TOB: On the occasion of Swisher’s 50th anniversary, can you tell us a little about the company’s history? What differentiates Swisher from other manufacturers?
Jane Green: Founded in 1861, Swisher International, Inc. has grown from a small cigar business to one of the world’s leading cigar manufacturers and a leading cigar exporter. Swisher manufactures a myriad of tobacco products, including a wide range of smokeless tobacco. Cigar brands include King Edward, Swisher Sweets, Optimo, and BlackStone. Smokeless tobacco brands include Lancaster, Mail Pouch, Chattanooga Chew, and Starr chewing tobacco, and Kayak, Silver Creek, and Redwood moist snuffs.
Swisher Sweets was launched to the market in 1958 and has since become the leading brand of cigars. The satisfying aroma of Swisher Sweets comes from a unique blend of quality tobaccos and special flavorings that have no imitation.
TOB: How do you plan to celebrate this milestone event? Will you be offering any promotions geared toward outlet retailers?
Green: Swisher is celebrating the 50th anniversary of Swisher Sweets with two $50,000 trivia games, one for our consumers, and another exclusively for our trading partners. Both games play the same. Every week until December 27, 2008, enthusiasts are invited to log in and play. There are five questions to answer in 50 seconds. Everyone who answers correctly within 50 seconds is placed in the random drawing for that week. We have a winner every Sunday of $1,000.
We invite tobacco outlets to join the trading partners game by registering at www.50sweetyears.com/partners. By registering at this special address, our trading partners will participate in a contest designed exclusively for them, with better odds of winning.
The 50th Anniversary game is being featured on millions of Swisher Sweets packs and boxes.
TOB: You manufacture and sell top brand names such as King Edward, Swisher Sweets, Silver Creek, and Redwood among many others. What new products have you introduced recently and what product lines do you plan to expand in the next six months?
Green: We’re very excited to introduce new Swisher Sweets Menthol Cigarillos this month. As you know, menthol is very popular with tobacco consumers, and we can’t wait for them to try our Swisher Sweets. We never skimp on flavor. The new menthol is being introduced in 5-packs, 25-count impulse displays, bonus box 60’s, and a special combo display.
We are test marketing a natural wrap cigar “Goodies” on the East Coast. This product will offer cigar consumers both quality and value, and is available in natural and vanilla flavors.
TOB: What trends or preferences have you observed in the cigar category?
Green: The most noticeable recent trend is the growth of single sales, perhaps fueled by the growth of various flavors. Consumers enjoy trying new products and retailers have learned that single cigars are a profitable part of their OTP business.
TOB: You produce both popular-priced and handmade cigars. Which area do you feel has the most growth potential in today’s market?
Green: While handmade cigar sales have grown steadily over the last few years, popular-priced cigars still make up 95 percent of all cigars sold and continue to grow in popularity.
TOB: How does Swisher work with retailers to help them educate their staffs and customers about cigars?
Green: We’ve built our business by building strong relationships with distributors and retailers. Swisher’s sales force has the tools, knowledge, and experience to guide tobacco outlets in their OTP selection and merchandising. Tobacco outlets are an important location for our products. We value the opportunity to display new products and sample new customers in this welcoming environment. We can develop plan-o-grams that will maximize the profit of your cigar section. You can contact your Swisher representative for assistance in this area.
TOB: What can merchants do to increase cigar sales? How wide of a variety do they need to offer? How important is display?
Green: Visibility is the key. If a customer doesn’t see the product, they won’t buy it. Displays need to be neat, clean, and as accessible as possible. This is the real advantage for outlets. They welcome tobacco consumers and treat them to a pleasurable shopping experience.
Outlets should be smart. There are dogs in every industry, and you don’t want to clutter the shelves with slow-moving product, but good variety is expected and welcomed. The flavor explosion demonstrates that tobacco consumers enjoy variety, enjoying trying new products, and that’s good for business. Take advantage of our expertise and ask for plan-o-gram help.
TOB: What trends or preferences have you observed in the smokeless category? What can merchants do to better merchandise smokeless tobacco?
Green: Two trends stand out in the moist snuff category. First, the price value segment continues to show positive growth. Value-priced moist snuff represented 42 percent of the total moist snuff volume in 2007. Our Kayak brands have shown very positive growth, which indicates that consumers are looking for quality products at an affordable price point.
Secondly, flavors have been well received by consumers in all OTP segments. We’ve experienced a positive response to flavors in the moist snuff category as well. Flavors include Peach, Apple, Cherry, and Grape. However, Wintergreen continues to remain the No. 1 flavor of most moist snuff users.
Merchants need to continue to merchandise these products in an accessible, visible position at retail and offer customers a variety of products to choose from (i.e. price points and flavors).
TOB: What is your view of the growth potential of the smokeless category at this point?
Green: All indications are positive that the moist snuff segment will continue to grow. Overall, the total category grew by 6.4 percent over last year and has grown by 22 percent over the past five years. The positive growth of the category has resulted in some new manufacturers entering the marketplace. Phillip Morris (moist snuff product) and Reynolds America (snus product) both entered the category in 2006 and in 2007. As more and more people look for alternatives to cigarettes, the moist snuff market continues to be a possible alternative for tobacco users.
TOB: There has been a great deal of controversy about regulation of cigars and tobacco by the FDA, as well as tax increases. What is your view of FDA regulation and how it will impact the industry and your business?
Green: Government regulation has always been a factor in the tobacco business. We will continue to work with all government agencies to comply with new regulations.
TOB: There is a great deal of consolidation taking place in the tobacco market today. How do you feel the mergers and acquisitions are likely to impact the manufacturing and retail landscapes?
Green: Consumers are not interested in who manufactures their favorite product. We see no major change taking place due to consolidation.
TOB: What do you see as the biggest challenges ahead for your company and the industry as a whole?
Green: The tobacco business has always been challenging. Swisher will continue to make quality products at a fair price. This simple plan has worked for us in the past and we feel it will work for us in the future.
TOB: What are your goals for the business in 2008?
Green: To continue to grow our business through unique marketing programs that enhance the appeal of our products. •