Pouches aren’t the only modified-risk products hitting backbars right now. The Food and Drug Administration (FDA) is accepting public comments on modified-risk renewal applications for iQOS 3.0 and 2.4 system holders and chargers plus HeatSticks in Amber, Green Menthol and Blue Menthol.
Herbal cigarettes is an alternative catching the attention of tobacco/nicotine category managers, too.
“This is on our radar, but we’re not moving forward with it at the moment,” noted Jon Manuyag, director of marketing for Plaid Pantry. “We’re waiting for large distributor partners to carry these items, which will provide additional layers of risk control. For now, we’re taking a wait-and-see approach to observe the performance and consumer demand for herbal products and CBD-related items.”
Indeed, interest in cannabidiol (CBD) items seems to be a bit mercurial at the moment. According to Circana, some CBD products posted extraordinary gains, while others incurred substantial losses. The top sellers for 2024 were premixed cocktails/coolers/hard seltzers with more than 2,882.8% growth, whereas sleeping aids fell by 85% in dollar sales. Interestingly, tobacco accessories within the CBD silo grew by 795.6% in dollar sales and 144.1% unit sales.
Tobacco Accessories: Welcome Surprise
In fact, tobacco accessories overall for convenience stores posted profits, up by 6% year over year for dollars although units rolled in flat at 0.7% for calendar year 2024 ending Dec. 29, per Circana.
At Duchess, Nathan Arnold, director of marketing, added emphasis to these add-ons last year.
“Our display and marketing efforts for accessories, papers and lighters have changed over the last year. Some additional SKUs in these categories have been added to meet the demand from customers,” he said.
Scrivener Oil’s Sean Bumgarner, VP of Scrivener Oil Co., also plans to reassess the tobacco/nicotine category.
“While we have not altered our displays or marketing efforts so far, we plan to implement changes this year to prioritize our high-growth products. This will include reducing the space allocated to slower-moving or declining products,” he said.
Acclimating to Change
With cigarettes and other tobacco products among the top five profit-producing categories for convenience stores, per NACS, category managers cannot afford to be stuck in the past when it comes to inventory formulations. Adding flexibility to planograms that makes room for alternatives empowers stores to respond to customer trends and keep backbars busy.
