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Roll Your Own: A Stable Trend

Date: 2018-08-01
Views: 1136

By Murdoch McBride

Recent media reports, including articles generated by anti-smoking groups, have suggested the possibility of a renewed interest in rolling your own cigarettes. But this posed some questions: Is there really a significant growth trend for roll your own (RYO) cigarettes?” “Is RYO simply holding its own?” Or, was an “RYO trend” being cited in order to bolster an entirely separate argument?”

Some quick research and a series of inquiries addressed a few of these possibilities in Australia, Europe, and the United States. Basically, we found that RYO is a stable business.

Like many stories, it was a puzzle. The first piece of the puzzle to fall into place was time, because it always helps to remember the history of RYO. A little over a century ago, rolling your own cigarettes was not the exception, it was the rule. And at about that time, the mother of real trends in tobacco was launched with the mass manufacture of packaged cigarettes. As the market for packaged cigarettes boomed and developed into what has been described as the most successful consumer product to ever be “rolled out,” if you will, RYO remained viable, but it was eclipsed by the new market for packaged cigarettes. RYO became unique, an independent person’s choice and often an economic alternative to packaged smokes. Today, RYO is increasingly viewed as a personal ritual suited to any number of profiles, from hipsters to frugal independents.

RYO has a variety of applications, some mainstream and others certainly on the fringe. But, it was not and probably never will be marginalized as a product and instead will keep its place within the continuum of tobacco products for the foreseeable future. In fact, the competition between RYO businesses can be cutthroat as we discovered in New Jersey.

Some of the less desirable trends in tobacco, like illicit trade, continue to vex all sectors of the industry and RYO is no exception. Case in point, American Tobacco in New Milford, New Jersey just outside New York City, where retired policeman Buddy Barrett is the owner/operator. Barrett is personable and outgoing, skilled at judging people after a career in local law enforcement and equally adept at making friends and building a tobacco store business that offers a community experience for like-minded patrons. Barrett’s investment and commitment to his business is evident everywhere you look. American Tobacco is located in a nice strip mall on a bit of a perch with plenty of parking and a view of the busy road that turns down and around the place. It is furnished tightly with leather couches and carved wood humidors and lockers. He has a friendly staff and a five-month-old bloodhound puppy that chews the leg of the game table whenever Barrett gets to talking.  As interesting as it was to share time with Barrett and one of his cigar customers, when we asked about the state of RYO and whether he felt it was growing, he had a tough story to tell.

“I cannot answer that honestly because for the past few years I have not known what the RYO business is doing,” Barrett told Tobacco Asia. “That’s because there is another shop run by a guy near here and I figure that I have lost 90% of my RYO business to him. They are paying cash for their tobacco, buying from a company in Pennsylvania and avoiding state taxes. Because of that, I basically had to convert from an RYO store to a cigar lounge. I pay $30 for a bag of tobacco with tax and I haven’t raised my prices in seven years. They are paying $22 and avoiding tax, so they are selling tobacco for $30-$31 a bag and they are taking all of my customers.”

Barrett still sells a variety of RYO products, but nothing like before. Asked if the other guy’s store was selling legitimately produced products, Barrett said, “They are selling genuine products, like American Spirit, all the same brands that I sell, but they are paying cash and bypassing state tax.”

Elsewhere in the United States, and at the corporate level, Tobacco Asia reached out to AMCON, a leading wholesale distributor of consumer products, including tobacco. AMCON has distribution centers in several states including Illinois, Missouri, Nebraska, North Dakota, and South Dakota. AMCON chief executive officer and chairman of the board Christopher H. Atayan gave us a read about whether his company had noted any trends with RYO.

“I can’t say that we are seeing any significant trend in RYO,” Atayan said. “It is a stable business for us, but I would not say that we have really seen it trending either way. We service 5,000 retail outlets, so if there was a particular trend I think we would have noticed it. I can tell you one trend that we do notice, and that is the consistent decline in carton sales for cigarettes, which is offset by the regular price increases from the tobacco companies. So, that is a trend. But with RYO, I would say it is a stable business.”

According to a knowledgeable source in tobacco manufacturing, some people in Europe switch to RYO, especially in countries after you see an increase in levels of taxation on cigarettes per pack. “It has caused some to move to RYO rather than packs,” the source said. “But I am not aware of RYO trends other than that.”

Down Under, RYO was recently portrayed in the print media as a troubling trend. In Australia, where plain packaging has been established for a few years, the tobacco industry not only deals with this but also with some of the stiffest government and regulatory opposition found anywhere in the world. While these influences have no doubt affected Australia’s traditional cigarette market, the recent print media coverage of RYO is less about defining a trend in RYO than it is about publicizing themes linked to the general anti-smoking campaign. The recent coverage in Australia was sourced in part by regional anti-smoking groups and appeared clearly aligned with the government’s anti-tobacco policies. One story expressed how “young smokers incorrectly believe roll-your-own cigarettes are less harmful than traditional factory-made cigarettes” (SBS News). In this instance, what could have passed as a straight take on a market trend for RYO cigarettes turned out to be aimed at scaring young smokers away from all tobacco use using what may or may not have been a legitimate boost in RYO as a backdrop. The story cited a survey of 4,000 adult users by the Victorian Smoking and Health Survey. Of those 4,000 people, young adult smokers aged 18-29 comprised 43% of the surveyed group and half of those were said to use RYO. Postscript, while the young adults said they rolled their own cigarettes, what was unclear was whether they did so exclusively or for long periods and whether or not they had simply tried RYO once or twice. For that matter, it wasn’t clear whether they were even using it in combination with cannabis, which is another marginal trend among certain demographics in America.

On the other hand, the same article did include a more plausible economic explanation for RYO use, which is that the relatively inexpensive nature of RYO makes it a desirable alternative to packaged cigarettes–something that has often been said for RYO and that continues to be true today. 


July 24, 2018

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