The history of Scandinavian Tobacco Group Lane Ltd. (STG Lane) is decorated with successful, well-known heritage brands, while the company itself is anything but traditional. STG Lane is a progressive, forward-thinking tobacco company that focuses most of its attention in three categories: roll your own tobacco, traditional pipe tobacco and filtered cigars. STG Lane faces a rather formidable challenge in selling and marketing these products: each of these are traditional tobacco categories that are in a state of decline. Regardless, each category remains an important part of STG’s overall business plan.
Using data to fuel their marketing, strategy and relationships with retailers and other business partners, STG Lane remains competitive and important to today’s tobacco business landscape.
Kelly Michols, president of STG Lane, and others at his company acknowledge that there are some categories of tobacco products in decline. “There are parts of these segments that we’re seeing some growth in—particularly the premium segments—and some building excitement that we hope bodes well for the future,” says Michols. “The mainstream segments are still vital to the overall tobacco business but they’re not the hottest segments in terms of growth right now.”
To support these lower-growth categories, the company tries to take a more modern approach to how they market items. STG Lane has gathered consumer and market data research over the years that has enabled it to develop effective strategies for retailers and its customers. The company is constantly trying to understand and think aggressively about the market from more of a category management standpoint rather than what’s going to be best for STG Lane, an approach that’s helped STG Lane move products and remain viable as a business. Besides strategic thinking and planning, STG Lane relies heavily on its parent company, Scandinavian Tobacco Group, and all of its resources and data.
A DIVERSE PRODUCT PORTFOLIO
Besides data, STG Lane’s diverse product lineup also keeps the company thriving in a tough marketplace. While there are declining categories of tobacco products, the company has brands within each with long histories that are still very popular with its customers.
“While, overall, some segments may be slipping, we’ve got the premium segment, which is actually showing some nice, strong growth, and we believe that’s driven by the desire for the consumer to have an elevated experience when they choose to smoke,” explains Michols.
Another trend the company is watching is that of age 21-plus millennial smokers having an interest in experimenting with and trying new things. When millennial smokers try new products, they are seeking quality, premium experiences. The premium areas of STG Lane’s business excite Michols and his team and are viewed as new opportunities and challenges.
A POSITIVE FORECAST
When asked what STG Lane’s plans are going forward, Michols has a very simple answer: STG Lane will continue to be a trusted resource for retailers, wholesalers and other business partners. Whether it be with data, or information about regulations, taxes and rules, Michols and those at STG Lane want to be a source of valuable information and data that can help businesses flourish in today’s market.
“We feel very excited about the future. For us, we have the benefit of not being alone in this,” says Michols. “We’ve got this big company that lets us do our thing based on what’s appropriate and what’s required in the U.S., but we’ve also got this global organization that we can draw ideas and inspiration from and support each other, which gives us even more confidence in where we’re headed. I expect STG Lane to be around for a very long time and to be an influencer in terms of what will happen with tobacco down the road.”
– Story by Antoine Reid
This story first appeared in the July/August 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.