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Backbar of the Future
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02/24/2022

The Backbar of the Future

This past summer, Philip Morris International CEO Jacek Olczak said the company will “absolutely” end the sale of traditional cigarettes within the U.K. This aligns with a government plan that calls for the United Kingdom to go smokefree by 2030. 

“We can see the world without cigarettes,” Olczak stated at the time. “And actually, the sooner it happens, the better it is for everyone. With the right regulation and information, it can happen 10 years from now in some countries.”

In September, Swedish Match initiated preparations for a separation of its cigar business, announcing it was looking to exit the manufacturing of combustible tobacco products so that it can focus on smokefree lines, such as nicotine pouches and snus. 

“This announcement is another milestone toward achievement of our aspiration to become an entirely smokefree organization with a clear leadership position in oral reduced risk products, including ZYN,” said Swedish Match President and CEO Lars Dahlgren. 

With more and more tobacco manufacturers shifting focus away from combustibles, the convenience store tobacco business of the future can be a fuzzy picture for retailers. To help sharpen their vision, Convenience Store News recently consulted with industry experts about what the next decade will hold for one of the convenience channel’s most important — and challenging — product categories. 

The experts we spoke to relay some caution — but also positivity and opportunity — for the c-store backbar a decade into the future, provided that retailers stay on the pulse of what’s already happening. Here are some of their key 2032 predictions:

Combustibles Will Not Be Extinct

“Old habits don’t die, they slowly rust out,” quipped Cadent Consulting Group Managing Director Don Stuart, who added, more seriously, that his Wilton, Conn.-based firm projects combustibles will still represent 50 percent of tobacco sales for c-stores 10 years from now. 

“While traditional cigarettes will not approach extinction over the next 10 years, there will be a dramatic falloff in unit sales,” he acknowledged. “Related categories, such as pipe tobacco and cigars, will also continue to decline.”

Don Burke, senior vice president of Management Science Associates Inc. (MSA), a Pittsburgh based company focused on analytics and informatics, forecasts that traditional cigarettes will represent about 30-40 percent of the tobacco category in unit sales come 2032, roughly half of the current level. Nevertheless, cigarettes “will remain a strong component of a c-store’s tobacco business,” according to Burke. 

“Obviously, cigarette sales have been in decline for decades, but the fact is that during this period, cigarettes have remained an important part of c-store profits and margins. It is not unrealistic to expect the cigarette space to continue to contract; however, there is still a significant demand that will not be going away overnight,” echoed Karen Saber, vice president of business analytics for Jacksonville, Fla.-based Swisher, a manufacturer of cigars, moist tobacco, oral nicotine products, and more. 

Saber pointed out that the tobacco space is constantly transforming and diversifying into new segments, which she expects will continue 10 years out.