Inter-Continental Trading was among the many manufacturers who enjoyed a banner year at the 2017 Tobacco Plus Expo in January, where founder and president Shargio Patel told Tobacco Business that business has been booming for his Mount Prospect, Illinois-based company, which manufactures and distributes a wide range of pipe tobacco, filtered cigars and cigarette tubes and accessories.
Founded in 2004, the company has been expanding on its additive- and preservative-free offerings, playing into a trend toward natural products. “While the filtered cigar segment continues to perform well,” says Patel, “there is a missed opportunity with higher-margin, premium brands. When it comes to all-natural products, consumers are willing to spend a little extra, and Au Naturallé Filtered Cigars offer retailers a better return on those few inches of space.”
Recently, Tobacco Business connected with Patel to hear more about what’s new with Inter-Continental Trading USA, and what his plans are for the company’s future. Excerpts from that conversation follow.
When we spoke at TPE 2017, you mentioned doing a lot of business at the show. Was that across categories or are some performing particularly well for you?
All of our lines—pipe tobacco, filtered cigars and tubes—exceeded our expectations at the 2017 Tobacco Plus Expo. The OHM line of pipe tobacco has a large following, so our success at the show was attributed to both our existing clients and new customers getting more and more requests.
You introduced Au Naturallé cigars in 2016. What prompted you to launch a new cigar and pipe tobacco line?
With the demand for additive-free products continuing to grow, the Au Naturallé line fills a niche in the premium pipe tobacco and filtered cigar segments. On the business side, it also offers retailers the opportunity of higher margins and a brand that gets away from the “me-too” products prevalent in the marketplace. It’s been shown time and time again that consumers are willing to pay a little more for a product perceived as a higher quality.
What distinguishes it from OHM, 752 and the rest of the offerings currently in the marketplace? What are your plans for its future?
Au Naturallé completes our “Good, Better, Best” spectrum of product offerings. Where 752 fills the economy role and OHM has always been our flagship brand, Au Naturallé is the final piece that gives our customers a choice along all price points. There aren’t any concrete plans in the works, but I believe Au Naturallé would allow us an opportunity for more exotic blends.
Your 752 brand of pipe tobacco and cigars is targeted at value-conscious smokers. How price-conscious are cigarette and cigar smokers?
Regardless of the market segment, there will always be consumers looking for a high-quality, value product and smokers aren’t any different. Personally, I believe smokers are quality-driven first, then [price-driven]. That’s how we approached 752—the best blends at an affordable price.
What are your goals for this brand going forward? How do you distinguish it
from competing brands?
We obviously want to see 752 grow and achieve the same success as OHM, so we are educating our client base and new customers on the line’s benefits. We differentiate 752 with dynamic packaging and marketing identity, whereas typical generic products don’t really stand out.
What are your plans for the remainder of 2017? Do you have any new product launches or promotional campaigns planned?
On the promotional side and new product launches, we are standing pat for the time being. We are waiting to see how the FDA regulations shake out and the effect they will have on the industry.
– Story by Jennifer Gelfand
This story first appeared in the May/June 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.