Tobacco Business

[ T O B A C C O B U S I N E S S . C O M ] TOBACCO BUSINESS [ 21 ] RETAILERS WERE AMONG THOSE THAT FACED THE BIGGEST AND MOST daunting challenges due to the COVID-19 pandemic in 2020. As the virus began taking hold of society, many tobacco retailers were deemed non-essential businesses and were forced to close their doors for months—and those that remained open faced a dramatic drop in in-store traffic. One unexpected result of the pandemic, however, was the meteoric uptick in premium cigar consumption and interest, giving retailers such as Cigars International (CI) a major boost in a very turbulent time. Cigars International, a subsidiary of Scandinavian Tobacco Group (STG) that is headquar- tered in Bethlehem, Pennsylvania, has been a dominant force in the tobacco retail category since its launch in 1996. Cigars International is among the largest internet and catalog retail- ers of handmade cigars and accessories in the U.S. Today, Cigars International has more than 1 million active online customers that the company affectionately refers to as the “CI Nation,” and it annually distributes over 20 million catalogs to consumers across the country. While e-commerce plays a major part in Cigars International’s overall business, it also has seven brick-and-mortar super-stores spread throughout Pennsylvania, Florida and Texas, with several more locations currently in the works. For Scandinavian Tobacco Group, creating spaces and opportunities where cigar enthusi- asts can freely smoke and take part in the lifestyle is important to its overall goal of becoming a leader in the U.S. handmade cigar category. That’s why Cigars International has become the centerpiece of its growth strategy in recent years. Leading the charge at Cigars International is Sarah Santos, a professional with a love of numbers and data as well as a unique under- standing of retail and the consumer’s relationship with its businesses and the products they buy. In our interview with Santos, she shared her insights into tobacco retail and the evolving preferences and demands from today’s cigar consumer, giving retailers of all sizes a behind- the-scenes glimpse at how the largest cigar “super-store” franchise operates. Gaining Retail Experience Santos grew up in the Pocono Mountains of Pennsylvania. Long before Santos began work- ing at Cigars International, cigars played a role in her family dynamics. Santos’ maternal grandfather, who passed away before she was born, was an avid cigar smoker. Her paternal grandmother hand-rolled cigars in a factory located on the south side of Bethlehem while her paternal grandfather worked at Bethlehem Steel, which was located on the site where Scandi- navian Tobacco Group’s office and distribution center now stands. Santos describes herself as a diligent student who wanted to experience big business. Since she was young, Santos has been good with numbers, and she knew she wanted to work in finance. Yearning for something a bit faster paced than what rural Pennsylvania had to offer, Santos moved to New York in the middle of e-commerce’s coming of age period in the mid- 1990s. “I was hooked on multichannel retailing from that point on,” she shares. While attending college, Santos had the opportunity to gain experience in finance by taking on a role within a finance team, and she quickly realized that she wanted and needed more from a professional career. She did discover, however, that she had an interest in leading a diverse team and learning from professionals of different backgrounds and skill sets. “I realized that I had a keen interest in enabling growth and efficiency to gain competitive advantage by leveraging advances in technology,” she explains. Santos’ career before Scandinavian Tobacco Group saw her working in omnichannel business-to-consumer retail across several categories of various backgrounds, including con- sumer electronics, teenage girls’ apparel, pet food and sporting goods. “These were all startups, and my roles were entrepreneurial through periods of quick growth. I drove the multichannel tech-intensive agendas of these businesses, covering contact centers to online and all the way through to brick-and-mortar retail expansion.” These positions allowed Santos to gain the broad experience that was necessary to run a business as she was required to wear many hats at these various organizations. Several of these companies went public and had merger and acquisition strategies, preparing her for