In today’s posting, we’ll revisit a previously addressed topic that continues to warrant attention as it pertains to the convenience store industry. Other Tobacco Products (OTP) as a single category is maintaining its growth in sales, and reports from retailers nationwide continue to highlight sales increases in the OTP category as we near the end of the 2011 fiscal year.
OTP is a wide-ranging category encompassing segments such as moist snuff, cigars, roll your own tobacco, pipe tobacco, and loose leaf products. As far as category performance is concerned, take a look at the bullet points below (special thanks to Swedish Match North America for their invaluable reports) to see just how OTP is shaping the convenience store industry:
About the Category
Other Tobacco Product Sales Figures
● OTP is the fastest growing category in convenience stores in both dollar sales and gross profit.
● OTP dollar sales and gross profit are growing several times faster than the rest of the store.
● Moist Snuff drives over one-half of total OTP dollars, with cigars driving 1/3rd.
● All segments of the Moist Snuff category are showing growth.
● Cigar Stick Sales continue to consolidate into the top 4 (White Grape, Wine, Strawberry, and Peach), pushing some older flavors out. Important to note, the 4 top-selling flavors together account for 84% of flavored cigar sticks sales.
● Foil is becoming the packaging of choice for cigar consumers.
About the OTP Shopper
● OTP shoppers continue to rank #1 in trips-per-month to convenience stores.
● OTP shoppers visit c-stores almost twice as often as the average convenience shopper.
● OTP shoppers visit the convenience channel 96% more frequently than the average shopper, spend more money per visit, and generate 2.6 times the annual sales.
● The OTP shopper’s basket is about $2 higher than the average convenience basket.
Here’s the most fascinating stat of all: 13% of c-stores do not carry ANY single cigar items. Single Cigars grew +20% during the latest 26 weeks, yet not one single cigar item has attained greater than 83% distribution in c-stores. Furthermore, the best-selling single cigar item (Swisher Cigarillo) is only in 66% of c-stores (national ranking shown below)
Top Selling Single Cigar Items
For you c-store owners looking to grow sales in 2012, you have a tremendous opportunity to realize incremental cigar growth by ensuring higher distribution for top single cigar items.
Allen Brothers Advice: Contact your sales representative to learn how you can add rings to your register through OTP sales in 2012!
Happy Selling!