2021 Tobacco Outlook
Total Tallies
The ups and downs of the many product lines within the tobacco category seem to balance out in favor of c-stores. Dollar sales in U.S. convenience stores: Latest 52-week period ending April 3, 2021
% Change vs. previous year: 52 weeks
% Change vs. previous year: latest 13 weeks
% Change vs. previous year: latest 4 weeks
Cigarette tobacco
$30.5 M
-12.6%
-19.8%
-34.3%
Cigarettes
$53.8 B
4.5%
5.1%
5.0%
Cigars
$3.6 B
13.1%
10.6%
8.1%
Pipe tobacco
$131 M
-4.1%
-12.1%
-24.6%
Shag
$7.0 M
6.8%
-6.0%
-23.5%
Smokeless tobacco
$7.4 B
8.3%
6.1%
4.5%
Tobacco combination packs
$14.2 M
35.4%
25.1%
12.5%
Electronic cigarettes
$4.0 B
7.5%
13.2%
5.9%
Subcategory
Source: Nielsen IQ: Market, Total US Conveniece data, run May 5, 2021
overall profitability in the OTP category,” said Nefferdorf. Indeed, both Nielsen and IRI calculated growth for ENDS in a year/year comparison of dollar sales — 7.5% per Nielsen and 10.5% per IRI. This growth comes despite the fact that products without premarket tobacco applications (PMTAs) had to be pulled last fall. At press time, FDA had just announced 6 million deemed new tobacco products were approved following the PMTA process. PMTA approvals/nonapprovals will hopefully provide some consistency to planograms following several years of an evolving environment of brands from startups to Big Tobacco to new technology and expanding regulations. CIGAR SUPPLY STRUGGLES TO MEET DEMAND
U.S. sales in 2019 reached $4.2 billion, representing a 562% jump from the previous year, according to Brightfield Group. Last year, CBD sales slowed, but by Q4, a rebound appeared underway. Tinctures and topicals posted the best gains, whereas gummies had minimal loss after a positive 7% showing in Q3, according to research from Management Science Associates. “CBD continues to be a steady category through the first part of 2021, led by Solari Hemp’s gummies, tinctures and six-pack offerings,” said Greene. Analysts suspect the category will make steady gains in the coming months, but don’t anticipate a return to pre-pandemic levels until next year. Then again, a national survey by Invisibly suggests there’s substantial
The cigar subcategory probably suffered the most from COVID-19 conditions because distributors strained to meet c-store orders under manufacturing slowdowns. “We did see a pinch on supply as it relates to our cigars and wraps. Supply still remains tight on these items,” noted Nefferdorf. “We work closely with the manufacturers to understand timing and potential remedies,” added Meara. In spite of that, dollar sales for cigars bumped up more than 13% for the 52 weeks ending April 4, according to Nielsen research. IRI reported similar findings at 11.5%. CONCENTRATING ON CBD
Although not derived from tobacco or containing nicotine, the cannabidiol (CBD) category has earned its place as a c-store profit producer. Since the 2018 Farm Bill authorized the sale of hemp-derived products, c-stores have built up CBD offerings. 34
CSTORE DECISIONS •
June 2021
cstoredecisions.com
