Paul Hill finds out how Scandinavian Tobacco Group and Bestway are working together in the cigar category within the wholesale channel
Cigars have always proven to be a profitable category for the wholesale channel. Scandinavian Tobacco Group (STG) was recently on hand at Bestway’s Park Royal depot to offer advice and support to the wholesaler to make sure it is still maximising its sales throughout this unique period in history.
Overall, the cigar category is worth just under £195m in annual sales and this accounts for 260 million cigar sticks being sold in the UK in the past year. With a market share of just under 55%, STG is the biggest player in this market, with ownership of five of the top 10 performing brands.
This includes its Signature range, which accounts for nearly 36% of all cigars sold in the UK, led by Signature Blue, which is the UK’s favourite cigar. The Signature Filter Cigarillo also made its debut into the wholesale channel earlier this year and includes an acetate filter, which contains a peppermint capsule under a lasered marker.
STG’s UK country director, Alastair Williams, recently met Richard Booth, Bestway’s director of trading for category management & tobacco, to discuss these products as well as recent developments.
“Wholesalers have been working unbelievably hard in very challenging circumstances this year, and for that we are all very grateful. They’ve had to be agile in responding to fluctuating demand and navigating some challenging supply chain issues,” said Williams.
STG HAS A 55% MARKET SHARE OF THE UK CIGAR CATEGORY
“In doing so, they have succeeded in making sure sales have remained stable and profitable for the convenience sector. For our part, we have continued to offer them promotional support and advice in order to alleviate pressure on staff and remain in regular contact to maintain continuity of supply as well as up-to-date advice on adult cigar consumers’ smoking habits,” he explained.
“We’re very pleased to have STG as our guest here at Bestway,” added Booth. “Cigars are an important sub-category within tobacco for Bestway and offer more profitability for us and our customers.
“STG is the specialist and we enjoy a close working relationship with them. They keep us well-informed on trends and what’s going on in the category. Brands such as Signature, Moments and Henri Wintermans are key parts of our cigar offer, and very popular among our retailer customers.”
Richard Booth, trading director, Bestway Wholesale: “As we adapt to this new way of life during the pandemic, it’s likely that retailer buying habits will change and it’s great to have a company such as STG as a partner to ensure we and our customers adapt and make the most out of the category.”
Alastair Williams, country director, Scandinavian Tobacco Group UK: “Wholesalers should bear in mind that when it comes to ranging decisions, it’s worth noting that nearly 90% of all cigar sales in the UK come from the top 10 brands. It’s therefore important that they stock the right range rather than a broad range.”