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Nearly a year after Congress passed and the president signed a historic increase in the federal excise tax (FET) on tobacco to fund an expansion of children’s health care benefits, convenience store retailers joined to discuss the tax’s implications on tobacco, as well as other factors influencing the category, at Convenience Store News’ annual Tobacco Best Practices Roundtable, held before the start of the Tobacco Plus Expo in early March.
Despite the challenges the tobacco section faces from legislation, FDA control, constricting contracts and more, attendees to the roundtable were generally upbeat about the category’s prospects going forward in areas such as other tobacco products (OTP). Retail chains represented at the roundtable included 7-Eleven, TravelCenters of America, Smoker Friendly, Mac’s Convenience Stores and Royal Buying Group. The event was sponsored by McLane Co. and Republic Tobacco.
The dual user — who smokes cigarettes and uses OTP — is a growing opportunity for c-store retailers, said one attendee. “Many more people today buying moist snuff are smokers looking for tobacco satisfaction when they can’t light up. To a bigger and bigger extent,[link widoczny dla zalogowanych], smokers are also OTP consumers. That will get bigger and overlap,” said Joe Teller, senior category manager for Swedish Match North America and special guest to the roundtable. “OTP will become more important as retailers realize that.” He also attributed the OTP segment’s growth to the blurring consumer profile, and predicted there would be more SKUs in the set and more space allocated to OTP as retailers understand this.
In a plush bar in Johannesburg,[link widoczny dla zalogowanych], Sizwe Ncapayi leans against a gleaming wooden bar counter, strikes a match and – with a flick of his wrist – lights a thick cigar. The businessman smacks his lips as he takes a puff. Ncapayi swirls the smoke in his mouth, rolls his eyes,[link widoczny dla zalogowanych], exhales rapidly and declares,[link widoczny dla zalogowanych], “Wonderful flavor!”
The cigar he holds between thumb and forefinger while sipping his cognac and chatting with his lovely companion is a Cuban Cohiba that costs well over US$ 100. Ncapayi says he spends “quite a lot each month” on cigars, “but not as much as some people over here.”
Most good quality cigars on sale in South Africa range in price from US$ 6 to $50 each. But there are others that are far more extravagant, such as the world’s most expensive cigar – the cognac-infused His Majesty’s Reserve brand. It’s made by the United States-based company Gurkha and produced in the Dominican Republic. It costs US$ 750. That’s almost 6,[link widoczny dla zalogowanych],000 South African rands for a single smoke.
More female South Africans also getting in on the act.
Wesley also sees growing numbers of South African women smoking small cigars called cigarillos. “They’ll be smoking those at a party or at a function, and they’ll want something a little bit exciting, so they’ll smoke that,” he says.
Mulder agrees that his female customers prefer small, flavored cigarillos and says it’s “rare” to see women smoking “proper” big cigars inside his club…. But he adds that “it does happen – usually because they’ve had too much to drink,[link widoczny dla zalogowanych]!”
In that case, says the manager, the women smokers “pout their lips” around a cigar and cover it in lipstick. “They think smoking a cigar is sexy,[link widoczny dla zalogowanych]!” he exclaims,[link widoczny dla zalogowanych], laughing.