With the tobacco display restrictions that are due to come into force in England in larger shops from April next year, and being proposed in Scotland, Wales and Northern Ireland, Imperial Tobacco is determined to ensure that the smaller stores, and the wholesalers who supply them, can make the most of this significant opportunity.
The smaller stores in England have a three-year window before the display restrictions cover them too, and Patrick Toms, head of distributive and vending at Imperial Tobacco, says he wants to use the close partnership between his company and the wholesalers to influence and educate retailers about best practices and drive up retail standards. The sales team within Imperial Tobacco dedicated to working solely on the distributive channel, which includes account managers, multiple account executives and business development executive, will be working closely with their contacts in depots and at head office to offer any support and guidance that may be needed.
Availability will be a key issue if retailers are to meet this increased demand and Toms says cash and carry depots need to lead by example by ensuring they have availability of all the major brands and especially new launches.
Service will be another focus for Imperial Tobacco looking at how well people in depot are trained and their understanding of the category. Toms says: “There are some amazing staff with great knowledge of the category, and we want to help cash and carries to develop their staff and bring them all up to same high standard across the board.”
He says they should be able to talk about new brands, the display restrictions and other legislation affecting the category, and Imperial Tobacco has the expertise to help with developing staff and is also willing to look at incentivising them on issues such as availability.
The tobacco category is massive, with around 12 million adult smokers spending about pound;14bn a year, and about 60% of total UK cigarette sales go through the distributive sector. But the tough economic climate, and high price increases due to hikes in duty and VAT at the last budget, are driving the ‘value seeking’ trend in the tobacco category.
Brands in the economy sector such as Windsor Blue and the JPS Silver range are growing strongly and RYO is also showing strong growth, although even here down trading is now happening more. To reflect this trend, Imperial Tobacco has brands such as Gold Leaf and Golden Virginia Yellow, and in April this year it released JPS RYO tobacco, which is now the fastest growing RYO tobacco brand.
Another pressure on the category is the threat from the illicit trade, which government estimates put at around 17% of all cigarettes consumed in the UK. With this in mind, Imperial Tobacco recently launched JPS Tobacco, for adult smokers to create their own JPS cigarettes using a cigarette making kit and accompanying cigarette makers and tubes. JPS Tobacco enables smokers to create 20 king size cigarettes for nbsp; pound;3.87 after purchasing the cigarette makers and tubes.
Toms says: “The product provides cost-conscious consumers, who may purchase tobacco from illicit tobacco traders, with an incentive to buy from legitimate retailers as JPS gives them a quality reassurance backed up by the heritage and value for which JPS is renowned.” Cigarette making kits were tried in the UK once before about 10 years ago, without success, but Toms says they are perfect for the current economic climate and trends in the tobacco market, and initial signs are very positive.
He concludes: “In 2012, Imperial Tobacco will continue to build on our market leading portfolio. We are working on a significant number of exciting innovations and next year looks like it will be another successful year for all those operating within tobacco category.
“We constantly monitor the market to ensure the on-going relevance of our portfolio and we have a renowned track record for providing wholesalers and retailers with significant opportunities by delivering innovative and ultimately successful new brands and promotions.”