Scandinavian Tobacco – leading the UK cigar market

The Cigar category is now worth £252 million and miniature cigars continue to be the driving force behind sales, with the segment making up almost 63% of all sales in terms of volume.

Scandinavian Tobacco Group UK’s (STG) is now the market leader in the cigar market, with its leading brands like Café Crème and Henri Wintermans. Here Alan Graham, Scandinavian Tobacco Group UK Limited Head of Marketing  offers his advice on how retailers can make the most of their cigar sales.

Trends

Over the last ten years, there has been a shift with miniature cigars consistently stealing share to overtake small cigars due to a sustained demand for brands such as the Café Crème family. The popularity of miniature cigars shows no sign of slowing, as they appeal to smokers that are living increasingly busy lifestyles and are limited in where they can smoke. The Café Crème Blue variant leads the way and commands over a third of total sales in the miniature cigar segment and is the best selling miniature cigar in the UK.

Retailers should also be paying attention to the Smalls segment, which still has the highest share of value in the cigar category and the Medium-Large cigars which add value and consumer choice thus ensuring a complete cigar offering.

An increasing trend, which has taken longer to develop in the cigars than other FMCG categories during the recession, is the consumer demand for value for money cigars. Now is there is an established market for products that meet this need. STG responded to this trend by launching Moments, a value for money range that comes in Smooth and Original variants, and is selling strongly.

Top cigar brands, according to share in the UK:

Miniature

Café Crème Blue 33.5%

Hamlet Miniatures 21.4%

Café Crème 20.1%

Royal Dutch Miniatures 7.5%

Café Crème Filter Arome    5.6%

Royal Dutch Miniatures Blue 2.6%

Café Crème Express Blue    2.4%

Moments Miniature Blue 1.8%

Small-Medium

Hamlet 41.9%

Classic 26.8%

Panama 9.4%

King Six 4.5%

Henri Wintermans Slims 3.7%

Large

Henri Wintermans Half Corona 52.1%

Villeger Express Pressed 19.6%

Castella Panatellas 18.6%

Advice

The ST Group UK Limited takes the subject of category management very seriously and all sales representatives are dedicated to offering impartial advice to retailers on how to successfully manage their tobacco gantry through plannograms and regional sales data-

To maximise your cigar sales, STG UK recommends:

• Make sure that you stock a balanced assortment of quality imported cigars as they stimulate the tobacco category and     drive incremental sales and impulse purchase

• Although cigars sell in smaller volume than cigarettes, cigars generate more profit per pack than cigarettes and are also important to the tobacco category

• Imported Brand leaders such as Café Crème and Henri Wintermans and their cigar families are dominating the UK cigar market, so make sure you stock these brands

• Invest in effective category management. ‘Brand Block’ imported cigars and ‘double face’ the miniature segment leaders, Café Crème Brand Group (Café Crème, Café Crème Blue, Café Crème Filter Arôme, Cafe Creme Silver Filter, Cafe Creme Express Blue and Cafe Creme Grande)

• Larger imported cigars like the Half Corona and Corona De Luxe drive incremental sales and provide excellent profit margins. These cigars are particularly strong during key trading periods such as Summer and Christmas.

For more advice and support, speak to your local STG UK representative or call 020 8731 3400.

All figures quoted are SymphonyIRI, for the period ending 14/04/2012