and very attractive, especially to kids,” said Fong, the founder and chief principal investigator of the International Tobacco Control Policy Evaluation Project.

“What we’ve found is that plain packaging has tremendous effects on reducing the appeal of these deadly products.”

Fong said cigarette packages are designed to deceive consumers into thinking some brands are less harmful than others. For example, he said, studies indicate that cigarette packages with light colours and white space are perceived to have lower health risks than dark-toned products.

Fong said there’s evidence suggesting that plain packaging reduces these misconceptions, while making health warnings more salient by eliminating eye-catching distractions.

In his own research, Fong found that less than 29 per cent of Canadian smokers were in favour of plain packaging – a lower level of support than any other “endgame” tobacco measure tested in the 2016 survey.

He interprets this result not as opposition to the policy, but uncertainty about what it will entail, projecting that approval will rise as smokers acclimate to the new norm.

Tobacco manufacturers expect there will be a learning curve as consumers adjust to the new look, and in some cases, new names of their preferred brands.

For example, Belmont Silver will be known as Belmont Select under the new rules for brand names prohibiting references to colours or filter characteristics.

Jeff Gaulin, director of external affairs at Rothmans, Benson & Hedges, said the company has been working to ensure that retailers are aware of the changes by updating the names in its ordering system months in advance, as well as setting up a website for consumers to find out what products will be affected.

“I think things will go pretty smoothly,” said Gaulin. “That said, there will still be some hiccups… There may be shortages, but if there are, I think they’ll be very, very minimal.”

While he said Rothmans, Benson & Hedges doesn’t oppose plain packaging for conventional cigarettes, Imperial Tobacco Canada objects to the policy on several fronts, said head of regulatory affairs Eric Gagnon.

“You’re changing the entire supply chain,” said Gagnon. “It’s not like you just turn a key on and off. You need to change all your artwork, all your equipment, retool all your machines, so obviously, it’s very costly and a very complex operation.”

Gagnon contends that plain packaging doesn’t work and boosts the illicit sale of tobacco products.

Other industry members have mounted similar criticisms, which the World Health Organization has described as “baseless” and “not supported by the evidence.”

Gagnon declined to comment on whether Imperial Tobacco is considering challenging the regulations in court, but Cunningham of the Canadian Cancer Society notes that tobacco companies have been fighting plain packaging in Canada since public-health officials first put forward proposals in 1994.

In the 25 years since, Cunningham said efforts have been bolstered by a growing body of evidence suggesting these policies have had an impact in other countries, and Canada may be next.

“All of these countries wouldn’t be doing this in the face of strong opposition from the tobacco industry if it wouldn’t work,” he said. “It’s a highly effective measure, and that’s why they’ve opposed it for so long, and that’s why we place great emphasis on it.”