Cigars see a seasonal spike in December as occasional smokers give themselves a festive treat. Asian Trader finds out how independent retailers can make the most of the opportunity.

Tobacco continues to be the biggest FMCG category, with the total UK tobacco market currently worth £14.4bn, and the RMC market accounting for £11.6 billion (Nielsen).
The total value of tobacco in independents and symbols totalled £6.2 billion in the last year, with the cigarette market accounting for £5 billion (Nielsen).
According to Nielsen data, the total value of the cigar market in the UK is worth approximately £202 million.
Miniatures is the leading cigar category and growing in share terms, with a current market share of 73.7%, Nielsen data reveals.
Each year, cigar sales follow a very similar seasonal pattern, with a spike in volume in December.
In December 2017, cigar sales value increased by 10.5%versus the prior month (Nielsen), so it is important for retailers to stock up before Christmas.
JTI is the second biggest cigar manufacturer in the UK, with a market share of 23.1%. Its flagship cigar brand Hamlet, the No.2 brand, holds a 22.1% share of the cigar market according to Nielsen.
In terms of readymade cigarettes, there are two clear trends in the current tobacco market – the growth of the capsule segment which is now responsible for 15.3% of total cigarette sales in the UK (Nielsen), and the growing value segment, as consumers seek out value for money products.
In line with this, JTI extended its capsule range with the addition of three new value products; Sterling Dual Superkings 20, Sterling Dual Double Capsule King Size 20 and B&H Blue Dual Superkings 20.
As part of the trend towards value in the total tobacco market, the RYO category has increased 7.7%viii year on year as existing adult smokers seek out these value for money products (Nielsen). The RYO category now generates sales worth over £2.6 billion according to Nielsen.
With over 6.5 million kilograms of rolling tobacco sold in the UK each year (Nielsen), there is significant opportunity for independent retailers to maximise sales by stocking up on value RYO products, such as JTI’s Sterling Rolling Tobacco, and the recently launched Kensitas Club RYO offering.
“Communication with customers is an area where independent retailers have an opportunity to maximise sales,” comments Ross Hennessy, Head of Sales at JTI UK.
“Retailers should also use regular conversations with their regular existing adult smoker customers to adapt their ranges and maximise sales. This flexibility, depth of category knowledge and time to speak with customers should be used by convenience retailers as a significant advantage and opportunity over nearby multiples.”
Retailers should ensure their gantries are easy to navigate, Hennessy suggests. Multiple facings of best sellers, such as Sterling Dual and Amber Leaf will help maintain the space and ensure customer needs are met.
JTI recommends ensuring tobacco is in a visible, easy to access location, to maintain best levels of service and avoid loss of custom.
“Price is a key factor for existing adult smokers when choosing where to shop for tobacco products, so retailers should look to remain competitive by selling at RRP or below,” Hennessy comments.
In today’s tobacco environment it is crucial for retailers to be knowledgeable about their tobacco portfolio, including new products and best sellers, so they can respond to consumers’ questions.
Online tools such as JTI Advance ( can provide regular training to suit the busy schedule of retailers.
JTI’s extensive UK sales force is also fully trained to give retailers advice on their tobacco range and are constantly upskilled, enabling them to give retailers the latest support to help them maximise the profit opportunity the category holds.
“One year in, the latest data shows that there has been no significant impact on tobacco sales in the UK as a result of EUTPD2,” says Hennessy. “We have found that those retailers who prepared well were the best equipped to deal with the legislative changes and have seen the least disruption to their business. Those who continue to invest in the category will reap the rewards and JTI is equally continuing to invest in product innovation and support for retailers to help them maximise tobacco profits.”
Seasonal sales
The cigar market in the UK is reporting a minor increase of 0.8% overall, with the miniatures and medium/large cigar segments reporting an increase of 4.5% and 5.6% respectively (IRI).
Miniature cigars continue to dominate the market, accounting for an impressive 72.6% of the total cigar volume and £103.5m in value sales, according to IRI.
Within this segment, STG UK’s portfolio of miniature brands contributes 70% of all value sales.
This includes Signature Blue (previously Café Crème Blue) (30.1%), Moments Blue (17.7%) and Signature (previously Café Crème) (11.9%) which account for three of the top four brands within miniatures, IRI data reveals.
This means that STG UK’s miniature brands collectively represent £72m in value sales over the last 12 months.
In fact, when looking specifically at value for money miniature cigar brands, Moments Blue is bigger than the total of all the other brands together, at a value of £14.6m (IRI), making it an important must stock for any tobacco stockists.
Within the medium/large cigar segment, which is also in growth (+5.6%), Henri Wintermans Half Corona holds the top position as the UK’s favourite medium/large cigar brand, reporting an increase of 2% to 73.4% market share and value sales increases to £14.6m (IRI).
“This positive performance could, in part, be attributed to the incredible summer weather we’ve experienced in the UK this year and with a seasonal rise in cigar sales expected over Christmas, this growth may well continue,” comments Jens Christiansen, Head of Marketing & Public Affairs at Scandinavian Tobacco Group UK (STG UK). “As a result, it’s a must stock for any tobacco stockists looking to capitalise on the sales opportunities available through larger, celebratory cigars at Christmas.”
Overall, the top 10 cigar brands account for 89% of the total cigar sales and 85% (£168m) of value sales (IRI), highlighting just how important it is for retailers to ensure they’re stocking the leading brands to take advantage of the sales and strong profit margins available within the cigar category.
STG UK brands account for 5 of the Top 10 brands, including Signature Blue (previously Café Crème Blue), the No.1 cigar brand in the UK, according to IRI.
In line with its leading category position, STG UK is responsible for the lion’s share of the market at 53.3% and is experiencing growth of 1.4% (IRI).
“In the lead up to Christmas, when everyone’s in a festive, celebratory mood, sales of cigars tend to increase,” adds Christiansen.
In fact, last December, sales of cigars increased by 7% in comparison to the previous month, with larger cigars from the medium/large cigars segment, such as Henri Wintermans Half Corona, reporting a 14% increase (IRI).
Given the growth being seen in the medium/large segment at present, STG strongly recommends stocking a strong range of larger cigars to make the most of this seasonal sales rise, such as Henri Wintermans Half Corona, which holds the position of the No.1 selling cigar in the medium/large segment and is also the 6th best-selling cigar overall in terms of value sales.
“However, it’s important that retailers make sure they’re fully stocked with a selection of other cigars at different price points, including leading brands from each segment, to ensure they can cater for all shopper tastes and needs,” Christiansen suggests. “While retailers should be extra vigilant about staying stocked up and prepared for the seasonal cigar sales opportunity, we would always recommend maintaining stock levels throughout the year to avoid missing out on sales.”
Earlier this year, STG commissioned its own research into shopper purchasing habits of tobacco and the results showed that most smokers are actually very open to trying to cigars and willing to consider switching given the right factors.
The research findings highlighted that 59% of male smokers who don’t normally smoke cigars would be willing to buy them.
While 32% of traditionally non-cigar smoking males said they would buy cigars for their taste, and 27% would if they were cheaper than cigarettes.
The research also showed 79% of smokers who regularly visit a convenience store would try an alternative tobacco product, such as cigars, if it was recommended by store staff.
These insights should help to dispel any misconceptions that cigarette smokers are not open to smoking or purchasing cigars and instead highlight that they are actually very open to recommendations from convenience store staff.
“To make the most of this opportunity, retailers should invest in upskilling both themselves and their staff to grow their understanding on the different cigars available in each segment, and what type of consumer they are most suited for,” adds Christiansen. “In doing so, retailers will be able to offer customers the all-important guidance they need and desire, to help them make informed choices on what cigar would be right for them.”
When one combines these insights with the fact that cigars have double the profit margin of cigarettes (enabling retailers to possibly make an additional £250 profit for each consumer that switches to cigars), there is a clear chance for retailers to capitalise on this opportunity.
STG’s research shows that consumers are open to trying cigars, especially when recommended by their local retailer.
But, less than half of retailers (46%) seem to be taking advantage of this by proactively engaging with their customers.
This highlights a huge opportunity for retailers to upskill their knowledge and train their staff to help them to reap the sales rewards as a result.
“By taking time to talk to customers about their preferences and being able to offer advice on what cigars would fit their individual smoking tastes, retailers can push up their cigars sales and benefit from increased margins and higher profits,” comments Christiansen.
For example, as the leading value for money miniature cigar and No.2 overall, Moments Blue is an ideal choice for any smokers looking for a great cigar that offers a cheap out of pocket spend.
While Signature Blue (previously Café Crème Blue) provides the reassurance of being the No.1 cigar and a quality brand consumers can trust.
Henri Wintermans Half Corona on the other hand is ideal for smokers looking to celebrate with something a bit more special and is a definite must-stock for retailers over the festive period.
Having these kinds of insights at their fingertips will go a long way to help retailers to offer customers the support and advice they need.
“Retailers should also invest time into going through the gantry with the staff and talking to them about the different segments and products within the category,” says Christiansen. “This will go a long way to improve the level of service customers are receiving and help to raise profit margins.”
In terms of the core range, it’s really important for retailers to tailor their cigar range to their store and customer demographic, Christiansen believes.
“By engaging with shoppers and discussing what they’re looking for, retailers can adapt their range accordingly to ensure it meets their needs and aren’t at risk of losing out on sales to competitor stores, or using up valuable space with products that aren’t right for their store,” he adds.
Depending on space and the store demographic, STG suggests a basic cigar portfolio.
Covering the Miniatures, Panatellas, Premium and VFM segments is a good place to start.
STG also recommends Signature Original and Signature Blue (two bestselling SKUs – previously Café Crème), Moments Blue (UK’s biggest VFM brand) for Miniatures and Hamlet 5’s and Moments Panatella to cover off the Panatella / Small Cigars segment.
“I would also encourage retailers to stock Henri Wintermans Half Corona for celebratory occasions, especially at this time of year,” Christiansen says.
It’s worth remembering, cigars are exempt from the packaging restrictions which apply to many other tobacco products, so will naturally stand out on the shelf when doors are opened.
“To make the most of the opportunity this presents, don’t hide cigars away at the bottom or the top where they can’t be seen,” Christiansen adds.
“Aside from making sure they’re stocking the right brands for their store, the simplest, yet most effective piece of advice for any retailer is to stay stocked up, at all times,” Christiansen comments. “Ultimately, if a cigar smoker comes into their store and can’t find what they’re looking for, they’ll go elsewhere and may not return, so it’s crucial to maintain availability to ensure they don’t miss out.”
STG UK has announced the evolution of Café Crème, one of the world’s leading cigar brands, with the launch of its new Signature brand name.
While the cigar itself will remain wholly unchanged, the new name has been proven to resonate exceptionally well with consumers, offering them reassurance on the exceptional quality synonymous with the brand.
The new Signature brand name will be rolling out in stores from February 2019 with a phased transition to ensure high awareness amongst retailers and consumers alike.
This has included the launch of new transition packs, available now, which feature an on-pack flash highlighting that the name will soon be changing to Signature.
Each pack also includes an inlay inside the tin with additional details informing consumers of the name change and reassuring them the cigars will remain the same.
This phased transition of the new name into the market will give retailers time to prepare their customers for the arrival of Signature next year to ensure no disruption to sales of the UK’s No.1 cigar brand.
Large cigars
Large cigars tend to come to the forefront during the Christmas period – and sales of Imperial Tobacco’s large cigar brand, Castella Panatellas 5s (RRP £10.43), remain strong with over a 3%1 share of the large cigar sector (ITUK estimates).
“However, retailers shouldn’t discount the value of small cigars at this time of year either,” says Andrew Miller, Head of Field Sales at Imperial Tobacco UK.
Classic currently accounts for almost 28% of the small cigar sector, and 7% of the total cigar market as a whole (ITUK estimates).
They are available in 5s packs at £5.97 RRP or as single cigars (in 50s drums) at an RRP of £1.24 each.
Panama 6s packs (RRP £5.822) and King Edward Coronets 5s packs (RRP £5.642) are also selling well and, overall, Imperial Tobacco brands account for over 36% of all small cigar sales in the UK.
“In terms of FMC, retailers should also focus on their premium cigarettes during the Christmas period,” comments Miller.
One in five packs of cigarettes sold today still stem from the premium and sub-premium price sectors, and the enhanced margins provided by illustrious brands like Davidoff, Embassy, Regal, SUPERKINGS and Lambert & Butler Silver means they continue to be ‘must-stocks’ for retailers – particular during the festive period.
Imperial recommends retailers stock their gantries using our ‘one brand, one shelf’ technique – please contact your designated Imperial representative for more information.
While brands offering the greatest perceived value currently enjoy the largest shares of both the FMC and RYO sectors, wholesalers should also ensure they offer a wide range of products – from sub economy through to premium – to ensure they meet consumer demand, Miller suggests.
As an example, Golden Virginia is a premium tier RYO brand but commands an overall RYO market share of 22%. Likewise L&B Original Silver continues to represent over 4% of the FMC market.
“While there was an element of initial confusion among adult smokers to the new standardised packaging legislation as well as some challenges around price perception, the most recent feedback now that the market has transitioned to standardised packaging suggests consumers are gradually becoming used to, and accepting of, the new pack sizes and lack of on-pack branding,” Miller comments.
Imperial continues to support its retail partners in educating adult smokers about the legislative changes, to ensure any misunderstandings are minimal moving forwards.
Last year, Imperial released Rizla Natura in the independent channel.
It’s a whole new approach to papers and tips crafted from hemp, and designed to provide adult smokers with an authentic smoking experience.
Rizla Natura papers are available now in both Regular and King Size variants containing 50 and 32 papers. They retail for £0.27 and £0.75 per pack respectively. Meanwhile, Natura Tips retail for £0.74 for a pack of 120.