Above: Frank Pinto, manager of Barclay Rex on Maiden Lane in New York City (at left), found customers Michael Schwartz and R. Quagli keen to learn about the new brand and their chance of winning a vacation for two at one of the nationwide, in-store tasting events organized by Macanudo Robust on December 4, 1998.

High-ticket cigar events may have finally outlived their usefulness as a bread-and-butter means of brand promotion. Lately, cigar manufacturers are courting customer loyalty with in-store promotional events. And tobacco shops, not local restaurants, reap the long-term benefits.

About 35 cigar smokers, mostly men, recently gathered late on a weekday afternoon at the Pipe Puffer North in Indianapolis to find Doug Wood, owner of La Perla Habana cigars, passing out free samples and chatting about the merits of his three-year-old brand. Two kegs of draft beer were being drained in a back room and appetizers set out on a banquet table were disappearing at a steady rate.

It wasn’t nearly the same mood as the black-tie cigar dinner that the Pipe Puffer sponsored last year for $125 per person at a swanky downtown Indianapolis hotel. But from the Pipe Puffer’s perspective, the cigar tasting Wood sponsored was more productive business-wise.

“Tastings help sell,” said Pipe Puffer vice president Tony Rairden. “Customers are standing in your store. They are not sitting at a table where food might be the most important thing on their mind. They are looking at cutters and going into the humidor and buying other cigars that they would not be buying if they weren’t here.”

With the assistance of manufacturers large and small, in-store promotions, whether they are called smokers or tastings, have all but replaced cigar dinners as the favored manner for individual smoke shop owners to promote the cigar brands they sell.

“They bring me promotion at a low cost,” Rairden said. “At about a hundred bucks an event, they are worth it. They are not nearly as complicated to organize as a formal dinner, and the expense is not there, either.”

Above: A La Perla Partners in-store promotion held at the Pipe Puffer Smoke Shop in Indianapolis. From left: Ed and Sharon Piroska, Doug Wood, Tony Rairden, and Bill McCormick.

Beside La Perla Habana, the two-store chain in recent months has sponsored tastings for Indian Tabac, Macanudo Robust, Cuesta Rey, and Gilberto Cubana and La Vieja Habana cigars. Rairden said that during promotional events - usually from 4 p.m. until the store closes at 7 p.m. - sales for the day are likely to increase 20 percent. Typically, the retailer provides food and liquid refreshments, while the manufacturer provides cigars and sometimes door prizes.

J.C. Newman Cigar Co., Tampa, Fla., has staged between 300 and 400 store tastings for its La Unica and Cuesta Rey brands since January 1998, according to President Eric Newman.

“We started developing the program in the fall of 1997 knowing that business was changing and that the cigar boom was leveling off,” Newman said. “And we were looking for a way to sample our cigars in better fashion than a cigar dinner.”

Dubbed the J.C. Newman Cigar Spectacular, the event, besides offering samples of its cigars, supplies Diamond Crown accessories as door prizes at most tastings. “It benefits us because it introduces a lot of people to our cigars who haven’t tried them,” Newman said, “and it helps us help the retailer who is looking for ways to bring people into his shop. And the best thing is that it costs him almost nothing.”

A Better Match

Victor Migenes joins Charles Drury and Rich Perelman at a La Plata cigar tasting, the Humidor Room, New Orleans.

According to Wood, whose company is located in Burbank, Calif., “Dinners have been replaced because basically, the emphasis was on food. In-store promotions help to create brand awareness and solidify customer relations, not only with the owner of the brand, but also with the retailer.”

“Cigar tastings are different than dinners,” said Mike Chiusano, president of DomRey Cigar Ltd., Sarasota, Fla., manufacturer of Cusano cigar brand. “The thing a dinner doesn’t do is get the people into the guy’s shop. At a smoker, you not only get them tasting, but you get them buying.

“We put on a bit of a presentation,” notes Chiusano. “We welcome everybody, tell them our story, and go through the five tobaccos that are in a Cusano and where they taste them on their tongue. A lot of guys have some really good questions and each of them gives me an opportunity to tell people how we do things. It gives the shop owner an opportunity to give a little back to his clients and to sample their reaction. At a dinner, you don’t usually have that kind of opportunity.”

Bill McCormick, owner of Wilbur’s Fine Cigars, Evansville, Ind., which distributes La Perla Habana, Indian Tabac, and Cupido brands in Indiana and Kentucky, said it’s worthwhile for a manufacturer to promote an in-store event, even if sales aren’t necessarily going over the top before the event. “If a retailer is interested enough in bringing you into his store, he’s going to be interested enough to promote your cigar,” McCormick said.

Manufacturers need to have someone in the shops these days because the fight for shelf space is on.

“Helping a retailer put on a tasting helps me become more entrenched with my customers, and it creates good brand awareness for the manufacturer,” says McCormick. “They get discounted prices on boxes the day of the event, which brings revenue into the shop and, typically, I’m going to get prime space on his shelf after the tasting.”

Dinner Finale?
Some retailers have eschewed cigar dinners altogether in favor of in-store smokers.

“Basically we don’t do dinners any more,” said Charles Drury, owner of The Humidor Room, New Orleans, La., who tries to schedule in-store tastings six to eight times a year. “New Orleans is a tough place to get people to commit. At an in-store event, they don’t have to get dressed up and it won’t cost them anything. And the everyday common guy - the one who doesn’t have a tuxedo in his closet - feels like he can come in and be comfortable.” Indeed, the average guy who doesn’t want to spend $100 for a dinner doesn’t feel left out.

And the bottom line, Drury said, is the bottom line: “I make hardly anything during a dinner. At an event in the store, most everybody buys something, even if it’s only one cigar to smoke on the way home.” Smokers sponsored by manufacturers signal a change in the cigar business, Drury said.

“Three years ago, I couldn’t get anybody to come in here. Now, manufacturers are competing for shelf space,” Drury said. “They want to keep their presence out there. They are trying to fight through the Don Nobody cigars.”

Christian Grimshaw, executive vice president of Napa Cigar Co., Napa, Calif., maker of Napa Dominican Estate and Napa Dominican Reserve brands, said that many manufacturers found it so easy to sell cigars during the cigar boom that they forgot that their customer is the smoke shop owner as much as it is the cigar smoker.

“They thought that all you needed was a phone,” Grimshaw said. “They didn’t advertise and they didn’t service the smoke shops. That was a really short-term thought process.

“The retailers play a very important role in what products move in their stores. By supporting the retailer with in-store promotional events, they often support you in return. It’s an important part of the business. Companies that are motivated by long-term success are people who are keeping in touch with their retailers in whatever way they can.”

Chris Miller, Southwest area sales manager for Davidoff of Geneva, said that the commitment of the retailer is key to the success of any promotion. “No dinner or tasting is any good without a good retailer,” Miller said. “A dinner has limited ability to make sales for a cigar. When you are in a store and people are standing around mingling and thinking and talking about cigars, that’s when you will most often get a good amount of sales.”

Victor Migenes, president of La Plata Cigar Co., a Los Angeles manufacturer, said the success of in-store promotional events are a little less certain than cigar dinners, where people usually have a financial investment in the cost of the ticket.

“Smokers are a little hit or miss,” Migenes said. “It is informal with no guarantee how many people will show up. You hang out for two or three hours and you may get only 10 or 12 people. That’s time that is not well spent. But people are there because they came to see you. It is real direct and it is real personal. And when you leave, the shop owner is likely to pay some special attention to your cigars because you gave him some special attention.

“I think the retailer appreciates it when a small manufacturer takes the time to personally promote his cigars,” he continued. “A lot of retailers are small guys themselves and they empathize with the small manufacturer.”

But small manufacturers aren’t the only ones who have moved to smokers instead of dinners. General Cigar Co., Bloomfield, Conn., debuted its Macanudo Robust at 300 simultaneous in-store smokers in December, and company officials expect to do something similar after new Macanudo and Partagas cigars are introduced at the Retail Tobacco Dealers Association convention in Las Vegas. “Our goal in all promotions has been and will continue to be to promote our brands, but also to drive traffic into retail stores and turn that into sales,” said General marketing director Steve Raye.

“From our perspective, the marketplace has changed. We have moved from an era where demand exceeded supply to an era where supply is sufficient to meet demand. It has become a market-share game.

Another of the major manufacturers, Consolidated Cigar Co., Fort Lauderdale, Fla., provides store owners with invitations, store signs, and other promotional material to encourage attendance at in-store tastings. “It’s a way for our reps to get face-to-face with the retailer and with the consumers,” said Janelle Rosenfeld, Consolidated’s director of marketing. “We still participate in cigar dinners on a case-by-case basis with retailers. But once a consumer has attended one or two cigar dinners, they don’t need to keep doing it.”

Consolidated sales representatives are charged with setting aside between two and four days each quarter for in-store promotions. “That’s where consumers have a chance to really get in touch with the cigar and speak with a professional about it,” Rosenfeld said.

Left: The Humidor Room’s Charles Drury, on left, is joined by Robert Mondavi Jr., for the store’s 1st Anniversary Cigar Dinner celebration; Right: Guests and winners of Consolidated Cigar’s Operation Partnership at Modern Age Tobacco & Gifts in Gainsville, Fla.

Others also aren’t quite sold yet on the value of smokers. “Generally, I can take them or leave them unless it is for a company that really wants to work with me,” said David Wood, owner of Puff the Magic, Hyannis, Mass. “I’ve done a few, but I don’t get any substantial side sales. And in a couple of cases, the company hasn’t done what it said it would do to help me promote the event.

“I had a real beef with Consolidated because they basically wanted to show cigars that I don’t have on my shelf. They were trying to muscle me for shelf space.”

While promotion programs and frameworks are bound to evolve, few can argue that the renewed attention being paid to the retailer as an active participant in brand promotion is a welcome development. For smaller manufacturers, particularly boutique brands with limited resources to conduct in-store promotions, brand loyalty among retailers may be harder to maintain. Stores are increasingly eager to weigh the benefits of brand support, and store-level events neatly answer the “what can you do for me?” shrewdness humidor managers consider these days in stocking brands.