Tobacco Business

[ 52 ] TOBACCO BUSINESS [ MAY / JUNE | 21 ] 2020 was a pivotal year for Scandinavian Tobacco Group (STG) and its U.S.-based premium cigar business, General Cigar Co. Early in the year, it was announced that General Cigar Co. would be among the companies that would not exhibit at the Premium Cigar Association trade show, a move that signaled to the industry that the company was preparing to make big moves. As the COVID-19 pandemic went on to disrupt the entire cigar industry, STG and the General Cigar charged forward with new product releases spread throughout the year. The company also launched CigarWorld.com, a new consumer- centric website that promotes the cigar culture and the premium cigar brands within General Cigar’s vast portfolio. At the start of 2021, STG unveiled the next step in its plans to better serve the handmade cigar industry: the launch of Forged Cigar Company, an independent national cigar distribution network that would take on part of General Cigar’s portfolio of cigar brands. Forging is a creative skill that provides strength and flexibility to metal, and it was this process of shaping and transforming that inspired the name of STG’s latest subsidiary. Forged Cigar Company, which officially opened its doors in February of this year, was developed to deepen STG’s support for the brick-and-mortar channel. The company is set up to operate as a standalone cigar distribution network with its own dedicated sales team that is supported by marketing and customized programming. It also is an extension of STG’s desire to cement its position as an industry leader when it comes to handmade cigars. Forged Cigar Company’s team will adapt and be nimble in its building and promotion of the brands within its portfolio, deepening STG’s relationships with retailers and cigar smokers in the process. “The Forged Cigar Company speaks to our strategic imperative of accelerating STG within the handmade cigar category and represents our commitment to investing in retail in the U.S.,” says Régis Broersma, STG’s president and senior vice president of Division North America Branded & Rest of World. “Under our previous structure, we had one team representing a large portfolio of brands, and as a result some of our brands simply did not receive enough support. We recognized that there were underrepresented brands in our portfolio with tremendous untapped potential in the marketplace and responded by creating a standalone distribution company to drive our growth in the U.S. market.” Forged Cigar Company is another example of the strategic approach STG takes to its tobacco business. After weighing opportunities and identifying which ones have the most potential, the company goes all in on doing what is necessary to support the idea and make it a success. With retail remaining integral to the premium cigar industry, Forged Cigar Company was a must for STG and its future growth in the U.S. “By building a standalone distribution company, we are investing heavily in the U.S. and honoring the pledge we made last year to deepen support of our retail partners,” explains Broersma. “With Forged, we established a completely new and independent national cigar distribution network. This required the typical startup expenses of creating a new business, which included recruiting top-tier cigar sales professionals with strong connections, entrepreneurial instincts and, most importantly, a consistent track record of success in the pre- mium cigar category. Additionally, Forged Cigar Company requires continual funding. We are com- mitting significant resources toward supporting the Forged brands with ongoing, specialized programming and will spend incrementally against deliver- ing a cadence of innovations to generate excitement across the entire Forged portfolio.” Growth Opportunities For STG and its subsidiary, General Cigar, 2018 and 2019were all about focusing on supporting what the company considered to be its priority brands: Macanudo, CAO, Cohiba and Punch. As a result of this attention, STG saw exponential growth within each of these brands, which as a result contributed to STG’s overall growth. In 2020, this trajectory of growth continued and STG took what it saw as the necessary steps to ensure the ongoing growth. This was accomplished by reallocating funds that had in past years been used for exhibiting at the industry’s summer trade show back into the company itself. While it wouldn’t make its official debut until 2021, Forged Cigar Company began to take shape during what would be an unprecedented year for many businesses. While the pandemic of the past year hindered many businesses, it actually sped up the development and overall need for Forged Cigar Company. According to Broersma, STG saw an increase in premium cigar consumption, and the handmade cigar category grew during the pandemic. To capitalize on the growth trends in the marketplace, STG accelerated its investment in Forged Cigar Company. Long before the pandemic, it has been STG’s goal to grow its handmade cigar business, The Forged Cigar Company speaks to our strategic imperative of accelerating STG within the handmade cigar category and represents our commitment to investing in retail in the U.S. — Régis Broersma