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03/22/2022

Igniting cigar sales at convenience

An evolution in cigar offerings is catching the attention of a young-adult demographic.
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woman smoking cigar
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Cigar smokers are bucking the downturn in tobacco use. The global market for cigars and cigarillos is expected to increase at a compound annual growth rate of 3.1% from 2019 and 2025, according to Grand View Research data. Health Canada stats from 2019 found that 3% of Canadians reported smoking some sort of cigar in the previous 30 days and anecdotal evidence shows the momentum continued throughout the pandemic.  

Why the uptick? It’s complicated—and not chalked up readily to just one factor. COVID in some ways has helped cigar sales. With Canadians not travelling as much to their favourite top cigar-producing destinations like Cuba and the Dominican Republic, they aren’t coming home with a big box of cigars picked up during their vacays.

And, let’s face it, the pandemic has made us all a bit more indulgent in our choices. We feel we deserve to enjoy those pleasures as part of everyday life and not wait for special occasions. Shoppers have also been somewhat reluctant to make separate trips to specialty boutiques to buy specific items, making c-stores extra attractive to cigar buyers.

At the same time, who is purchasing cigars has also evolved beyond the traditional demographic—older men—and shifted to younger adult purchasers.

Over the last few years, we have noticed a diversification in the market,” explains Jean Paul Brown, business development, Vale Republic Ltd., a company that sells rolling papers, pre-rolled cones and whole leaf fronto/grabba tobacco, popular among roll-your-own cigar smokers.

“We are seeing more interest from women generally.” Having female celebrities, like Beyoncé, Madonna and Jennifer Lopez, go public with their love of cigars can’t help but spark interest.

“Also, with the legalization of cannabis, younger consumers are purchasing less expensive convenience store cigar products to complement their smoke,” he adds. “Shoppers are much more price sensitive and are looking for ways to save money.”

Along with the diversification of cigar buyers, companies have followed suit by shaking up their offerings. “Over the years, companies have been getting increasingly innovative, resulting in more product options, giving consumers assortments of new sizes, blends, and tastes to suit their preferences,” notes Brown. And instead of going to specialty cigar shops, consumers are turning to convenience stores as an accessible option.

Looking forward, as COVID-19 restrictions continue to ease, Brown predicts that more tobacco companies will start to attend trade shows and participate in other customer-facing marketing activities to further spur growth of the cigar market. He also sees the potential of strong sales for grabba cigars among younger smokers. “We expect the trend to continue on an upward growth trajectory,” he says.

Convenience stores are very important to sales, as much of their revenue comes from tobacco products. “There has been significant year over year growth over the past decade with convenience store cigar sales,” Brown says.  

Daniel W. More, president, Brigham Enterprises Inc., agrees: “We see convenience stores, both chain and independent, as being extremely important, especially for machine-made cigars. The average consumer for these products is accustomed to finding them available conveniently in the C&G channel.”

On the premium side, he points to trends in cigar wrappers and sizing, but says it’s cyclical with these trends returning every four to five years. Because of federal and provincial restrictions, capitalizing on the latest thing generating buzz is difficult. For example, More points to the popularity of Russian cream flavours, now doing very well in the United States (convenience giant 7-Eleven displays premium cigars in cedar-lined humidors as part of its new Evolution Stores concept). However, Canadian restrictions prohibit such flavours. Unfortunately, More says this serves only to fuel the demand for illegal importation and distribution through other channels.

Still, there are opportunities for c-stores to spark the interest of cigar customers with well-curated selections that speak to their local demographics. 

 

This article originally appeared in the March/April 2022 edition of Convenience Store News Canada

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