News; Apr 29, 2002 CET

Success for cigars in North America

Increased sales, market share gains and production efficiencies – that sums up the success achieved by the personnel in charge of machine made cigars in the U.S. during 2001. Among the explanations are a more efficient sales force and improved marketing.

One of several factors underlying these successes is the fact that the sales force became larger and more efficient. The process had already begun in 1999 when Swedish Match acquired the operations for machine made cigars from General Cigar. With the acquisition, Swedish Match’s existing sales force became larger and more efficient through a variety of training initiatives and realized synergies.

This in turn improved contacts with retail outlets, since a larger number of sales personnel can naturally reach a greater number of retailers. »We are one of the few producers that cover the entire spectrum from inexpensive to exclusive machine made cigars,« explains Dan Carr, Vice President, Sales. »White-Owl, one of our lower price brands was extremely successful in 2001. While Garcia y Vega, the leading natural leaf cigar, increased sales while maintaining its market position,« notes Carr.

At the same time, an exhaustive review of all costs from production plants to sales organization was implemented.

»We will continue our focus on cost reductions and efficiencies in 2002 which also includes a continuing examination of our product range: we continually look to eliminate slow moving inefficient items and replace them with new products to satisfy emerging consumer trends,« says Ed Golden, Vice President, Marketing.

The foundation for continued improvement is driven by a thorough understanding f the consumer and the category. »We have conducted extensive consumer research and this has given us an in-depth understanding of the category, perceptual brand map, consumer motivations and what influences brand position,« continues Ed Golden.

Looking forward, a major task is to strengthen the company’s position in the more expensive price segment led by Garcia y Vega. The brand has considerable equity and there is the opportunity to solidify the brand position and its leadership in the natural-leaf segment. »New packaging, to be launched in the second-half of 2002, will be the key marketing initiative for the brand,« adds David Price, Director of Marketing for Cigars.

»This is an extremely dynamic market.

You cannot afford to sit still for single minute,« underscores David Price. »We must be able to spot trends and react to changes in the market at an early stage.«