Wawa’s Cigar Sales Flourish With Middleton Partnership

“John Middleton has some very strong sellers in our stores, but the new merchandiser they developed with us has been an overall improvement to the [cigar] category.”

John Middleton Inc. has been operating in the Philadelphia area since 1856, beginning with a retail tobacco shop. More than a hundred years later, John Middleton divested its retail operations and turned its primary focus on manufacturing and marketing of pipe tobacco and cigars throughout the U.S. In 1968, the company launched the first-ever cigar made of pipe tobacco. Today, John Middleton’s Black & Mild fivepack is the best-selling cigar package in the U.S., according to ACNielsen.

John Middleton, which sells only popular-priced cigars, has been been purchasing-ACNielsen data to monitor trends in the cigar market since the 1990s. One key finding for the company is that a majority of popular-priced cigars are purchased in convenience stores. John Middleton also noticed that while cigar sales swelled in the ’90s, and popular-priced cigars had strong sales growth in 2001, the most significant general trend in the cigar business today is slowed growth. Cigar sales are still increasing, but not at the high growth rates seen in the 1990s. So, John Middleton felt it was time for retailers to sell smarter.

Wawa Inc. (Wawa, PA) also recognized that cigars are a rapidly growing category and wanted to improve the category’s overall presence in its stores. The chain announced its intentions to all of its manufacturer partners who, in turn, offered rack solutions. But Wawa was more interested in a customized merchandiser that would be a perfect fit for its stores. After explaining to John Middleton the specifics of what it was looking for, the two companies worked together to design a Plexiglas rack for Wawa stores that could hold 30 cigar SKUs. Wawa had positioned the new merchandisers in 325 stores as of August 2, and while it’s still early for hard sales results, the chain has noticed the difference the merchandiser has made.

“We wanted to improve the presence of cigars in our stores,” says Jane Coleman, product manager for the 540-store chain.

“Previously, cigars were merchandised in the cigarette pack feeder with virtually no visibility. Our manufacturers were bringing us their racks, but they just wouldn’t work in our stores—we needed something made specifically for our situation. John Middleton worked with us to develop racks for our stores that have made the category more of a focal point behind the counter.

“John Middleton has some very strong sellers in our stores,” Coleman continues, “but the new merchandiser they developed with us has been an overall improvement to the [cigar] category.”

As with any category, retailers will maximize sales and profits by planogramming the SKUs that meet their shoppers’ needs. Working with tobacco wholesalers, John Middleton account managers have the experience, expertise and data that can help retailers lay out a planogram that maximizes sales and profits in specific locations.

“John Middleton provides trends and data to help manage the category—specifically-with size, variety and flavors that are selling well,” says Coleman. “They provide the data in an easy-to-read format so we can compare it with other cigar category data. It helps to keep the information consistent.”

John Middleton also runs quarterly promotions that are available through its wholesalers. A number of these promotions feature its 25-count. cigar upright, a package that can effectively help promote single cigar sales, which in turn help retailers reap higher margins.

“We want to provide any support we can that will increase take-away at the retail level,” says John Giese, director of national sales for John Middleton. “Any special signage our retailers need to attract customers to the product, we’ll do. And we’ll evaluate how store-specific promotions run and if they work, we’ll do it again and again.”

 

css.php