Scottish Local Retailer: Nicotine Handbook 2021

SCOTTISH LOCAL RETAILER

NICOTINE HANDBOOK 2021

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Scottish Local Retailer: Nicotine Handbook 2021

WELCOME It has been another tumultuous year for the wider nicotine category as the local retailing sector came to terms with last year’s Menthol Ban and the enormous challenged of Covid-19 – but it’s fair to say that the category remains as resilient and robust as ever.

The predicted mass migration into vaping didn’t quite materialise at the scale anticipated by many but vaping remains a very important category and there are signs of a fresh wave of growth. The arrival of RELX in the UK provides fresh momentum and is targeting significant growth in the UK. You can read all about it inside.

Meanwhile, tobacco remains an enormously important category for local retailers in terms of footfall, sales and profits. The category may be in slow decline but the last 18 months has seen it

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largely hold its ground and it is still among the most important categories in any convenience store.

Imperial Tobacco offers an in-depth guide to the category inside and it’s well worth a few minutes of your time.

Similarly, the cigar category has enjoyed a strong year or so, with plenty of grounds for optimism.

Yes, it’s much more of a niche product with a niche audience, but it tends to be a very loyal audience and it definitely offers retailers great margins, so it’s worth keeping on top of, as Scandinavian Tobacco Group (UK) highlights inside.

There are still plenty of challenges ahead but there are opportunities aplenty for retailers prepared to devote some time and effort to nicotine products in all their many guises. We hope this guide helps you stay on the right track.

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RELX targets UK growth

Chinese vaping giant, the world’s “largest independent vaping brand”, is targeting big growth in the UK and is one to watch out for in future.

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Burning ambition

Despite a thousand challenges, the tobacco category remains hugely resilient and is a massively important category for local retailers, says Imperial Tobacco.

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Cigars: the great profit driver

Cigars offer local retailers the chance to satisfy a very loyal audience while securing fantastic margins into the bargain, explains Scandinavian Tobacco Group (UK).

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Scottish Local Retailer: Nicotine Handbook 2021

RELX: THE WORLD’S LEADING VAPING BRAND COMES TO SCOTLAND RELX is the world’s leading independent vaping brand, and it’s now targeting the UK market.

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Scottish Local Retailer: Nicotine Handbook 2021

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Scottish Local Retailer: Nicotine Handbook 2021

The vaping market has settled down in the UK over the last few years thanks to a period of consolidation – but that may all be about to change once more as RELX ramps up its presence in the UK market. RELX is the world’s leading independent vaping brand, yet very few in Scotland will even have heard of the brand. That is set to change.

RELX branded products are designed at a cuttingedge research and development centre, and produced in the world’s largest e-cigarette factory.

The brand mission is to make RELX a trusted brand for adult smokers through state-of-the-art products, industry-leading technologies and scientific advances in collaboration with talented and committed people around the globe. The goal is to develop “future-forward solutions for one billion adult smokers*” and to be a truly global brand with deep local presence.

The company has bases in 10 countries and employs a team from more than 15 countries.

Founded in 2018, RELX has been a fast growing vape brand globally and is now the world’s leading independent e-cigarette brand, based on Customs worldwide export data and sales data in the Chinese market.

Using its own unique technologies, the company has developed a ‘SuperSmooth Performance’

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product that delivers for modern vaping customers.

RELX believes in finding “small but meaningful ways to design products to find the right balance of aesthetic appeal and an incredible user experience”.

This translates into a device with up to two days’ extra battery life, an in-built vibration alert to let users know they’ve been perhaps using the device more often than they had intended to and an ergonomically designed mouthpiece for maximum comfort.

All products are subject to RELX Standard quality control processes ensuring every product is of the highest quality and are produced in the world’s largest e-cigarette manufacturing facilities which adhere to GMP (Good Manufacturing Practice) certification, an internationally recognised standard which ensures every product is manufactured responsibly, and with high quality and sound production equipment.

Every product, in fact, has to pass 18 individual Quality Control tests.

Since its inception, RELX has been committed to preventing the use of e-cigarettes by minors and people who are not smokers or vapers through its ‘Guardian Program’.

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Scottish Local Retailer: Nicotine Handbook 2021

“RELX has 40,000 users in the UK and through out-of-home campaigns, social media presence, trade press and in-store activity, is helping grow that figure by the week.”

RELX International works closely with all our partners throughout the value chain to ensure that our products are not designed, marketed, or sold to underaged users. The company undertakes proactive education and training of its retailers to ensure strict compliance with this commitment.

It also adheres to its own voluntary International Marketing Guidelines which provide extensive guidance on how the company should market its products in a responsible and ethical manner.

As a company that prides itself in its commitment to youth prevention, it sets high standards of responsibility for all its trade and retail partners.

The company’s RELX Infinity device is now available in the UK in a wide choice of colours and limited edition designs with an RSP of £19.99 while its RELX Essential device is available for just £9.99.

RELX Pods are available in two variants: the premium RELX Pod Pro at £7.99 and the RELX Pod at £5.99. An array of 16 flavours is available across the tobacco, menthol, fruity and drinks and desserts segments with more flavours coming on line next month.

Despite being relatively new to the UK market, RELX has already secured listings in more than 2,000 outlets including WH Smith, VPZ, United Wholesale Scotland, off-licences, grocery and convenience. The company works together with YHJ Trading as a main distributor.

RELX has 40,000 users in the UK and through outof-home campaigns, social media presence, trade press and in-store activity, is helping grow that figure by the week. *Euromonitor, 2021

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Scottish Local Retailer: Nicotine Handbook 2021

DEMAND FOR VALUE DRIVES TOBACCO BUYING HABITS With a quarter of smokers now ‘dualists’, Imperial Tobacco advises retailers to make sure they are ready to capitalise on the trend and stock a range that meets the need of modern shoppers.

By Duncan Cunningham, UK Corporate Affairs Director at Imperial Tobacco & blu

A trend we’ve seen developing in recent years is a move towards more of a nicotine portfolio with adult smokers buying different Roll Your Own (RYO) and Factory Made Cigarettes (FMC) products to suit different occasions. In fact, our estimates suggest a quarter of consumers are now dual smokers.

While many smokers may be experimenting with different nicotine products available, shopper demand for value continues to drive buying habits in tobacco overall. This is a trend we expect to continue and grow in 2021 and beyond. To harness the sales opportunities this presents, retailers must

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be equipped with the right products and knowledge to help customers navigate the tobacco category.

RYO As a result of the continuing shift into RYO, the segment now accounts for 45% of tobacco sales with recent volume sales growing by 30%. Sales

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Stock up on Players Easy Rolling Tobacco Our cheapest Rolling Tobacco* High quality

Easy rolling blen

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30g RRP ††

£11.95

For Tobacco Traders Only. *Based on ITUK RRP as at July 2021. **For promotional dates, contact your local supplier. Based on a retailer buying at wholesale price and selling at RRP from June 2021. ††RRP: For the avoidance of doubt, retailers are free at all times to determine the selling price of their products.

Scottish Local Retailer: Nicotine Handbook 2021

in the Economy RYO segment are also rising and Imperial is well positioned to help retailers tap into this trend with more brands in the economy segment than any other manufacturer.

Our new JPS Players Easy Rolling Tobacco is an exciting new blend that offers an easier rolling experience and benefits from the brand recognition of one of the UK’s best-selling cigarette brands.

The range is available to buy in 30g and 50g and priced at £11.95* and £19.60*, including a set of quality rolling papers.

Accessories This increasing consumer shift towards RYO products also presents new sales opportunities for tobaccorelated accessories. Retailers should make sure they’re fully stocked at all times of filters, papers, lighters and other flavour-related innovations like Rizla Flavour Cards and Rizla Polar Blast Crushball filters.

Value Cigarettes While RYO is growing, FMC still accounts for the majority of tobacco sales with a 52.7% share of the market. Value for money remains a leading trend, with many seeking products offering the lowest out of pocket spend.

Our most recent FMC innovations include our new Embassy Signature range where everything

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is premium except the price. The range launched with Gold and Silver variants available to buy at just £9.50*, plus Embassy Signature Gold in packs of 100 at £47.50*. Embassy Signature Gold Superkings was next to join the line up as a straight swap for Embassy No.1 Red Superkings and the latest addition is Embassy Signature New Crush which features a unique cooling sensation filter.

Education Key Ensuring staff understand the different segments and respective products is arguably more important in tobacco than any other category. Shoppers have been largely reliant on the knowledge of staff ever since the display ban. Most smokers are brand loyal so many will know what they want to buy when they walk into the store. However, if their product of choice is out of stock, it can be quite an intimidating process choosing an alternative.

Retailers need to ensure staff know what products are stocked and where they’re positioned on the gantry. If they can be armed with advice on what solutions they should offer if a product does go out of stock, this will go a long way to helping retain customers. It’s also crucial to make sure stock levels are maintained at all times, especially top sellers.

*Retailers are free at all times to determine the selling price of their products.

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Scottish Local Retailer: Nicotine Handbook 2021

CIGARS:

THE GREAT PROFIT DRIVER Cigars offer a fantastic profit opportunity in the tobacco category and there’s plenty of sales growth to aim for, says Scandinavian Tobacco Group UK.

By Alastair Williams, Country Director at Scandinavian Tobacco Group UK (STG UK)

Cigars are an essential part of your tobacco gantry and a great driver of profit so ensure you are stocking the right products to get your tills ringing!

Cigar performance in Scotland is pretty flat, showing a very slight volume decline of 0.2% in the last 12 weeks to 4.69 million cigars, but the retail sales value of the category increasing by 5.2% in the same period [IRI, Mar 2021]. It’s miniatures which dominate the market, accounting for nearly three-quarters of all sales. Scandinavian Tobacco is the main player, responsible for over 57% of cigars sold, and we also have the top two brands in Scotland, with Signature Blue and Moments Blue.

When it comes to traditional cigars, I want to flag a UK-wide trend which isn’t being reflected in Scotland – the growth of the medium/large cigar category, which is up 23.4% in value and 17.4% in volume in the last 12 months. This is being led by our Henri Wintermans Half Corona, whose sales value has risen by over 25% in value terms. This is not being seen north of the border and could be a good opportunity for Scottish retailers.

Many of us are looking forward to ‘normal life’ resuming, so for some adult smokers that may well include trading up to a larger format cigar, so stock up and don’t miss out on those additional sales.

Secondly, the last 18 months has seen the emergence of cigarillos, which have proved popular, due to their flavour profile, convenience and low price point.

The cigarillo segment is already worth over £64m a year and our Signature Action filter cigarillo is growing steadily in popularity. It’s currently on promotion, offering the lowest price in the segment with an RSP of just £3.99 for a pack of 10.

Finally, value has been a consistent trend in Cigars for some time, is evidenced by the success of our Moments Blue brand, which offers a quality smoke at a low price, and is now the second best-selling miniature cigar brand in both Scotland and the UK as a whole, after Signature Blue.

Retailers need to ensure they are stocking the right brands to meet consumer demand. But let’s not forget it is miniatures which are responsible for nearly three quarters of all cigars sales, so ignore the top brands like Signature at your peril! In terms of ranging, it’s more important to stock the right range rather than a broad range. The top 10 cigar brands account for nearly 90% of sales. And as cigars are exempt from the plain packaging legislation, we recommend retailers stock them on the middle shelf of the gantry where they are visible.

Source: All figures IRI May 2021, unless otherwise stated.

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OUT WITH THE OLD

UK’S NO.1

AROMATIC CIGAR

IN WITH THE NEW Signature Red Filter will soon be introducing The New Pack New pocket friendly size

New pocket friendly price

RRP £6.36

RRP £5.79

OLD PRICE

NEW PRICE

Data source for number one aromatic cigar statement: IRI MarketPlace. Total market. Market Share. Time period: w/e 21-02-2021