The humble cigarillo is driving cigar sales, fuelling footfall and propelling profit.
The total UK cigar category today is worth £318.8m in annual sales, a double-digit value increase of 10.8% versus the same time last year [IRI MarketPlace, value sales, w/e 07-07-2024].
This positive picture is largely down to the performance of cigarillos, which have enjoyed huge growth over the last four years, observes Scandinavian Tobacco Group (STG) UK. Growth is even more pronounced in Scotland where cigar sales are worth £28.9m, which is a value increase of 11.8% versus the same time last year [IRI MarketPlace, w/e 04-08-2024]. In volume terms, cigar sales are up 4.5% [ibid]. “This [growth] is down to the performance of cigarillos, as this segment is up 19.2% in volume and 34.4% in value, and now accounts for an impressive 58.6% of all cigar sales in Scotland [ibid],” says Prianka Jhingan, Head of Marketing at STG UK. “Our Signature Action cigarillo brand is now the fifth-bestselling cigar in Scotland in volume terms.”
A vital part of the tobacco mix
Jhingan highlights exactly why cigars are a crucial segment within a shop’s tobacco offer. “Whilst cigars may not match the sales volumes of cigarettes or RYO tobacco, they remain an important part of the tobacco category for convenience retailers because they drive footfall in-store and particularly as a driver of profit in tills, as they typically offer up to three times the margin that cigarettes do,” she says. “For example, our Moments Blue brand offers up to 18% margin when sold at its RRP, and that’s not many tobacco brands that say that.”
It’s hard to believe that cigarillos have become a power player when you consider that the category barely existed four or five years ago. Sales are now worth over £137m and they account for more than half of all cigars sold in volume terms [IRI MarketPlace, w/e 07-07-2024].
Cigarillos are small, often menthol flavoured, cigars. They are shorter, usually about three to four inches long, and narrower than traditional cigars and typically take less time to smoke, which can often appeal to adult smokers, notes Jhingan. “Our Signature Action cigarillo brand is currently the fastest-growing cigar brand, with sales up by over 44% in value terms since the same time last year,” she claims.
“But cigarillos are not the only cigar segment showing a positive story, as I’m also pleased to report that both the miniature and medium/large segments are also currently showing some small value growth too.
“Our Signature Blue miniature cigar brand remains the bestselling traditional cigar and is therefore a must stock for any tobacco retailer, while our Henri Wintermans Half Corona is easily the bestselling cigar in the medium/large segment.”
Flavour behaviour
Retailers who like to keep their finger on the pulse may be interested to know that demand for flavoured cigars is picking up pace. “Whilst perhaps not as prevalent as elsewhere in Europe, flavoured cigars are growing steadily in popularity here in the UK and this is worth calling out to retailers,” says Jhingan. “Obviously, menthol cigarillos have exploded in popularity over the last few years within the cigarillo segment, but it’s not the only flavour of choice. Our Signature Red Filter brand is currently the UK’s best-selling aromatic filter cigar and whose smooth taste and vanilla flavour proves consistently popular with those adult smokers who enjoy an aromatic cigar. And on this subject of flavours, watch this space for some exciting news from us early next year!”
There’s a big chance to sell more cigars this Winter, says Prianka Jhingan, Head of Marketing at STG UK
“Retailers won’t need me to tell them that in the run-up to Christmas cigar sales go up, so it’s really important for them to get their range right so they can take advantage of those extra sales opportunities. It tends to be larger cigars that people will gravitate towards as a bit of a Christmas treat when they are in celebratory mood and typically have more time to enjoy it. Make sure you have brands like our Henri Wintermans Half Corona in stock as it is the UK’s bestselling medium/large cigar, and a real festive favourite.”
