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LAS VEGAS -- For a preview of the next hot tobacco products to hit convenience store shelves, the place to be last week was the Tobacco Plus Expo here.
The Expo, which bills itself as the largest tobacco-focused show in the U.S., drew owners and operators representing the nation's approximately 12,000 tobacco outlets. The show floor featured more than 180 exhibitors with a wide range of products, from the traditional new flavors and sizes of cigarettes, cigars and smokeless tobacco to myriad specialty items and accessories including hookahs, glass pipes, humidors, cigarette cases, cigar cutters, candles and incense.
The event was kicked off Wednesday evening by the NATO (National Association of Tobacco Outlets) Awards Dinner, followed the next morning by an educational program headlined by Convenience Store News Editor-in-Chief Don Longo and NATO President Andy Kerstein.
In the first presentation, Longo teamed up with Mike Kirkwood, executive vice president, Tobacco Outlet Magazine, to provide attendees with a comparison of the convenience store and tobacco outlet channels. Longo, citing preliminary data from CSNews not-yet-released 2008 Industry Report, spoke about how the two channels complement one another. "Tobacco outlets are often the place where the c-store industry's next hot products are tested and where consumer education is conducted and demand created," said Longo. C-stores don't have the space or the trained personnel to introduce many of these new tobacco products and accessories to their customers, he noted.
Longo also painted the picture of a category under siege by government taxation and regulation. He pointed out that in 2007, for the first time, foodservice moved ahead of cigarettes in per store gross margin dollar contribution. However, on the bright side, he added that OTP (other tobacco products) continued to be one of the bright spots in an otherwise difficult year for c-stores.
Kirkwood provided data from a study conducted by his magazine. The study reinforced the differences between c-stores and tobacco outlets, which generate a much greater percentage of their business from premium cigars and a host of tobacco accessories.
Kerstein of NATO moderated a session on accessories with two dealers, Kevin Paige of Butthead's Tobacco Emporium in western Connecticut, and Frank Armstrong of Blue Ridge Tobacco, with stores in North Carolina and Virginia, and one accessories distributor, Jeff Abel of Mitchell Thomas Trading Co., of Carrollton, Texas.
The panelists stressed the need to carry a wide assortment of accessories to let their customers know they are in the business. Some of the hottest-selling accessories cited by the dealers were humidors, lighters, cigar cutters, odor neutralizers (candles and incense), crystals that keep cigars fresh, and cigarette cases. Armstrong added that his stores have also had success with novelty gift cards, while Paige said his company has increased its loose tobacco sales by being very aggressive with in-store roll-your-own demonstrations.
Abel underlined the importance of keeping the accessories mix up-to-date and fresh. "A few years ago, ashtrays were the hottest thing for the holidays, but last year no one bought an ashtray. Now, hookahs are very hot," he said. "It's like the fashion business. It's very difficult to predict. That's why you have to keep refreshing your assortment."
Among the new products introduced at the show were these award winners:
-- Most innovative concept award to Runyan America for its V-8 E-cigarette, a nicotine delivery system that simulates smoking but releases no secondary smoke.
-- Best packaging and design award to Davidoff cigarettes from Commonwealth Brands.
-- Most unique flavored tobacco award to Swedish Match for its White Grape White Owl Blunts.