There is an interesting dynamic affecting the roll-your-own (RYO) tobacco segment for convenience stores. On the one hand, the smoking population continues to shrink, so the customer base that likes to roll their own cigarettes, which is already a niche group, keeps dwindling, too. At the same time, an expanding market for legalized cannabis offers convenience stores access to new RYO customers who are not interested in tobacco.
Another influential development is regulatory attention. While most of the tobacco category has been impacted by increasing restrictions, loose tobacco has been left out of that fray for the most part. In fact, over the past several years, flavored RYO papers offered smokers a chance to enjoy flavors other than tobacco or menthol while flavored nicotine products were pulled off backbars. Now, some local authorities have turned their attention toward the smallest tobacco segment.
“We have been battling a flavor ban within the city of Columbus, Ohio, that went into effect at the start of 2024. The flavored wraps and tubes are included in this ban and are not permitted for sale. This has begun to impact the RYO category, (but it’s) too early to determine the overall effect,” said Nathan Arnold, director of marketing for Englefield Inc. The company operates 119 Duchess convenience stores and BP fuel sites throughout The Buckeye State and one store in West Virginia.
At least for the time being, Arnold does not plan on making significant changes to the impacted stores. Nor does he anticipate altering how he markets the segment.
“RYO is a category that has minimal space in our tobacco sets and stores. Due to it not being planogrammed into permanent tobacco space, the RYO items are at a disadvantage (and) we see the sales of this category to be minimal,” Arnold said.
Sales Considerations
Circana reported that, in U.S. convenience stores, RYO tobacco dropped in dollar sales by 3.4% for the 52 weeks ending Dec. 31, 2023, and unit sales fell by 6.6%. Although pipe tobacco brought in more than twice as much in total dollars, it experienced even greater losses in year-over-year comparisons.
While RYO sales were down across the convenience store channel as a whole in 2023, the segment’s popularity can vary greatly based on location.
On the West Coast, Jon Manuyag, director of marketing for Beaverton, Ore.-based Plaid Pantry, intends to pump up the segment at the chain’s 107 stores after posting gains of 7% in dollar sales last year and 5% in units.
“With the price of cigarettes continuing to climb each year at a fast rate, consumers are looking for options to maximize their tobacco spend,” he noted. “For this year’s planning, I will be looking at additional options on RYO and papers to ensure our mix is enhanced.”
