Change always produces unintended consequences to go along with whatever seemed like a good idea at the time.
When desktop computers took much of the drudgery out of corporate planning and finance, the intended benefits would include reduced paper use that would save entire forests. The result turned out to be a 10-fold increase in available business data and information. Paper use more than doubled and led to the invention of Staples Business Centers.
When flavored cigars are finally banned from convenience stores sometime in early 2024, the back counter cigar selection will be reduced by as much as 50%, depending on how narrowly the Food and Drug Administration (FDA) enforces its own rules. Cigar brands will adjust their SKUs to fill some slots.
Cigar smokers’ thoughts about all this remain to be seen. Without flavors, a substantial number will find a better cigar to relax with. If the price is right, they’ll be able to relax a little more often. Imported cigars in convenience stores may benefit from the new rules.
This is where the law of unintended consequences comes in. Long before flavors ruled the shelf, cigars were a mainstream pastime. General Cigar shipped a billion William Penn cigars in 1952. White Owl sponsored the New York Yankees on TV. Cigars helped get presidential candidates nominated. Cigarette sales declined in the late 1960s, followed by sales of nearly 2 billion Tiparillos a year, bought by smokers who wanted to feel better about themselves.
Backbar Evolution
The point is that when flavored cigars go away, we aren’t going to stop smoking cigars. In fact, a lot of cigar smokers who lose their favorite flavor will feel compelled to try something better. When they do, a trend toward quality may well emerge.
After the pandemic, economic uncertainty and political chaos of the past few years, some of us just want to slow down and enjoy a good cigar. College football games are now celebrated by fans (and quarterbacks) on TV with good cigars.
Over the past 15 years or so the c-store cigar section became segmented into flavored and non-flavored items. Flavor facings from Swisher, Backwoods Smokes, Black & Mild, Game and others became 51% of c-store sales.
In the same timeframe, premium imported cigar brands led by Macanudo, Romeo & Juliet, Cohiba and others began offering pouched single-stick choices. Premium imports are setting records, even at prices that stretch the wallets of c-store cigar shoppers.
More affordable premium imports like Blenders Gold and Cuban Rounds are sharing the resurgence. Three cigars for $11 may be easier to enjoy than one cigar for $12. Cigar smokers quickly discover that what you get in quality difference for the price only matters to the critics.
Unlike cigarettes, cigars are multi-dimensional. Different blends produce different taste profiles and strengths. Different sizes and wrappers offer smokes from 15 minutes to two hours with smoother or bolder profiles. Research from 25 years ago showed that cigar smokers may have up to five brands or sizes they smoke depending on the occasion.
The broader trend in convenience retail is toward upgrading the shopper experience with improved presentation, broader selections and fresh, high quality house brands. By the end of 2023, convenience operators might want the tobacco backbar to be part of the overall consumer quality experience with an upgraded cigar selection.
Affordable quality premium cigars for more smokers will mean more sales. This may be the unintended consequence the FDA is handing convenience stores.
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.
