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This study identifies the specific product characteristics driving mass-merchandise cigar sales in the context of the changing regulatory environment.
Cigar sales data in US convenience stores during 2008–2015 were purchased from Nielsen’s Convenience Track system. Descriptive statistics highlight changes in the cigar market over time.
Sales of flavored cigars increased by nearly 50% since 2008 and now make up over half of the cigar market. Fruit remains the most popular flavor group, but the sale of non-descript flavors such as “Jazz” and “Green” has grown substantially. Inexpensive 2- and 3-packs made up less than 1% of cigar sales in 2008, but by 2015 this packaging style held 40% of the market share. Black & Mild and Swisher Sweets dominate the convenience store channel and together are responsible for nearly 60% of total mass-merchandise cigar sales.
Cigar companies take advantage of features recently banned for cigarettes, such as flavorings and small pack sizes to maintain strong sales. Given the appeal of mass-merchandise cigars to youth and young adults, the FDA and other governing bodies should regulate the manufacturing and promotion of cigars in the same way they have regulated cigarettes.
Consumption of cigars in the United States (US) has increased substantially over the last decade amid declining cigarette sales.1 Although premium hand-rolled cigars historically have been the stereotypical image associated with cigar smoking, trade sources estimate that machine-manufactured, mass-merchandise cigars constitute nearly 92% of today’s cigar market.2 Despite the extreme diversity of the products in this category, which vary in terms of size, flavorings, packaging, and tip styles, no universally-accepted cigar classification system exists. Moreover, the industry self-classifies and labels its products with little oversight, contributing to the complexity of product standardization. Only little cigars that resemble cigarettes have a legal designation based on weight for taxation purposes.3 Throughout this paper, the term “cigars” largely refers to the inexpensive, machine-made cigars, cigarillos and little/filtered cigars widely available at convenience stores, unless specifically designated “premium cigars.” The recent growth in cigar consumption is partly driven by high rates of cigar use among youth and young adults in the US, who have among the highest prevalence of use. Data from the 2014 National Youth Tobacco Survey (NYTS) indicate that cigars are the second most popular tobacco product among high school boys and the most commonly used tobacco product among black students.4 Almost 10% of all high school students have used a cigar in the past 30 days.4 In 2013, nearly one in 10 young adults reported using cigars every day, some days, or rarely, a higher prevalence than any other age group.5 Moreover, young adults overwhelmingly prefer cigarillos and other mass-merchandise cigars as their usual cigar type.6
Although all types of cigars are now regulated by the Food and Drug Administration (FDA), they historically have faced lower federal and state excise taxes as well as fewer product regulations compared to cigarettes, which allowed the mass-merchandise cigar market in particular to flourish.7 In 1998, The Master Settlement Agreement banned many forms of cigarette advertising, such as billboards, use of cartoon characters, and brand sponsorship of youth-focused events. Cigar manufacturers are not subject to these restrictions nor do they make compensatory annual payments to the settling states. Similarly, the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), signed into law in 2009, placed several restrictions on cigarettes but not cigars. For example, characterizing flavors (with the exception of menthol) are now banned for cigarettes. Cigars, however, continue to be sold in hundreds of flavored varieties that are known to appeal to youth and young adults.8–10 Unlike cigarettes, which must be sold in packs of 20, cigars have no minimum packaging laws. Coupled with tax advantages over cigarettes,11 small pack sizes contribute to the affordability of mass-merchandise cigars.
In the absence of comprehensive state tobacco control policies as well as the historical lack of federal regulation, cigar sales have remained strong; however, the extent to which specific product features have contributed to the category’s growth is unclear. Convenience store trade publications have pointed to flavored cigars and re-sealable, “foil fresh” packaging as increasingly popular product attributes,12 but detailed analyses of sales data are necessary to describe growth trends with accuracy. Furthermore, the ways in which the cigar industry altered its product offerings after the passage of the Tobacco Control Act are understudied. Cigar companies may have leveraged the newly prohibited features in cigarettes to maximize their profits during this time period. Indeed, the Djarum clove cigarette, a brand extension of Kretek International Inc, was reintroduced as a clove cigar in 2009 in what was seen as a circumvention of the flavored cigarette ban.13 It is possible that other cigar market shifts occurred in anticipation of the FDA’s deeming regulations as well as those that may follow in the near future (eg, a product standard that bans characterizing flavors). This study uses Nielsen convenience store sales data from 2008 to 2015 to identify the specific product characteristics, such as brand, flavor, and packaging, that are driving cigar sales and to describe recent shifts in the cigar marketplace in the context of the changing regulatory environment.
National cigar sales data during 2008–2015 were purchased from Nielsen’s Convenience Track system, a service widely used in industry and research that collects information on point-of-sale purchases from US convenience stores.14 Using a combination of in-store barcode readers, as well as audits of retail locations without such equipment, Nielsen produces sales estimates that are representative of all types of convenience stores, including independent stores, such as “mom and pop” shops (eg, bodegas, mini-marts, neighborhood corner stores), convenience stores attached to gas stations, and major retail chains. For each unique Universal Product Code (UPC) in the cigar database, Nielsen assigns product attributes, such as brand, flavor, and pack size, and reports annual unit and dollar sales. On the rare occasion that attributes were unclear or unavailable for a UPC listing, the product in question was sought online or purchased in stores to amend Nielsen’s description. Nielsen sales data have been used in several other studies that describe market trends in tobacco retail.9,15–18
Sales data were merged into a master database in SPSS (Version 21). For each year, we calculated market share by brand, flavor groups, and packaging styles. Flavors were categorized by research staff into one of the following groups: unflavored, fruit (eg, white grape, strawberry), sweet (eg, vanilla, cream), wine, clove, liquor/cocktail (eg, rum, piña colada), mint/menthol, or other (eg, coffee, “Jazz”). Dollar sales instead of unit sales were used to calculate market share to account for the extreme variability in cigar packaging styles. For example, both a single stick and a 10 pack of cigars are considered one “unit.” We considered using stick volume to calculate market share, but because little cigars are typically sold in packs of 20, their product characteristics are disproportionately inflated even though they constitute a small proportion of over-all unit sales.
Changes in the cigar market between 2008 and 2015 were described using percent changes in sales and absolute change in market share for each product attribute. All dollar sales presented are adjusted for inflation to 2015 dollars to enable standardized comparisons across years. A more detailed analysis of the 2015 cigar market describes the distribution of popular product attributes and average unit prices among the most common packing styles: single stick cigars, 2–3 packs, 5-packs, and 20 packs (ie, little cigars).
Table 1 presents annual sales figures and market share for each product attribute. Table 2 shows the changes in the marketplace between 2008 and 2015 (ie, percent growth, absolute change in market share). From 2008 to 2015, unit sales of cigars steadily increased from 994.2 million to over 1.5 billion, but dollar sales experienced more volatility. Despite a decline in dollars sales after 2010, sales figures for 2015 approached $2.3 billion, indicating signs of renewed growth. Indeed, overall dollar sales increased by nearly 23% from the $1.8 billion generated in 2008.
Table 2 illustrates the substantial contribution of flavored cigars to the overall growth of the cigar market. More than half of cigars sold in 2015 were flavored, an 8.5% absolute change in market share from 2008. Moreover, Nielsen data indicate that the amount of unique flavor names doubled during this time period, from 108 individual flavors in 2008 to 250 by 2015 (data not in table). Examples of new flavors in 2015 include “Pumpkin Spice,” “Maybach Melon,” and “Maple Syrup.” Although fruit flavors still constitute the largest flavor group, their sales volume and market share declined substantially between study years. Conversely, clove cigars, although still a small flavor category in 2015, saw a marked increase in sales following the 2009 ban on flavored cigarettes. This is predominantly attributed to the Djarum brand, which “converted” its clove cigarette into a little cigar in 2009.12 Notably, the “other” flavor category experienced the greatest increase in market share and now makes up over 15% of all cigar sales. Although this category includes flavors that do not readily fit into other categories, such as “Java,” the individual flavors in the “other” group with the highest market share were “Jazz,” “Green,” “Tropical,” and several other terms that do not explicitly name a verifiable flavor (Table 3).
In 2015, the 10 best-selling brands together made up over 90% of total cigar sales (Table 2). Black & Mild and Swisher Sweets have dominated the cigar market across all years, with Black & Mild emerging as brand leader in 2011 and retaining this position into 2015. Other popular brands, such as White Owl, Dutch Masters, Garcia y Vega (producer of “Game” cigars), and Backwoods, also held sizable market shares. Zig Zag, a brand once better-known for rolling papers and blunt wraps, was virtually non-existent in the cigar category in 2008; by 2015, the brand had soared to the 9th best-selling brand following a near 2 million percent increase in dollar volume. Generally, major brands generate most of their sales from flavored cigars. Only Black & Mild, Dutch Masters, and Phillies sold a higher proportion of unflavored cigars compared to flavored cigars. The latter 2 brands were the only ones in the top 10 to experience a decrease in sales volume between 2008 and 2015.
As Table 2 indicates, 5-packs of cigars were the most common packaging style in 2008 (42.6% of the market), but 5-count products have lost significant market share in the past decade. Single stick cigars also have become slightly less popular since 2008. These decreases correspond with an explosive growth in 2–3 packs, whose sales grew by over 7 thousand percent. Representing less than 1% of the cigar market in 2008, this packaging style constituted 40% of all cigar sales in 2015. Emerging evidence suggests that the low price points of the 2–3 count packaging style may be driving purchases of these products, particularly among individuals who are using only the outer leaf to make blunts.19 On average, 2–3 packs are only slightly more expensive than single sticks ($1.18 vs $1.05, respectively), potentially representing a “better deal” for consumers. Table 4 data illustrate that a greater proportion of 2–3 packs are sold in flavors compared to other pack sizes. In 2015, nearly 60% of 2–3 packs were flavored, with half of those being fruit-flavored (Table 4). Swisher Sweets, White Owl, and Garcia y Vega comprise a majority of the 2–3 pack market, whereas Black & Mild dominates the single stick category. Little cigars (ie, 20 packs) remain largely unflavored, although they are the only packaging style to sell a sizable proportion of mint/menthol flavored products, an indication that the little cigar market may be geared toward cigarette smokers. Swisher Sweets and Cheyenne together make up over half of the little cigar market, with another 41% attributed to brands such as American Made, Clipper, Prime Time, Santa Fe, and others.
Until recently, no federal regulations existed to govern cigar manufacturing and promotion. In this limited regulatory environment, cigar companies took advantage of features that are banned for cigarettes, such as flavorings and small packaging sizes. An analysis of convenience store sales data after the passage of the Tobacco Control Act illustrates that these very attributes are maintaining strong cigar sales while cigarette consumption continues to decline. Unsurprisingly, the only major cigar brands that experienced sales losses between 2008 and 2015, Dutch Masters and Phillies, predominantly sell unflavored products. Evidence published in 2016 indicates that flavored cigars are particularly appealing to young adults, many of whom perceive these products to be less risky.20 The unprecedented surge in the “other” flavor category, which primarily consists of ambiguous terms such as “Jazz” and “Green,” suggests that cigar companies may be steering away from overt flavor labels in anticipation of a future flavor ban.21 Indeed, the cigar industry has a long history of circumventing federal regulations by modifying the manufacturing, labeling, and promotion of their products.13,22 Cigar market growth in recent years can also be attributed to the popularity of inexpensive, 2–3 packs of cigars. Although Nielsen did not provide information about the packaging material for each product, 2–3 packs are almost exclusively packaged in the “foil fresh,” often re-sealable pouches of cigarillos that trade reports indicate are driving unit sales23 and that are common among young adults for blunt use.19 Typically sold for 99 cents or with “buy one, get one” offers, these products’ low price points may explain the decrease in dollar volume after 2010 despite a steady increase in units sold.
Nielsen sales data provide rich information about cigar market trends, but the approach used in this study has limitations that should be considered when interpreting the results. Principally, the data represent cigar sales in convenience stores, not other retail locations such as drug, liquor, and tobacco stores. It should be noted, however, that convenience stores are the single largest retail outlet for mass-merchandise cigars, which account for over 90% of cigar unit sales in the US.2 Second, the data reported in this study are national; we expect that there are regional variations in the popularity of various brands and styles that we were unable to examine. Third, we cannot make inferences about cigar use behaviors based on these sales data. It is well documented that cigarillos and other mass-market cigars are often used as blunts, whereby the user empties the tobacco and replaces it with marijuana.24–26 The rise in marijuana use among young people27 may have contributed to the popularity of certain brands and product features. For example, some studies have demonstrated that use of flavored cigars is strongly tied to blunt use.9,19 Improving population surveillance on cigar smoking prevalence, and the ways in which people use cigars, would provide additional context to changes observed in the marketplace.
Cigars carry many of the same health risks as cigarettes, including increased rates of lung cancer, heart disease, and all-cause mortality.28 As the prevalence of cigar smoking remains high, particularly among youth and young adults, we recommend that the FDA and other governing bodies regulate these products in the same way that they have imposed restrictions on cigarette manufacturing. Our findings that flavorings are contributing to the growth of the cigar market, coupled with epidemiological evidence documenting a preference for flavored products among youth,9,10 provide strong support for a flavor ban. Additionally, minimum packaging requirements for cigars and tax parity with cigarettes may drive down rates of cigar use by reducing the products’ affordability. The relatively low cost of cigars compared to cigarettes undoubtedly contributed to the rise in cigar use over the past 2 decades.11 Finally, better standardization of cigar classifications would (1) eliminate loopholes that the industry has historically used to evade taxation and other policies,22,29 and (2) facilitate appropriate regulation across diverse categories of cigar products.
Funding for the conference and this manuscript was made possible, in part, by the Food and Drug Administration through grant I R13 FD 005491-01. Views expressed in written conference materials or publications and by speakers and moderators do not necessarily reflect the official policies of the Department of Health and Human Services; moreover, mention of trade names, commercial practices, or organization does not imply endorsement by the United States Government. This study also was supported by a grant from the National Institutes of Health, National Cancer Institute (3P30CA072720-17S1).
Human Subjects Statement
This research used no human subjects and was exempt from human subjects review.
Conflict of Interest Statement
All authors of this article declare they have no conflicts of interest.
Cristine D. Delnevo, Professor, Rutgers School of Public Health, Center for Tobacco Studies, Piscataway, NJ.
Daniel P. Giovenco, Assistant Professor, Columbia University Mailman School of Public Health, New York City, NY.
Erin J. Miller Lo, Research Associate, Rutgers School of Public Health, Center for Tobacco Studies, Piscataway, NJ.