Right:Heavenly Cigar Co. started out with a basic Vanilla-flavored offering, but over the years has added twists to create such popular flavors as Cupid’s Cherry Cream and Heather’s Honey Nut.
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[ PRODUCT PROFILE]
A tasty trend
Flavored cigars tap niche by appealing to a smoker’s palate
By Maura Keller
In this global marketplace every industry has to adapt, change and evolve to meet the frequently changing likes and dislikes of the consumer. And the cigar segment of the tobacco industry is no exception. With the resurgence of interest in cigar smoking in the early to mid-1990s, consumers began to take interest in unique options in their cigar-smoking experience. And manufacturers have listened, introducing unique sizes, packaging, flavors and shapes to meet consumers’ demands. But industry experts agree that it is the introduction of flavored cigars that has really held the attention of consumers and made this industry segment flourish.
In the beginning
Industry experts say that smokers enjoy trying new tastes in their favorite cigars. According to Heather L. Phillips, president and CEO of Heavenly Cigar Company, Naples, Fla., “flavored cigars in some aspect have been around for sometime; if you include some of the mass machine-made products, they’ve been around 20 years.”
However, around 1994 to1996 a more premier type of flavored cigar started to be desired by the consumers who wanted to smoke cigars, but couldn’t handle the robust flavor.
“Flavored cigars have been in the market for a long time but did not begin to gain in popularity until the cigar boom,” said Oliver Nivaud, director of manufacturing at Las Vegas-based Sweet Daddies. “When the craze hit, there were a lot of people who wanted to smoke a cigar but were not ready for anything overpowering, so they would ask for something ‘sweet.’”
Sweet Daddies launched at the 2002 Retail Tobacco Dealers of America trade show with a strong response from retailers.
“We distinguished ourselves in the marketplace with our packaging and our tag line, ‘Who’s Your Daddy?’” Nivaud said. “We support our retailer with more than just cigars, too.”
Sweet Daddies has an entire line of t-shirts, tank tops, baby dolls, shooters, martini shakers and glasses, items that retailers can use as promotions or as added sales.
“At Heavenly Cigar Company, we’ve experienced tremendous growth with our line of flavored cigars in the last five years,” Phillips said. “The continued growth is obviously pleasing both for us and our retailers. The consumers are crazy for flavors, but demand a quality cigar as well as one fairly priced, so our product delivers all three and the result is overwhelmingly rewarding for both the retailer and consumer. Because of such a strong response by customers, the retailers are dedicating full areas in their humidor to flavored products.”
The popularity of flavored cigars has led to a growth in single cigar sales said Jane Green, vice president of marketing at Swisher International, Jacksonville, Fla. In fact, John Middleton Inc., King of Prussia, Pa., recently completed a market study that shows that flavored cigars are not only driving the market and increasing in sales, but traditional cigar sales are also growing.
“It’s not like traditional cigars have stopped growing,” said John Giese, national sales director at John Middleton. “But I do see that flavored cigars are driving interest and enthusiasm for the marketplace.”
Making waves
So what’s new in the flavored cigar market? Obviously, the introduction of new flavors is paramount for this segment of the tobacco market.
“Customers are looking for more sizes, particularly mini-cigars and innovative flavoring, such as vanilla with a twist of something else,” Phillips said. “They’re looking for a cigar that promises what it delivers, although there are crafty marketing efforts and nifty combinations, if the cigar doesn’t’ deliver what it says, then their experience is less than positive.”
Heavenly Cigar Company has offered several twists on flavors such as Cupid’s Cherry Cream, which is a vanilla base with a sweet cherry finish.
“I took the conservative flavors and did something a little different,” Phillips said. “For example, with Heather’s Honey Nut, there is pure honey sweetness along with a percentage of almond and hazelnut. We have several flavors that are combined this way, mostly unique in flavoring and processing.”
Green said that manufacturers have created a wide variety of choices, and a few have emerged as favorites.
“Swisher has done well with strawberry and peach flavors,” Green said. “Our unique Icy Mint Cigars and Tequila Cigars have also drawn a following.”
Giese said that the number of flavors introduced over the last five years has left wholesalers wondering which ones they should handle and retailers wondering which ones they should carry in their stores.
“It is almost like a flavor-of-the-month club,” Giese said. “Every month they come out with a different flavor.”
As a result, John Middleton began offering a unique twist on the traditional flavored cigar. “Our cigars are pipe-tobacco cigars, which are very flavorful,” Giese said.
Several years ago, the company bought pipe tobacco from R.J. Reynolds Tobacco Co. and married their Black & Mild blend with an apple pipe tobacco blend in the filler. Essentially, the aroma and taste comes from the filler.
“Our goal is to expand upon the idea of a pipe-tobacco cigar while using the powerful brand name of Black & Mild,” Giese said.
Indeed. The company has extended the Black & Mild family of cigars to include six members. These include Black & Mild Untipped, Black & Mild Apple, Black & Mild Vanilla, and Black & Mild Mild. Most recently, the company introduced Black & Mild Fast Break, a shorter version of Black & Mild for those smokers who only have a 15-minute smoke break and want to smoke a cigar.
Sweet Daddies recently began distributing its Sweet Daddies Tubes. “This type of packaging allows the retail to have a small footprint on their counter or in their humidor,” Nivaud said.
As for consumers, new packaging and new flavors are great, but, as with everything, people want consistency in a product.
“We have worked hard to maintain our quality and we have always stood behind our product,” Nivaud said. “If you cannot provide a consistent flavor down to the last ash, you need to go back the blueprint.”
What the future holds
Industry experts agree: the future looks great for the flavored market.
“I believe the future holds continued growth and new exciting blends for the market,” Phillips said. “I’ve seen many unique additions to this market and feel there are many more to come. In and amongst hot trends, companies come and go, escalate and decline, and so on, but that’s the nature of business.”
For retailers looking to enhance their share of this unique market segment, Nivaud advised that they have an open mind when it comes to flavored cigars. “These are no longer the taboo cigars in the old tobacco shops,” he said.
Green of Swisher International says that smokers like to try two or three different flavors, along with their favorite 5-pack.
“Retailers who stock a nice variety of singles, along with a good selection of 5-packs, will likely see their sales increases in the total cigar category,” she said.
Also, the importance of displaying flavored cigars properly is paramount. “If it is a non-self-serve area, put them on the back bar where the consumer see it,” Giese suggested. “We prefer it to be self-serve because consumers want to touch and feel this type of product.”
Also having the proper SKU count and the right type of SKUs is imperative.
“We’ve found that in the marketplace, 30 to 35 SKUs is the proper amount. But you also have to have ones that meet the interests of your demographic,” Giese said.
John Middleton purchases AC Nielsen data for specific regions of the country, as well as appropriate city data. “With this data you can come up with a good product mix that should appeal to the consumers within your region,” Giese said. “In the end, if your products are properly displayed, with proper SKU mix in your store, we see the flavored cigar market growing.”
Experts agree that retailers who “showcase” premium flavored lines in a clearly marked display area, enjoy strong flavored cigar sales.
“Clearly organizing and defining your flavored products will help your customers get a better feel for what they’re looking for,” Phillips said. “Offer these products, even to those who don’t smoke flavors. If you don’t offer or ‘make the sale’ you’ll both never know if they would have really liked it or not. And more often than not, people are pleasantly surprised and start to enjoy a cigar with flavoring among their regular smoking habits.” |
