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Capturing Value in the New, Emerging World of Tobacco
Lou Maiellano, President of TAZ Marketing & Consulting Group, lit the room on fire with his candid and futuristic look at tobacco. He said that although cigarette consumption is declining, a host of other products are growing rapidly in the convenience channel.
After a brief look at tobacco past, including higher costs, reduction in RDA income, fixture costs, lack of return procedures, and an increased need to be competitive in pricing, Maiellano painted a picture of tobacco present. The current state of tobacco is characterized by a growing OTP category, space management issues, limited point-of-sale at retail, increasing legislation and taxes, and possible FDA oversight. Looking to the future of tobacco, he encouraged wholesalers and manufacturers to think outside the box and imagine the many different ways consumers could get nicotine other than a traditional cigarette or cigar.
"What if you wanted to get nicotine through water. It’s out there folks. I know companies working on coffee that has nicotine, gum with nicotine…there’s hand gel with nicotine and lozenges. Can you imagine getting it in a strip or mist?" he said.
"Compared to the candy category, the industry is slower to react to innovation in tobacco. I challenge you to grab onto these ideas fast. The opportunities are out there," asserted Maiellano.
He predicted an alternative tobacco section in the c-store of the future, one that may contain snus, strips, inhalers, patches, and gels, among other items. "I know there are folks in this room who are old school and would rather get their nicotine from a cigarette, but I’m just letting you know that times are changing."
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