Convenience Store News - July 2018 - 60
Putting Cigars in the Fast Lane
Five tips for getting the most out of this high-speed
growth segment of tobacco By Renée M. Covino
REV YOUR ENGINES, tobacco category decision makers.
Cigars are not only growing in the convenience channel,
but they're accelerating at a faster and faster clip.
Is your cigar strategy set to the right speed?
Sheetz Inc. is just one convenience store chain on-trend
with cigars and devoting more and more space to the
segment, according to David "Woody" Woodley, executive
vice president of sales and marketing for the Altoona, Pa.based retailer, operating more than 540 stores throughout
Pennsylvania, West Virginia, Virginia, Maryland, Ohio and
"We believe cigars will continue to grow, so we are going
to continue to dedicate the space to the segment," Woodley told Convenience Store News.
If recent data is any indication, Sheetz is on the right
track. Industry dollar sales for cigars were up in the lowto mid-single digits in 2015, up in the mid- to high-single
digits in 2016, and up nearly 15 percent in 2017. Unit growth
is even more impressive. Industry data shows that cigar
units have been growing at double-digit monthly rates for
several years and, according to market researcher Nielsen,
cigar units grew 18 percent during the latest six months,
while sales dollars grew by 17 percent.
"What is interesting is that the monthly cigar growth
rate is accelerating over the last two years; it's actually
growing by a faster and faster rate, in both units and
dollars," noted Joe Teller, director of category management at Swedish Match, manufacturer of the White Owl
and Game cigar brands.
Teller says the cigar segment is unique in that there is
"abundant organic unit growth," compared to the typical
declines seen in cigarette unit growth.
60 Convenience Store News C S N E W S . c o m
"The cigar category has been growing in all major classes
of trade, but fastest in convenience stores," he said. "That
means convenience stores are gaining market share of the
No Time to Idle
With so much growth potential, this is no time to sit idly
by. C-store operators can get the most out of the cigar
segment by following these five tips:
1. Rev up the natural and rolled leaf subsegments
By far, the fastest-growing cigar subsegments currently are
Natural Leaf (think Game and Dutch Masters) and Rolled
Leaf (think Backwoods and Game Leaf), according to
Teller. Woodley confirmed that natural leaf cigars are performing well for Sheetz, and more space is being dedicated
to this subsegment.
For clarification, natural leaf cigars are mass-produced
cigars with a tobacco leaf on the outside as a wrapper.
The inside of the cigar is homogenized tobacco leaf (HTL),
basically pulverized in a similar way to how paper is made.
Rolled leaf cigars are made exclusively of tobacco leaf.
They appeal to consumers because they have a more
premium look than regular, mass-produced HTL cigars, yet
are competitively priced.
According to Nielsen large c-store chain data, Natural
Leaf grew 34 percent in dollars over the last six months,
while Rolled Leaf grew 63 percent, far faster than
"Together, these two comprise half of all cigar category
growth," stated Teller.
2. Go wide on variety
With so much activity in the cigar segment, c-stores are
wisely ensuring there's adequate space with a large variety to
choose from, said Teller. Woodley affirms that at Sheetz, the