24 TOBACCO BUSINESS | NOVEMBER / DECEMBER | 22 as manufacturers compete for revenue dollars. Wholesaler Santa Clara has noticed aggressive promotions across distributor and e-commerce channels this year. More e-commerce websites have been seen offering sitewide discounts on tobacco products, but what’s made these different businesses stand out from one another is improved service, product innovation, quality offerings and investments to grow efficiencies. “With 2021 in the rearview mirror, we have faced a slight leveling off in terms of B2B sellout in 2022,” says David Joyce, Santa Clara’s director of wholesale operations. “It has remained important for us to be creative and market our extensive portfolio of premium cigars in a way to capture or exceed revenue over the prior year. For example, some adult consumers likely traded down to less expensive cigars as high inflation created a difficult market environment. As a result, we built catalog promotions around mix-and-match deals to offer value to our partners and strengthen the average order value. We have emphasized our private label offerings and quality promotional campaigns. This strategy places focus on big premium cigar brand names that are exclusive to Santa Clara. The products are generally more affordable, and the profits and margins are typically high.” This year, asmany companies increased the number of limited edition releases, Maya Selva Cigars spent much of its efforts developing a new product catalog. During this process, the Maya Selva Cigars team worked on creating a more unified corporate image in all markets while offering its partners more of what they needed based on local regulations and through scheduled promotions. Filippo Costi, Maya Selva Cigars’ chief commercial officer, noted that one trend that’s been growing year over year is also the focus on the female cigar smoker and making sure this demographic of cigar smokers is included in many company’s marketing plans. Another trend within the cigar industry in 2022 was the return of big events, including trade shows and national festivals. Luis Falto, owner of Tabacalera Falto, noted that more companies are turning to short videos to bring attention to their products and companies. The 2023 Marketing Plan With a new year just around the corner, how should tobacco businesses be preparing their marketing plans? Here’s the advice and tips our panel offered to help supercharge your tobacco business’s marketing efforts in 2023. Filippo Costi (Maya Selva): “Be clear about the DNA of your brand, and always be honest.” Luis Falto (Tabacalera Falto): “Boutique is the way to go. Customers are looking for special and unique cigars—something in small quantities that’s seen as exclusive.” Adam Grzybek (BIC): “In established categories such as lighters, it is critically important to lead with safety and quality, to bring innovative products to market, and to be bold with how you message to the consumer. The status quo will no longer move the needle. Safe, high-quality and innovative products—combined with disruptive marketing that leverages an effective and compelling story—will help brands to better connect with the consumer, connect to a wider audience and ultimately drive incremental sales.” David Joyce (Santa Clara): “The cost of goods and doing business continues to rise while demand has stabilized after the pandemic surge. We would advise tobacco marketers to focus on one’s strengths and do your best to remain competitive to retain customers. Be resilient and evaluate weaknesses so that marketing opportunities rise to the surface. That will go a long way to help you achieve your business goals. Staying engaged and up to date with a diverse and quality product portfolio that generates retail turns and profits is key. When dealing with the trade, look for quality, reliable and time-tested partners who understand your business. Finally, practice best-in-class customer service to generate loyalty and customer retention and to increase sales performance.” John Miller (22nd Century Group): “Innovation in the tobacco category is creating new opportunities for products with authorized claims, such as VLN [very low nicotine]. The relationship with regulatory bodies and government agencies needs to shift. As tobacco product marketers, we should actively work to align ourselves to not only the interests of adult smokers but also create a new dynamic with regulators. The industry and regulatory agencies should focus on delivering to adult smokers science-based, truthful messages and encouraging adult smokers to make informed choices based on their individual needs.” TB FILIPPO COSTI Maya Selva LUIS FALTO Tabacalera Falto ADAM GRZYBEK BIC DAVID JOYCE Santa Clara JOHN MILLER 22nd Century Group Meet Our Panel
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