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LAS VEGAS — The National Association of Tobacco Outlets (NATO) held its fifth-annual trade show last week in Las Vegas. The 2016 NATO Show was also the last, as the association sharpens its focus on legislative and regulatory issues across the United States, but the event was chock full of insights, tidbits and product information for all tobacco retailers, including convenience stores.
Super Premium, Super Power
According to Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities LLC, the numbers continue to highlight the strength of Reynolds American Inc.'s Natural American Spirit (NAS) brand in the super premium cigarette segment. In the firm's Tobacco Talk surveys, retailers indicate they are anticipating The Altria Group Inc. and its operating company Philip Morris USA will enter the segment, either through "a tucked-in acquisition" or organically. According to Herzog, NAS is blazing a trail and Altria is taking notice.
Vaping for the Ages
Management Science Associates Inc. (MSA) took the pulse of vape shop owners and found that e-vapor products are not just for millennials. Don Burke, senior vice president, shared the results of the MSA survey of vape shop owners, which revealed that 88 percent of owners said consumers aged 21 to 30 are important to their business, and 92 percent said 31-to 40-year-olds are important. However, the percentages do not fall off as age increases. In fact, 53 percent of vape shop owners said consumers older than age 60 are important to their business. "It really speaks to the strength of the category," Burke noted.
You Know Best
Everyone has an opinion — some with facts and figures to back them up — on how to manage the e-vapor segment. But Chris Beaulier, director of retail operations for Cigaret Shopper in Brewer, Maine, said only the operator can know the right answer for their business. Whether they're the owner of a convenience store, tobacco outlet or vape shop, a retailer needs to do their own homework. "Research for future hot products, but at the same time don't fall in love with your inventory," he said, adding that retailers still need to offer traditional cigalikes because there are still customers looking for them.
Redefining Dual Use
When you talk dual use in the tobacco category, many people think of adult tobacco consumers switching between combustible cigarettes and electronic cigarettes, depending on the occasion. Yet another form of dual use is emerging in the e-vapor category. As Gal Cohen, head of scientific and regulatory affairs at PAX Labs Inc., explained, the company's JUUL presents an opportunity for vapers to vape in situations where using the larger mods/tanks are not possible — like in travel. JUUL has become a crossover product, available in roughly 11,000 convenience stores and 10 percent of all vape shops in the United States, reported Marty Young, director of strategic accounts at PAX Labs.
Meeting Barriers Head On
Boulder International Inc. has been in the market with its Aspen Air and Aspen Slim vapor products. Now, the company is ready to take the wrappers off its latest vapor product: the Boulder Rock vapor pen. The product aims to address two challenges that the e-vapor category faces in the convenience channel: ease and speed of transaction, and price point. The Rock has only two moving parts — making it a simpler vapor product for store associates to educate consumers about — and it has an attractive price for c-store shoppers, the company noted. The Rock will be hitting the channel in June.
The 2016 NATO Show took place April 19-21 at Paris Las Vegas.