Talking Retail Grocery and product news for independent retailers
In fact, the value of tobacco in independents and symbols totalled £6bn in the last year, with the ready-made cigarettes market accounting for £4.2bn.
The vape market, meanwhile, is continuing to expand as more consumers seek out alternative nicotine solutions.
In the UK alone, the category is now worth about £1.2bn and is expected to reach £1.47bn in the next three years, with about 35% of current vaping volume sales taking place in the convenience channel.
For stores to capitalise on this opportunity – and further grow these important categories – suppliers stand ready with a mixture of both new products and category management advice.
Latest products
“Having up-to-date knowledge on the latest products is key to offering a good level of customer service,” says Gemma Bateson, sales director at JTI. “To confidently talk about new products, retailers and their staff should use all the platforms available to them.”
Providing access to up-to-date category trends and advice has been a particular area of focus for JTI in recent years, Bateson says. “Last year, we announced the transition of our sales force to business advisers, who are allocated to smaller, dedicated catchment areas where they are responsible for every trading channel – from independent to key multiple grocers and wholesale.
This means they can provide a more bespoke, personal service, so they can identify commercial opportunities with their trade partners to an even greater extent.
Retailers can find out more information on who their new JTI business adviser will be by calling JTI’s customer care line,” Bateson adds.
Online resources
Imperial Tobacco, meanwhile, says retailers have easy access to a broad range of information and guidance through its online resources.
“We recommend that retailers and their employees are fully trained and equipped to offer those shopping in their store a tailored and personal experience to ensure repeat visits and customer loyalty,” says Tom Gully, head of consumer marketing at Imperial Tobacco.
“It is key that staff are encouraged to read the latest category developments, news and features in the trade press. This is an effective way for employees to gain further insight and understanding into the key trends, different terminology and new products available.
“There’s a wealth of information at their fingertips that will go a long way to help them build their knowledge of the category.”
Tobacco accessories
Gully says much of the information store owners might need is now available on their smartphone. “Our Ignite app is another useful resource for retailers, allowing both them and their staff to stay on top of the latest news, information and all training opportunities to ensure their store runs to its fullest potential,” he says.
“The app offers users a range of helpful tools and advice, including incentive articles, downloadable POS, product information and key tips on how to maximise sales in-store.”
Supplier guidance is available across the vaping and tobacco categories and, when it comes to tobacco accessories, Republic Technologies provides its own list of must-stock products.
“Swan Fresh Burst Crushball’s range continues to be the best-performing menthol capsule filter in the market, exceeding all sales expectations and giving retailers great results,” says Gavin Anderson, sales and marketing director at Republic Technologies.
Swan Cool Burst Crushball and Swan Fresh Burst Crushball both come in two-part sliding packs containing 54 filters, with an RRP of £1.35.
“Shoppers are also actively seeking more sustainable products across all categories, including more-natural ingredients, and reduced single-use packaging,” says Anderson.
Swan Eco Loose (RRP £1.45 for a box of 200) is described as the “most environmentally friendly filter in the UK market” and is 100% biodegradable and made from unbleached paper.
OCB Virgin Slim (RRP £1.04) and OCB Virgin Slim & Tips (RRP £1.63) both include unbleached papers and are manufactured using OCB natural gum, which is said to be sustainably sourced from African acacia trees.
Cigars category
The cigars market also remains an important part of the total category. “It’s always important for retailers to offer a range of cigars with different price-points to meet different consumer needs,” says Alastair Williams, country director at Scandinavian Tobacco Group UK.
“The cigarillos category barely existed three years ago, but now makes up more than 46% of the total volume and just under £100m in value sales. Our Signature Action brand is not the best-selling cigarillo on the market, but it is growing steadily in popularity and is a good option for adult smokers who enjoy the peppermint flavour.
“Aside from cigarillos, retailers should also consider brands in both the small and the medium/large segments to ensure they are covering their bases, so think about including the top-selling brands from each segment as a minimum.”
Heated tobacco
In the heated tobacco sector, JTI has recently launched a new Ploom X device to further grow this still-new category. “The new device builds on our growing presence in the evolving heated tobacco category and responds to the needs of existing adult smokers and vapers.
Representing the next generation of heated tobacco, it offers existing adult smokers an alternative but familiar experience by heating tobacco instead of burning it,” says Bateson at JTI.
Ploom X is available online and through the firm’s accredited retailers programme across London. Philip Morris’s heated tobacco range, meanwhile, has seen the relaunch of the IQOS 3 Duo with the simplified moniker IQOS Duo.
While supplier guidance and product development provides stores with many opportunities to grow sales, the industry is clear that threats – particularly from the illicit trade – do remain. Philip Morris and KMPG recently commissioned an independent report to look at the consumption of counterfeit and contraband cigarettes across the UK.
The report includes figures from a variety of regions highlighting which had the highest consumption of illicit cigarettes. “In the UK, the consumption of counterfeit and contraband cigarettes rose by 4.2% in 2021, which is the highest rise of the last five years.
“This increase was fuelled by counterfeit cigarettes, growing by 34.1% in 2021, meaning they are now the most prevalent form of illicit cigarette in the UK,” says Kate O’Dowd, head of commercial planning at Philip Morris Limited (PML).
Illicit market
From a regional perspective, the report shows the north-east of England had the highest total consumption of illicit tobacco (29%), with London one of the lowest at 13%.
“Here at PML, we have test-purchase teams that help gather evidence and intelligence to support the prosecutions against retailers who still stock and sell illicit products.
“Our undercover operatives regularly visit retail premises the length and breadth of the UK, gathering intelligence that is shared with trading standards and law enforcement to assist their efforts to take action,” says O’Dowd.
James Hall, anti-illicit trade manager at Imperial Tobacco UK&I, says independent retailers can be the ultimate victims of a buoyant trade in illicit tobacco, making them vital stakeholders in the fight to curb it.
“The sale of illicit tobacco and vape products has a direct impact on retailers, especially where there is illicit trade taking place nearby. It is therefore important that retailers and their staff are well educated on the issue so they can stay vigilant and notify the relevant authorities of any suspected illicit sellers in their area.”
Yet, by increasing category knowledge, stocking new and relevant products and helping to fight the illicit trade, independent retailers also have a clear three-pronged strategy for success as we begin 2023.
Click here for more SUPPLIER INSIGHT on tobacco and vaping
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