Leading edge growth strategies for cigar businesses

Cigar businesses have been growing since the nineties thanks to rising consumer demand and marketing approaches such as advertising in specialized channels and, more recently, digital influencer marketing activities. These tried and true mainstream services remain crucial to sustain the industry and attract new consumers. However, as macroeconomic pressures bear on all of us, we need to acknowledge that different growth strategies may be of great help.

Cigar businesses wishing to drive growth despite economic headwinds invest more in strategic decision support to aid their crucial product portfolio decisions and substantiate product uniqueness. Understanding what consumers want, region by region and market by market is essential to delivering the market fit that yields growth.

After all, we all know that consumers continue to evolve and demand quality in premium cigars more than quantity. This calls for cigar businesses to increasingly seek to understand and respect cigar lovers’ unique tastes and need for information as well as reliable education.

Predictive consumer analytics

This is one capability that helps cigar businesses with their product decisions. These leading indicators are driven by the structured outcome of consumer panels, or focus groups, conducted virtually with proven methods, striving to objectively evaluate the most appreciated blends, formats, price, and sensory characteristics. Such virtual market tests and simulations are a quick and cost-effective way to provide data-driven support to strategic decision making to ultimately reduce risks and optimize margins.

Expansion?in new markets is certainly?one use case, and our case study shows how successful companies can benefit not only by increased sales, but also by larger presence on-shelf and greater attention of retailers and distributors when a new line is offered.

In the current economic climate, we need to give growing importance to?risk management?when making product decisions:?“Where are gaps in our product portfolio? Where can we gain market share and which of our products best meet the expected characteristics of such market? How would consumers respond if we made this change to that blend? What should we offer to capture more retail shelf space being vacated due to the substantial price increase and supply problems of competitors?"... we have no doubt there will be other use cases we’ve yet to discover ...

Data- and science-based tasting information

Presenting products professionally and with technical competence does not always mean talking about tobacco seed and origin and their growing and processing methods. In fact, even for the most educated consumer, this is not always a reliable predictor of what they will experience from the product. Nor is promotional storytelling the best trust driver.

The most respectful and fair way to talk about natural premium cigars is to explain to consumers what sensory characteristics they will find in a given cigar. This goes through the understanding that there are huge gaps among human perceptions. It means that the most acclaimed (or self-proclaimed) expert is not necessarily the best taster when it is about providing the data that substantiates a cigar's characteristics.

In the end, it is increasingly important to listen to consumers, to understand what they genuinely need and desire. Everybody is entitled to their freedom of choice and the first step to acknowledge this is in showing respect for other people's palate. Ours is not the best of the world, it's just our own subjective perspective on the cigar.

For more information on leading edge growth strategies for cigar businesses, feel free to contact us at Cigar Sense.