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Also, don t neglect your fixtures and displays! Newer models offer lighting, storage and can truly highlight and sell your products more effectively! By utilizing these merchandising strategies, your OTP category will perform better and bring increased profits to your c-store. It s important to keep an eye on these evolving trends and make adjustments to your offering, as necessary. Moving the Needle in OTP Technology and changing societal expectations are both affecting the OTP category. Bugler and Good Times should be part of your offering.
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Stock what sells! RYO/MYO Accessories are also down slightly, but similar to RYO Tobacco, a couple of brands are growing and outpacing the others. Note that Bugler has the bulk of the segment share at 46%, and RYO customers are fiercely loyal if you don t have their preferred brand, they will go somewhere else. RYO Tobacco is down -6% overall, but Bugler and Peter Stokkebye are growing at +2.3% and +45%, respectively. These brands are up a collective +3% and are responsible for 3% of the total segment sales. Filtered Cigars have seen a slight decline of %, but a few national brands such as Cheyenne, Talon and Djarum are bucking that trend. MST Pouches are still growing, and while they account for only 7% of segment volume, they are responsible for 63% of the growth. Category Insights 5ģ Other OTP Segments Moist Snuff unit and dollar growth is flat, with Premium Loose MST s declines being a significant drag on the segment. 6% Altria 35% Vuse 5% JUUL 4% Blu 2% Logic 8% Others Vapor Dollar Share = All 5 Channels week ending 5/20/7. New products such as Zyn from Swedish Match offer the nicotine consumers crave, without the tobacco. The products are more discreet/less invasive than traditional nicotine products such as Cigarettes or Moist Snuff. George Main, VP of Merchandising, Eby-Brown Total Cigars Single Sticks Foil Pouches Packs Cigar Stick & Dollar Sales % Change vs Last Year 8.9% 9.5% 9.7% 9.3% 5.0% 4.0% -9.9% -.7% Dollars Sticks Source: Nielsen Large Convenience Chain Sample (20 chains, ~4,000 stores) 24 weeks ending Market Consolidation 92% of the category is serviced by the Top 5 Vape Companies E-Cigs/Vape: Societal changes support the growth in E-Cigs/Vape: Anti-smoking laws are partly responsible for the growth in E-cigs/Vape many consumers who can t smoke a traditional Cigarette in the workplace will now use these as alternative products. The 2-stick, foil packs have really taken off, and the freshness advantages you get from it are great! The retailer enjoys an extended shelf life and less waste, while the consumer enjoys a much fresher product. Aggressive, pre-priced offers the 2 for $.99 offer gives the customer 2 cigars in a foil pouch a great price point with a fresh product. In addition, unflavored cigars are growing in popularity. Flavors there are many flavors available, with more being added continuously. New product launches such as the Optimo from Swisher offer a premium product at a reasonable price. Natural leaf demand consumers love the premium aspect of natural leaf cigars. They offer increased shelf life, less waste and enhanced product freshness. Growth Drivers: Cigars & E-Cigs/Vape Cigars: Several factors are driving the growth OTP is experiencing in Cigars: Foil pouches this pack type has been a game-changer for cigars. Innovation in pack type and product attributes are driving growth/change in consumer preferences. Many consumers utilize more than one product type, depending on time of day and location. 24 Weeks Units % Change Total OTP MST E-Cigs Little Cigars Cigars x Littles Snus -.0% 7.5% 0.2% 26.3% 2.7%.6% Chew -4.6% Source: Nielsen Large Convenience Chain Sample (20 chains, ~4,000 stores) 24 weeks ending Category InsightsĢ Today s Consumer Has Lots of Product Choices More nicotine products are available for consumers to choose from: Cigars, Moist Snuff, E-Cigs/ Vape, Little Cigars, Snus, Loose Leaf, RYO/Pipe and others. On the unit growth side of the equation, we again see powerful growth in Cigars and E-Cigs/Vape an excellent indicator of organic growth and true consumer demand. Individually, E-Cigs/Vape grew by +45% and Cigars grew +%. When combined, these two product segments comprise only 39% of total OTP dollar sales, but they are responsible for 78% of the OTP dollar growth. However, even more substantial is that the Eby-Brown market is actually outpacing those numbers with +2% growth in OTP! The exceptional dollar growth of OTP in the convenience channel is primarily being driven by Cigars and E-Cig/Vape products. The OTP category is posting impressive numbers - dollars are up +8.4% with units also up +7.5%, according to Nielsen. George Main, VP of Merchandising, Eby-Brown OTP Experiencing Impressive Growth Both dollars and unit sales are up versus last YTD. 1 OTHER TOBACCO PRODUCTS We re having a great year in OTP strong growth in both dollars and units is an excellent indicator of good things to come.