Tobacco Accessories Heat Up

While lighters and cigarette papers have been the traditional backbone of the tobacco accessories category, the vaping segment offers new opportunities to grow sales.

By John Lofstock, Editor

The tobacco accessories category continues evolving thanks to new products and a renewed willingness by convenience store owners to carry these new products, specifically items associated with vaping.

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The growth potential within the vaping category is projected to remain strong for years to come, according to Lou Maiellano, president of TAZ Marketing and Consulting Group.

“Retailers embracing vaping products and doing it responsibly will attract a new loyal base of consumers,” Maiellano said.

The importance of these customers extends well beyond the vape juice, the fluid used in vaporizers to create vapor. Accessories such as batteries, atomizers and carrying cases are important components for vape customers. They attract customers and bring higher rings, Maiellano said.

When it comes to tobacco accessories, the 2018 National Association of Convenience Stores ( NACS) State of the Industry Report (SOI), released in April, pointed out that vaping is the “fastest growing” other tobacco (OTP) subcategory, presenting new opportunities to carry and sell vaping equipment.

According to NACS, three key points will affect vaping’s future:
• Vaping benefits from evolving tobacco consumers, who are willing to trade up to higher price points to try new products and new flavors.
• Growth in the c-store segment is expected to come from closed system, pod-based vaping devices.
• The vaping industry and retailers await key decisions from the U.S. Food and Drug Administration (FDA), and focus on growth in the short term. At presstime, the FDA made its first move when the administration revealed a four-stage enforcement and inquiry effort to better understand the growing use of electronic cigarettes by underage teenagers.

Responsible c-store operators have little to worry about as many insiders fear underage teens are illegally purchasing these products online at sites such as Ebay, where safeguards to accurately identify the consumer and their age are often ignored.

“This is a problem that hurts all the responsible retailers,” Maiellano said. “No one wants minors to have access to these products, but when people don’t do their jobs properly, it affects all the hard-working companies that sell these products responsibly.”

Given the current market for tobacco accessories, lighters, rolling papers and other product lines produce an excellent margin for c-stores—between 40-50% in some cases.

Though vape represents new OTP opportunities, traditional tobacco accessories continue to yield solid results for convenience retailers.

Standard disposable lighters remain a top seller, and BIC USA Inc. maintains a stronghold. According to scan data by Information Resources Inc. (IRI), a Chicago-based market research firm, the company commanded nearly 90% of the dollar share among U.S. convenience stores for the 52 weeks ending Dec. 31, 2017. The remaining listing was divided up among the following: Halpern Import Co., 3.30%; Calico Brands Inc., 0.89%; MK Lighters, 0.70%; and Wing Sale, 0.66%.

In terms of dollar figures, BIC USA recorded more than $555 million for the same period, which is up from the $534 million earned in 2015. Halpern Import’s 2017 earnings reached more than $20 million, and competing lighter brands posted less than $6 million each.

“When it comes to lighters, the best practices apply,” Maiellano said. “Give them space and offer a good variety on an ongoing basis. Don’t bury them on the back bar where your customers can’t see them.”