You can’t smoke a cigarette without a lighter or matches. Likewise you can’t make a roll your own cigarette without papers. These items the lighters, matches and papers are often forgotten when you think about the multi-billion pound cigarette market but they have an important part to play.
According to Nielsen Market Track data (June 2009), smoking accessories are worth around £130m a year to the UK retail trade. And much of the category’s success is down to the continued growth of the roll-your-own (RYO) market. Smoking accessories like papers and filter tips allow smokers to adapt the final product to their own requirements. The good news for forecourt retailers is the excellent margins these items offer.
Cameron Miles, Imperial Tobacco’s trade sector manager for forecourts, comments: "Each year, UK adult smokers spend around £109m on rolling papers alone in retail outlets and around 10% of these sales are made in forecourts.
"The Rizla brand accounts for around three quarters of rolling paper sales in the UK and makes up the top five rolling papers in forecourts. Rizla regular green remains the UK market leader as well as the favourite among adult smokers using forecourts. It has a 50%-plus market share and is worth almost £4m to forecourt retailers."
Miles says Rizla regular blue has increased its sales share and now accounts for more than 13% of the regular paper market. In the king-size paper segment, Rizla king-size slim silver has more than a 40% share and is worth £2.5m to forecourt operators each year.
Meanwhile the newer Rizla smooth is an innovative rolling paper which includes hundreds of tiny perforations in each sheet to deliver a smoother taste for smokers who are making the transition from cigarettes to RYO.
Miles says that because Rizla is the UK’s market leader, the brand is always looking at new ways to create innovation and, in a world first, it has become the first rolling paper to be certified by the Forest Stewardship Council (FSC).
Meanwhile, Mark Aldred, marketing manager of Republic Technologies (UK), reckons a combination of the economic downturn and an increase in taxation has hit the adult smoker in the pocket with increasingly more choosing to roll their own. "Our Swan brand of rolling papers offers a wide range of products (including papers across king size and regular in green, blue, red, liquorice, free burning and silver varieties).
"Swan is a trusted brand with more than 126 years of heritage and consumer resonance. With its lower price and enhanced margins for retailers, switching or dual-stocking Swan can increase overall profitability in the rolling paper category.
"We believe that retailers should pay particular attention to Swan green in both single and multipack options. The Swan green multipack offers consumers one free booklet when they purchase five. This gives the consumer something that no other brand offers in the UK."
He says the other ’must stock’ product is the Swan Combi pocket-size pack (containing 50 papers and 50 filters).
"It offers retailers excellent margins and has been enjoying outstanding sales growth of 122% on last year (Nielsen July ’09). Consumer feedback has been excellent and the product is being backed with sampling and advertising."
The UK lighters market is worth around £67m, and forecourts have a 13% share of the total market. According to Nielsen, Tokai Emphorel is the most popular lighter in forecourts with almost 23% market share, worth £2.2m.
Retailers are advised to keep their lighter ranges fresh with new designs stocked as soon as they are available.
Diane Bon, marketing manager at Bic explains: "Seventy-five per cent of lighters are purchased on impulse (Bic internal source 2004), which suggests that design is becoming an increasingly important factor for driving sales. This means it is vital for forecourt traders to display new and eye-catching designs on-shelf."
One of Bic’s latest designs is the limited-edition Mini and Maxi lighters featuring the ING Renault F1 Team.
Again according to Nielsen Market Track data (June 2009), over the past 12 months there has been an increase in the number of adult smokers purchasing rolling machines and filter tips in forecourts. Rolling machine sales have increased by 25% and filter tips by 13%.
Imperial’s Cameron comments: "There is an ongoing trend which has seen adult smokers moving into the RYO tobacco sector for the value, economy, control and quality offered by brands."
In the UK over four million adults smoke both cigarettes and RYO tobacco they may smoke RYO cigarettes during the week and then smoke factory-made cigarettes at the weekend, for example.
"With more adult smokers moving into the RYO sector it gives forecourt operators the opportunity to offer associated products such as rolling machines, rolling papers and filter tips all of which give very significant trade margins," says Cameron. As the RYO market continues to grow, retailers should regularly review their ranges to ensure that the RYO category is given the space it deserves."