Republic Technologies, one of the UK’s leading tobacco accessories suppliers, is a specialist in ‘Roll Your Own’, supplying quality products under well-known brands including Swan, OCB and ZIG-ZAG.
With the ever-increasing tax on factory-made cigarettes, Roll Your Own (RYO) has been consistently growing its share of the overall tobacco category. However, since the EUTPD II regulations banning the open display of cigarettes and enforcing sale in plain packaging came into full effect in May 2017, the speed of the shift from factory-made cigarettes (FMC) has increased significantly.
Gavin Anderson, Republic Technologies’ General Sales Manager, spoke to Wholesale Manager.
“Wholesalers are crucial to our independent sector sales,” says Gavin, “and we invest considerable time building sustainable partnerships. I have implemented a channel structure aligning our wholesale customers with Republic Technologies’ sales specialists, who use their knowledge, skill and experience to drive mutual profitable growth through merchandising, range development and sales analysis.”
Distribution is another important element. Republic’s Manchester distribution centre operates with some of the best OTIF (On Time in Full) suppliers around, says Gavin:
“Most of our wholesale customers receive direct deliveries, while some opt for third party services in line with their supply chain needs. We try to fulfil most orders in five days, but some areas receive them in three. We also have the flexibility to help in unusual situations, such as when wholesalers are short on stock.”
“Our product range provides a one-stop shop for delivered wholesalers and cash and carries,” says Gavin, “and includes household brand names such as Swan, which has a market-leading value share of the filters market, complemented by our other fast-growing filters and papers brands such as the category-boosting ZIG-ZAG and OCB. Together they provide the choice, quality and value today’s discerning rolling tobacco smokers are seeking, at an affordable price.”
Republic is also a major force in the £20 million+ UK matches market*2 and has rejuvenated the category in the last 12 months with a major range upgrade. Key elements included NPD for the iconic Swan brand and new packaging for Cook’s, Bryant & May Extra Long and Ship matches, reflecting sustainable products’ growing appeal and increased demand for eco-friendly matches.
The lighters sector is also performing well, says Gavin, up almost 9% on the previous year, with Republic Technologies one of the leading suppliers in the £84 million market*:
“Most of our customers are people who have been smoking for some time and have opted for roll-your-own for various reasons. The core age range is 25 to 34s, but RYO smokers span a much broader age range. Music plays an important part in the lives of our core target market, with many of them also enjoying a traditional night out at the pub.”
Better value for money versus cigarettes remains a key consideration for RYO smokers, says Gavin. Many people also like the ritual and tactile aspects of rolling, which has the added benefit of reducing consumption as it means smoking becomes less instant:
“There is quite a bit of overlap with pre-made cigarettes and vaping, but with RYO smokers this is occasion or convenience driven, as most of our consumers prefer the RYO experience.” Of those who prefer RYO cigarettes, says Gavin, 38% also smoke pre-made cigarettes while 39% also vape.
As with many other consumer categories, environmental considerations are impacting on the tobacco accessories market as demand grows for more natural products, reduced packaging and concerns are raised about single-use plastics. In recent years Republic Technologies has focused heavily on environmentally friendly NPD which exceeds customer needs and expectations, to help maintain growth in the tobacco accessories market. The company’s environmentally led NPD includes OCB Virgin Slim Papers and OCB Virgin Slim & Tips and Swan Ultra Slim, the thinnest ever Swan filter, a premium quality product targeting discerning smokers.
Featuring an unbleached paper with a natural brown colour, OCB Virgin is a top-quality rolling paper, offering a silky touch, lightweight feel and premium quality, providing the best possible rolling experience. Each leaf is gummed with OCB natural acacia gum, sustainably sourced from African acacia trees, which is 100% natural, vegetarian, and GM free. OCB Virgin Slim and OCB Virgin Slim & Tips are also available in a slim vertical box, helping retailers to manage shelf space effectively.
Republic Technologies’ products are available pretty much everywhere, says Gavin:
”Virtually every retailer stocks at least one of our products, whether it’s matches, lighters, filters or cigarette papers. We work with everyone, some directly and others indirectly, but it’s our products on the shelves nonetheless.”
Republic interacts through its channel structure with all levels of retail, including convenience, high street and supermarkets:
“Our experience and knowledge of the UK market is sizeable and our sales teams are actively working with some of the largest retail, wholesale and distribution groups, developing their businesses through best practice category management.”
As the tobacco ban impacts on cigarette sales, says Gavin, retailers in England and Wales are increasingly using tobacco accessories to signpost the wider category and, with Republic’s help, are meeting the needs of today’s more discerning tobacco accessories consumers.
“We have a National Account Manager for the wholesale channel and a Customer Development Team, which is responsible for most aspects of the commercial chain. The team works closely with a wide variety of wholesale customers, ensuring they complete, display and promote their optimum range to maximise sales and profit. The team covers the whole of the UK and Ireland on a two to four weeks cycle, and also offers category advice and joint business planning to ensure maximum profit return for wholesalers and their customers.”
Gavin says Republic has been resilient in response to the recent consolidation in the UK wholesale sector:
“The market consolidation has brought both challenges and opportunities. P&H’s demise changed the landscape and resulted in us changing how we operate. One of the positive outcomes is that we now work more closely than ever with many customers, which is driving business and category growth. Following Landmark and Today’s merger as Unitas Wholesale we have strengthened our links with many Unitas members, with whom we have long-standing relationships.”
The changing wholesale environment means suppliers need to be flexible and willing to listen, says Gavin:
“Our wholesale customers look upon us as a company that really understands its market and is committed to long term, profitable category growth, to our mutual benefit. Testimony to this is the fact that more wholesalers are now embracing the category and truly recognising the contribution it can make to their business through the allocation of more space, more focus and a realisation of the profit opportunities presented by tobacco accessories.”
Imaginative and effective promotions are another important ingredient in the mix, says Gavin:
“I find it amazing how similar promotional packages can have different outcomes. It depends on the type of customer – what works for one wholesaler does not have the same impact in another. It’s fair to say the mechanics of a promotion vary between wholesalers, but we pride ourselves on being flexible and promotion-friendly. We also invest in wholesaler digital activities. One thing that hasn’t changed is that cash and carries have the bonus of display and we have witnessed strong sales growth in using branded bays, focus events and supplier days/weeks, coupled with engaging customer activity, such as the ZIG-ZAG Big Gig Giveaway ‘Wheel of fortune’!”
Republic Technologies has a wide-ranging retailer engagement programme, says Gavin, targeting independent retailers. In-store merchandising and display are top priority:
“We maintain regular dialogue with convenience retailers via news and features in trade media, category management supplements, store visits, sponsorships and sharing with them the latest market trends, including changes in consumer preferences and purchasing habits.”
The most high profile part of Republic Technologies’ brand support package is its consumer activity:
“We’re driving awareness of OCB Virgin across the country, ensuring retailers are aware of the surge in demand for environmentally friendly RYO accessories. In addition, we’ve renewed our Cook’s Matches partnership with celebrity chef Tom Kerridge for another 12 months, including recipe usage on-pack and social media activity. As almost 60% of RYO smokers are heavily into music, this remains a key focus for us. Our ZIG-ZAG partnership with the Academy Music Group is continuing this year, including sponsorship of the smoking areas at AMG/O2 venues and extensive social/digital activity.”