Last year, 40% of adult smokers chose flavored cigars and menthol cigarettes. They accounted for about $20 billion at c-store cash registers. Some 35% of menthol cigarette smokers also enjoyed vape, cigars, smokeless tobacco and oral nicotine alternatives, mostly flavored. Smokers’ flavor preferences won’t change after the Food & Drug Administration (FDA) bans finally go into effect. Then what?
Research and recent history show that most menthol and flavored tobacco smokers in California won’t like their non-flavored alternatives, but they’ll keep smoking anyway. Many will look for menthol and flavors elsewhere, like on the internet or across state lines. California has no punishment for consumer usage, only retail sales.
The FDA says the ban will save lives. The White House says push it back another year. The The Centers for Disease Control and Prevention (CDC) projects a declining smoking population at pretty much the same pace as the past five years.
In the meantime, state flavor bans are already being proposed in legislatures or committees in at least eight other states. Will the FDA delays accelerate state-level momentum? State governments run on tax dollars.
What Will The Flavor Ban Offer Smokers?
Here’s the $20 billion question created by the FDA; what will menthol and flavor smokers do about the ban? The National Association of Convenience Stores (NACS) General Counsel rightly pointed out to the President that banning tobacco products without offering alternatives or guardrails will result in unintended negative consequences, including untaxed distribution, illicit sales and deviations in quality.
Right now, nicotine-free, non-tobacco flavored & menthol smokes are beginning to reach c-store shelves in California and Massachusetts. They should roll out to the rest of the U.S. beginning about three months before the FDA ban is actually enforced. They’ll offer menthol and flavor smokers the taste they wanted in the first place. Nicotine-free flavor profiles and botanical blends won’t match the volume of the menthol cigarettes and flavored cigars they replace, but research shows continuing taste preferences and a tax-free sales structure can produce a sustainable bottom line.
Historically, non-tobacco cigarettes have been herbal or hemp. The intended purpose was cessation via boring taste, resulting in less than a 1% market share.
Exceptional flavor experience will be the new focal point. Independent consumer trials show new menthol products taste better and offer the desired familiarity, especially for the notable percentage of smokers who say that menthol taste (or clove, or coffee or wild cherry) is more essential than nicotine.
The Flavored Smoking Section
In order for menthol and flavored smokes to continue beyond the first several trial packs, two things need to happen. First, nicotine-free smoking enjoyment needs to focus on the flavor experience rather than the botanical content. New shelf-ready menthols deliver taste similar enough to tobacco that in recent trials, 56% of menthol smokers said they’d likely purchase them after their regular brand is banned. When asked about the importance of nicotine, nearly 20% of them said they were glad the nicotine was gone.
Second, nicotine-free flavored smokes should have their own section on the backbar shelves, even if limited. Given the newly available space, that shouldn’t be too hard to arrange. The flavored smoking section also will need to be distinct from tobacco products. This will guide flavor smokers to their transition and assure store personnel that nicotine-free menthol and flavored smokes are outside the ban.
Properly marketed, the introduction of non-tobacco, nicotine-free smoking choices will create a new definition for a flavored smoking segment. After the ban there should be plenty of shelf space to set its own section.
Current predictions for the future of the tobacco backbar are almost entirely based on the power of addiction to nicotine. Ignoring the preference for menthol and flavors by 40% of smokers after the ban will be a missed opportunity.
Afterthoughts
The predicted illicit market for menthols will be a self-induced problem, made costly by rules that will be more expensive than they’re worth. CDC math says the same results will be achieved over the next few years through the changing priorities of a declining percentage of young menthol experimenters and the aging-out of the current menthol smoking population.
The White House is advocating a cap on nicotine content in tobacco. New flavored menthols already have that beat. Flavor science, alternative botanicals and hemp may not create safer smoking, but it dramatically changes the dynamic of self-control among menthol smokers, as well as flavored cigar smokers.
For more information contact: John Geoghegan, [email protected]
John Geoghegan has spent the last 30 years in the tobacco business, including vice president strategic planning at General Cigar Co., U.S. manager for DjEEP Lighters, head of marketing for Kretek International Inc. and manager of LaMirada Cigar Co. He began his career 57 years ago at Procter & Gamble. Geoghegan is a graduate of the University of Cincinnati. He lives in Laguna Niguel, Calif.
