NATIONAL REPORT — Not to sound dramatic, but standing still could kill a convenience store's tobacco business. That’s because the business is ever-changing — one minute, combustible cigarettes are the main game in town, while the next minute, electronic cigarettes are the darling of the category. Retailers must stay on top of consumer demands, manufacturer innovations, and even regulatory-induced trends.
For example, legalized medical and recreational marijuana is garnering more attention across the nation. As it spreads, it opens up new areas of opportunity for the convenience channel, namely in the cannabis accessories segment.
This is not to say retailers are going to be selling marijuana in the stores; that's not going to happen in the near future until a lot of things change, according to David Bishop, managing partner of sales and marketing firm Balvor LLC. Cannabis accessories is just an extension, and they should be added by retailers on a case-by-case basis.
"Not that it's something for all retailers; it clearly isn't. But it is an example of how the landscape is changing," Bishop said. "Some would argue, 'that's not tobacco.' That's true, but it is a combustible product or a leaf-based product that is consumed in a similar way."
Smoking cessation is another segment c-store retailers should consider adding to their tobacco space, Bishop suggested, pointing to Reynolds American Inc.'s ZONNIC gum.
“... It does provide a way to evolve what we think of tobacco. Part of that is reframing what exactly we mean," he said. "If we take the risk-reduction continuum or harm-reduction strategy, on one side, you have traditional combustible products and, more recently, we have electronic nicotine devices. What is to stop us from going a little further to smoking cessation?"
The "tobacco" retailing business can evolve in any number of ways. It just depends on the retailer and how they are positioned.
"It's rethinking what that backbar represents," said Bishop. "Does it simply represent tobacco, or does it represent a certain need or usage occasion that we could look at differently?"
For an in-depth report on tobacco in the convenience channel, look in the April issue of Convenience Store News.