The smokeless segment was up 11.6% in dollar sales over the last year, per market research firm Circana, and 8.2% in units, driven, as has been the case for some time now, by spitless products.
Robinson Oil Corp dba Rotten Robbie has seen a shift in smokeless consumers from chew to nicotine pouches. Here, though, the chain is restricted at the state level — “no flavors, no menthol in any tobacco/nicotine pouch product,” said Reilly Musser, VP of marketing and merchandising for the chain.
Younger adult nicotine users are moving to pouches at 38-store Gas N Wash, with variety — such as multiple brands and flavors — driving demand.
“Nicotine pouches have become a true growth engine for our business,” said Aman Sahi, director of retail strategies for Gas N Wash.
Older consumers, however, remain brand loyal.
To drive sales, Gas n Wash is increasing space in the categories driving growth and staying disciplined about carrying the “right brands and the right SKUs within them,” said Sahi. The chain has also been updating stores with older fixtures to improve visibility.
At InConvenience Inc., which operates 29 stores in Iowa, Missouri, Arkansas and Texas, modern oral has taken market space from cigarettes.
“(Cigarettes are) on the decline, and we have seen consumers switch over to products such as On!, Velo and ZYN. Allocating space to high-growth categories is essential,” said Stephanie Hutton, category manager, InConvenience Inc.
InConvenience evaluates its product selection based on profitability, regulatory safety, customer demand and brand reliability.
“One recent example for us is the introduction of higher-milligram nicotine pouches. We looked at consumer feedback and customer demand and decided to bring a small selection to the backbar. Since we have introduced these, we have seen a 1% increase in sales over the last month,” Hutton said.
Over the course of the next year, Hutton expects optimizing and managing the modern oral nicotine space to the biggest challenge.
“There is a high demand in our stores for nicotine pouches with higher milligrams and different flavor variations. Reporting shows that customers are steering away from the basic mint/menthol flavor and are wanting a more fruit-infused flavor profile. With that in mind, I am having the tobacco reps reset our backbars across the chain to accommodate those consumer demands,” she added.
The chain’s human resources (HR) team has also been working to educate employees on the nicotine variations it carries. To that end, InConvenience has been creating resources to send to its teams.
“As tobacco trends change, we want our employees to be knowledgeable about the products our customers are wanting. To do that, we need to provide ongoing coaching and training so they can have a better understanding of how tobacco trends are evolving, ensuring we are giving the best customer service,” said Cailyn Hanson, HR and payroll administrator, InConvenience Inc.
Rotten Robbie, too, values employee understanding of tobacco products.
“Our managers are great with inventory and customers’ tobacco needs; day to day, they are the ones on the front-line growing sales,” praised Musser.
As convenience retailers manage their backbars, Musser recommended having a good pricebook team and keeping a good spreadsheet of the local rules and regulations. She advised reaching out to local regulators if there are any areas of confusion so everyone is on the same page.
“Compliance has to be built into your daily routine. Know the rules that apply to every one of your locations, because they vary by state, county and municipality, and train your teams on them consistently,” Sahi added.
He noted that at the end of the day, the biggest opportunity isn’t a single segment; rather, it’s how quickly you can identify an emerging brand, get it in the door and give it the right SKUs and space before competitors do.
