It has acquired a second larger instrument business - filling out its instrumentation portfolio, in addition to its earlier acquisition of Sodim  - and acquired the successful Borgwaldt Flavor business.

Integrating the Borgwaldt and Sodim businesses will realise cost savings – but only if there’s a real consolidation effort in premises and staff.

Superficially, Hauni could be accused of mimicking Molins (Tobacco machinery) who bought Cerulean (the largest Instrumentation supplier) several years ago. This would be unfair. Although Cerulean is larger, the acquisition evens up the playing field while simultaneously diminishing competition.

Nevertheless a quick look at the product lines confirms there is product duplication. Both have a range of multiple parameter test stations and a range of manual digital instruments – representing a large portion of sales. How will this be resolved? Borgwaldt has a range of smoking machines, which Sodim does not. Sodim recently agreed to market Burghart’s smoking machines.  Borgwaldt and Burghart do not get along and haven’t for some time. It is hard to imagine two instrument businesses selling competing smoking machines under Hauni’s common ownership for long. Will the Burghart line be dropped?

The flavor business does well – albeit within the new Hauni ownership – it looks a little out of place. What does Hauni plan for this?

So what has Hauni really gained and where will it take the business? Does the acquisition strategically fit or is it purely opportunistic? Does Borgwaldt bring to Hauni opportunities or is it the other way round?

Comments welcome.

In a move sure to upset prospective exhibitors and attendees – World Tobacco (WT) sent out a late email on May 7 canceling its show scheduled for May 29-31. The email informs it was told by the venue on May 2nd it could not hold the show.

This is the second show canceled this year and the third if you include Sinotab scheduled to be in Macau early September.

The late cancellation will cause some exhibitors and visitors unrecoverable costs. Contracts for stand builds will have already been paid and equipment shipped as well as airline tickets bought.

In the last couple of months there were signs something was awry. WT canceled some participants when they learned no tobaco products could be shown – including advertising materials, signage and samples. Only recently was the license granted to actually hold the show.

Tobacco Journal International’s (TJI April – May) edition dedicated its front page to the exhibition and included many pages of  exhibition information and orientation.

Comments and feeback welcome.

not

TPE will now be known as Tobacco Plus Convenience (TPC) and will get a new logo to herald the invitation and inclusion of any and all stores that carry tobacco products, according to Ed O’Connor, president of TMG International Inc., which produces the event.

“Convenience stores, which rely upon the tobacco category for 41 percent of their revenues, are a natural fit for TPE,” stated O’Connor. “With a trade show floor featuring more than 270 manufacturers and wholesalers, TPE can offer convenience store attendees a comprehensive assortment of tobacco and tobacco-related products under one roof.”

O’Connor pointed to the increasing popularity of electronic cigarettes and the fact that major cigarette companies are now entering the market to compete directly with their traditional product. Lorillard Tobacco Co. acquired blu e-cigarettes last year; Altria recently entered the market through its Nu Markdivision; and Reynolds Vapor Co., a division of Reynolds American Inc. (RAI), just announced plans to expand distribution of its Vuse electronic cigarette.

TPE offers c-store owners and retailers the chance to review an array of tobacco products, as well as attend educational seminars on recent trends and top-of-mind issues around all the categories of tobacco, O’Connor noted. As the tobacco industry evolves, all channels of retail selling tobacco will be required to carry multiple brands and SKUs to keep up with consumer demand coupled with the pace of innovations. Hence, the show is expanding its focus by changing its name and logo.

“We are changing the name of our show from ‘Tobacco Plus Expo’ to ‘Tobacco Plus Convenience’ to reflect a rolling out of the proverbial red carpet to the convenience industry, welcoming them to join the tobacconists, tobacco outlets and smoke shop attendees we already serve,” said O’Connor.

The new TPC logo preserves the familiarity of TPE – the “buyer show” – while symbolizing the show’s mission, “It’s all about tobacco business.”

“Our goal is to maintain the activities and programs that respond to the essential needs of the retail tobacco communities we serve,” O’Connor concluded.

http://www.csnews.com/top-story-tobacco-tobacco_plus_expo_getting_a_name_change-63639.html

Comments and feedback – welcome

Despite whining about the excessive number of trade shows, their encroachment and cost – the shows still go on.
In the US trade show attendance is still reasonably healthy but elsewhere in the world it is not.
The one exception is Inter-Tabac Dortmund which appears to grow each year and is by far the best and largest for tobacco products every year.

This year, The show in Manila was poorly attended. Exhibitors were slightly less than 2012 but attendance dropped from 800+ in 2012 to 500+ this year.
The Krakow show – held in mid-April – is also small and sparsely attended and the show in Moscow – re-scheduled for June from last November is canceled.
In the short-term this leaves Istanbul at the end of May. It had promise. Then it was learned no tobacco products are allowed. Or displayed; including pictures, advertising and samples. Hmm!

Comments and feedback welcome

Altria Group Inc., the largest seller of tobacco in the U.S., is getting into the e-cig business. The company announced that its subsidiary Nu Mark is planning to introduce an electronic cigarette in the second half of 2013, Bloomberg reported.

The electronic cigarette will be sold in an undisclosed market.

As demand traditional cigarette sales are declining, electronic cigarettes are inching closer to the mainstream. Chief Executive Officer Martin Barrington is aiming to catch up to smaller rivals, such as NJOY and Lorillard Inc. (LO), which says its blu eCigs brand controls more than 40% of the U.S. market. Reynolds American Inc. (RAI) said this week it plans to expand its Vuse e-cigarette this year, according to Bloomberg.

Lorillard CEO Murray Kessler told analysts yesterday the company estimates that electronic cigarette sales displaced consumption of about 600 million cigarettes in the first quarter. That totals an annual rate of roughly 2.4 billion cigarettes, accounting for about 1% of the U.S. market, according to Kenneth Shea, a Bloomberg Industries analyst in Skillman, N.J.

Altria To Debut Electronic Cigarette

MIAMI, FL–(Marketwired – Apr 23, 2013) – V2 Cigs(R), America’s largest volume online retailer of electronic cigarettes, announced today a strategic partnership with National Tobacco Company (NTC), distributor of the iconic Zig-Zag(R) and Beech-Nut(R) brands. The two companies have joined forces in the development of a new line of electronic cigarette products for the retail market. The new products will debut at this year’s NATO show in Las Vegas, Nevada.

The new line will feature a redesigned V2 Cigs Disposable model that will be sold alongside V2′s new rechargeable Express Kits and refill cartomizer products. Products will be showcased in a variety of multi-product display units designed to stand out on the counters of C-Store and Tobacco retailers.

“The new disposable electronic cigarette models in this line offer a major step forward in consumer experience provided by its vapor and battery performance,” said Dan Recio, President of Business Development at V2 Cigs. “Additionally they feature a soft and pliable form factor to more closely mimic the traditional smoking experience. Our new disposables have been focus group tested against the other major retail brands. Over a 3-day trial period with the same consumers, the new V2 disposable was rated the best in overall experience, and the most likely to result in a repeat purchase. These new models feature over 400 puffs, with an aggressive MSRP while maintaining the integrity of trade margins. This allows us to offer a far more competitive value proposition than anything else currently on the market. Some brands boast that their disposables feel the most like a real cigarette — what good is that if it only has enough puffs to last a few hours?”

The new partnership will bring the V2 Cigs line of electronic cigarette products to a greatly expanded list of retailers across the nation. National Tobacco Company will become the exclusive marketer and distributor of V2 Cigs products in domestic C-Stores and other retail outlets.

“NTC products are currently sold in over 150,000 retail locations in the United States,” said Graham Purdy, Vice President of Sales and Trade Marketing for NTC. “We are very excited to add the V2 Cigs brand to our product arsenal. The manufacturing and online marketing power of V2 Cigs complements NTC’s extensive field sales organization and account management teams. This strategic partnership will allow retailers to tap into a significant portion of adult electronic cigarette consumers that can only find their brand today in the online environment. This represents a perfect synergy.”

With more than one million customers spread evenly across the country, V2 Cigs is perfectly positioned to drive online buyers into traditional retail outlets. The company will soon be adding a store locator to its web site at v2cigs.com, and a downloadable mobile app to help existing V2 Cigs customers find their favorite products at local retail stores. V2 Cigs products are already sold in a variety of national retailers, such as HESS gas stations and Pilot Truck Stops, but the rate of retail deployment will increase significantly as a result of the new partnership. NTC and V2 Cigs expect to expand distribution to no less than 30,000 additional retail locations this year alone.

V2 Cigs will support its retail expansion with an extensive marketing program that includes TV and radio advertising, local promotional couponing, on-site demo teams and product demonstrations, free samples, zip-code targeted direct mailings, Sunday newspaper inserts and coupons, and web, mobile and event promotion. V2 Cigs will also provide retailers with a wide array of merchandising options, including small-footprint countertop displays.

“Over the past few years, traditional retail brands have been transitioning online, today we are seeing a new trend with the most successful online brands moving into retail,” said Andries Verleur, CEO of V2 Cigs. “2013 was already on track to be our best year, but post-NTC it’s likely we could exceed our own best projections by up to 30%. It’s time to show the competition the power of Internet dominance. This partnership will demonstrate the competitive power of developing high-demand brands on the internet and making them available to a wider audience at retail. Our intent is to drive retail sales. V2 Cigs is setting the standard for quality, because, for the last 4 years, we spent our resources refining our quality control and manufacturing techniques. By delaying the high cost of traditional retail deployment, with its inherently low margins, we built a rapidly scalable and more vertically integrated supply chain than any of our competitors. With NTC running offense, we can maintain our focus on product quality — we don’t have to reinvent the wheel.”

“The partnership with V2 Cigs allows both companies to build upon their mutual strengths,” said NTC President and CEO Larry Wexler. “We are combining V2 Cigs’ excellence in product design and manufacturing with National Tobacco’s record of innovative introductions such as Stoker’s Moist Snuff Tubs and Zig-Zag Cigar Make Your Own Systems. This will provide our trade partners with a proven winner now only available on the internet and allow them to profitably participate in the rapidly growing electronic cigarette segment with a product providing great consumer value.”

Bonnie Herzog, analyst for Wells Fargo Securities, estimates the e-cigarette category will surpass the one-billion dollar sales threshold in 2013 as more adult consumers migrate from traditional cigarettes to the innovative e-cigarette format. Continued exponential growth is expected as the category gains momentum in the marketplace.

About V2 Cigs. V2 Cigs is the flagship brand of VMR Products LLC. V2Cigs.com, the brand’s online store, receives over 6million unique monthly visitors. With more than 1-million customers, V2 Cigs is also the world’s largest online retailer of e-cigs, averaging over 4,000 online orders per day in the United States. The company’s web-site V2Cigs.com is one of America’s top 2,000 websites according to leading web-metrics provider Alexa.com. VMR also produces Vapor Couture (vaporcouture.com), the only electronic cigarette brand for fashionable women.

For more information about V2 Cigs, please visit http://www.v2cigs.com, or National Media Contact: Alex Schreer 305.515.2987

About National Tobacco Co, L.P. National Tobacco Company is an innovative marketer and manufacturer of tobacco products in the cigar, cigar wraps, moist snuff, loose leaf, MYO cigarettes and pipe tobacco categories. NTC distributes over 150 tobacco products from a brand portfolio that includes Zig-Zag(R), Stoker’s(R) and Beech-Nut(R). National Tobacco is currently the leading distributor of cigarette papers and cigar wraps, and the #2 distributor of loose leaf chewing tobacco in the US. For more information, visit http://www.zigzag.com

According to the current labels on nicotine replacement products, consumers should stop use after 12 weeks, at most. However, the FDA announced today that the makers of nicotine gum and other nicotine replacement products can now change the labels to let consumers know they can use the products for longer periods as long as they are talking to their doctor, The Associated Press reported.

The FDA is also suggesting the removal of the warning that consumers should not use a nicotine replacement product if they are still smoking, chewing tobacco, using snuff or any other product that contains nicotine — including another nicotine replacement product.

Nicotine replacement products, designed to help people stop smoking by supplying controlled amounts of nicotine to ease the withdrawal symptoms, were first approved about 30 years ago. The products have moved from prescription to over-the-counter within the last 17 years. When they were first approved for over-the-counter use, little reliable data existed on the safety of long-term use, or the safety of using more than one product containing nicotine at the same time, the FDA explained.

According to the news report, the agency said many in the public health arena voiced concern that the current labels were barriers to smokers who were trying to quit, because they would relapse if they stopped using the nicotine replacement products after the suggested time period. Also, consumers would abandon their attempt to quit if they had a cigarette while using nicotine replacement products.

The agency hopes the recommended changes will “allow more people to use these products effectively for smoking cessation and that tobacco dependence will decline,” FDA Commissioner Margaret Hamburg said in a statement.

The makers of nicotine replacement products must seek approval to change their labels, but the FDA said the companies can cite the studies used by the agency, according to the AP.

GlaxoSmithKline, the leading seller of nicotine-replacement therapy products under the Nicorette and NicoDerm CQ brands, called the FDA’s action a “positive step to help more smokers quit.” It plans to work with the FDA to make changes to its product labeling “as soon as possible.”

http://www.csnews.com/print-topstory-fda_oks_longer_term_use_of_nicotine_replacement_products-63113.html

GOODLETTSVILLE, Tenn. — Rick Dreiling, chairman and CEO of Dollar General Corp.–which announced plans in December to roll out tobacco at most of its more than 10,500 discount stores in 40 states by the end of second-quarter 2013–said during its fourth-quarter 2012 conference call on Tuesday that test stores are selling “33% more” tobacco than they thought they would sell.

“We are excited with what we’re seeing in regards to traffic,” he said

Read Full Article