Typically, the question everyone asks after each International Premium Cigar & Pipe Retailers Association (IPCPR) trade show and convention is “What’s new?” This year was no different but the biggest news to emerge from the biggest trade show gathering of the premium cigar and pipe retailers association this year was that the IPCPR as we know it is changing.
It was perhaps the worst kept secret of the industry, in part brought on by the “tease” a week prior to the show that led to a week’s worth of leaks and discussions about the pending changes set to hit the premium cigar and pipe industry’s most prominent trade association. On June 28, 2019, the IPCPR’s executive director, Scott Pearce, formally announced that the IPCPR would from here on be known as the Premium Cigar Association (PCA). At the start of the news conference, Pearce tackled the question of why the rebranding was necessary and why they chose now to do it.
“The political and regulatory landscape has changed tremendously. The new universe demands that we as an organization and an industry start going forward with a forward-thinking approach that doesn’t solve the problems of today or of yesterday but really provides us with an absolute platform in order to solve the problems going into the future. Because unless we start doing that, we won’t be able to plan out a trajectory of growth or sustainable growth in the industry for the next 10, 15 or 20 years. We’re always going to be reactive,” Pearce explained.
From there, the board examined the question of how it could provide more value to its members, including its retailer and its manufacturer members. The changes were designed to help all of its members make more money, do its business better, decrease costs, and ultimately boost profits. The group worked with an outside agency to come up with the new name change which was chosen to make the organization’s focus clearer to those outside of the industry. Pearce told the story of someone on Capitol Hill who mistakenly thought the organization was a health group, confused by the “CPR” part of the association’s name.
“Our rebrand, our name, what gives us credibility on Capitol Hill right now, our name needs to have a stature and credibility larger than what currently exists,” explained Pearce.
The new logo strips away the recognizable Native American Indian in place of a multi-colored tobacco leaf. Pearce explained that the dark green in the logo represents the tobacco fields and factories where the tobacco is grown and harvested; the deep browns represent where the tobacco is cured; the gray is the ash. The division of the logo into threes represents when the organization was first launched in 1933. The new name and the logo were settled on with the purpose of being a very striking and sharp organization that would help communicate to policy makers what the organization is about and what its focus is. This modernization of the association was designed to help them protect and grow the premium cigar and pipe tobacco industries through innovation, education, advocacy, market research, and the facilitation of business relationships.
Defense of the Industry
Pearce used a football analogy to demonstrate how the organization must go on the offensive in order to win in today’s political climate. He explained how the association focuses on every state but how this approach is costly and requires more funds to properly fight and win.
“We want our stories and our advocacy to reverberate and echo in the halls of every state capitol–your stories of small business, what you do for your community, how you give back to the communities and the jobs and taxes that you pay is all critical. It’s all stories that move the needle,” said Pearce.
In August, the association is launching a new PCA Foundation for research and education as a way to produce more data that helps in the group’s efforts. On Sept. 5, 2019, the PCA has its first Black Caucus with legislatures where the association will host these lawmakers in its townhouse and educate them on cigars and what’s needed to help them. The PCA will also hold a Casino Night fundraisers later in the year to raise money for its PAC initiatives.
A Full Service Organization
In October, PCA will hold an in-person workshop at its townhouse that will evolve into a roadshow that will continue in Dallas later on. In 2020, PCA will also launch an online learning platform for retailers, their customers, manufacturers and sales reps with trackable training on topics that include inventory control, finance management, customer sales and service, age verification and FDA compliance.
PCA will have a new website that will launch in September 2019. The new website will include tools and resources, including the buyer’s guide that replaces the old Almanac that many are accustomed to. This new buyer’s guide will reportedly included up-to-date product and sales representative details so that retailers will easily be able to get the products that they need for their stores with ease. PCA will also be producing more white papers that cover best practices and standards. There will also be a blog that will facilitate in the sharing of stories and vital information. Industry and legislative news will also be part of the new website, making it a one-stop for retailers and manufacturers.
The organization is also launching its own bi-monthly publication, PCA: The Magazine, with the intent of becoming the Harvard Business Review for cigar retailers and manufacturers. The new magazine will focus on best practices and examples from both inside and outside of the cigar industry.
CigarCon
Perhaps the most jarring change announced was the introduction of a consumer day to the trade show, known as CigarCon. Pearce explained the necessity of including consumers in the reboot of PCA, expanding the organization’s focus which has been primarily fixed on retailers and manufacturers up until now. CigarCon is described as the the ultimate man’s weekend–cigars, spirits, food, keynote speakers and other parallel luxury industries. CigarCon is part of PCA’s effort to revitalize the trade show and offer more value to retailers and manufacturers who are attending and exhibiting each year.
“CigarCon allows us to active the consumer base and connect it to the industry in a way that does not exist anywhere else,” said Pearce. “It’s going to catalyze growth for the industry and it’s going to provide a platform for a massive opportunity for telling our story.”
The PCA plans to use consumers to show them a different side of the premium tobacco industry and use them to help differentiate cigars from other tobacco products. Consumers also offers the PCA a new revenue stream and a new audience to tap into in order to drive growth for the trade show and it’s attendance numbers that are constantly scrutinized–and criticized–each year. All profits from CigarCon will reportedly go toward the PCA’s regulatory and legal fights. CigarCon’s intent is to drive more consumers into the retail stores by exposing them to all of the different brands and products that exhibit at the trade show each year. The exact details of CigarCon are still be worked out, including the pricing tiers, the manner at which they will get cigars during the event, how they will be reached out to and more. Pearce made it clear, however, that consumers will only have one day to take advantage of CigarCon; the trade show will follow for three days afterward and will be held for full days rather than ending on a half day as it has in years past.
“This is not about the commodity of coming and getting a bunch of cigars. This is about the experience. This trade show floor provides us the opportunity to create a platform that gives us the trajectory that we need to grow for our industry in order to have influence to continue on the fight but also the possibility of growing the consumer base and welcoming potential new customers into this industry,” says Pearce.
Scott Regina provided more insight into how the new consumer day will fit into next year’s trade show. Friday will continue to be a seminar day. That night will include a V.I.P. experience and Industry Awards Night to kickoff CigarCon. Saturday will be open to consumers and will allow them to walk around with retailers to see the booths and new products on display for about six hours. The PCA is looking into an app or other form of technology that will allow the consumers to take photos or track the products they are interested in and send that data back to their retailer to use during the trade show days to inform their purchasing decisions. There will be an opening party later that night but unlike in past years, it will be open to everyone–retailers, consumers, and manufacturers. The next three days will be three full days–eight hours–for business. Consumers will not be allowed on the trade show floor during these three days of business.
“We all know that the IPCPR, this organization, this convention, needed to change, and things needed to happen. The idea of bringing consumer day in has been talked about many, many times over the years and I think it’s important to realize that this is a chance for us as retailers to have a next-step engagement with our retailers and provide them something,” commented Phil Ledbetter, part of the PCA board.
“One of the hardest things in our industry is being able to grow our categories,” added Rocky Patel, president and founder of Rocky Patel Premium Cigars. “We have shows like the Big Smoke, we have the Rocky Mountain Cigar Festival, we have CigarFest; some of these tickets are sold out in 12 minutes. People are hungry for information. They want to learn, they want to meet. We spend tens of thousands of dollars building these beautiful booths–small manufacturers, medium manufacturers, large manufacturers. Now they have the opportunity to see the new products, the new blends, learn about how we get all the different tobaccos, age the different tobaccos, ferment the tobaccos, make these cigars. They are going to take this knowledge and bring it back to you. When they come back to your stores they’re going to want to buy these brands. It’s going to be an amazing thing–it’s going to be the world’s greatest show.”
“This is a chance we have to really bring excitement back to this industry,” added Christian Eiroa, president and founder of C.L.E. Cigar Company. “I know a lot of people are worried because who likes change? The only thing we like to change is our underwear, but beyond that, nobody likes to change anything. Let’s go for the change! I know it could work; I believe it could work. I know it could raise a lot of money for this industry as well.”
Analysis
As Rocky Patel pointed out, the organization has spent nearly $3.6 million this year alone in legal fees. A trade organization like the PCA is important to the vitality and future of premium tobacco industry and all of the businesses that operate within it. Change is inevitable and often times necessary in order for progress, thus the rebrand is a proactive step in ensuring the PCA continues to have a part in the premium cigar and pipe tobacco industry.
Those attending this year’s show, however, seemed to feel overwhelmed by the number of changes announced and the manner of which the news came out. The name and logo change didn’t seem to phase too many, though it did leave some in the pipe tobacco industry wondering what their future was within this organization. While Pearce assured those attending on multiple occasions that the PCA would continue to represent the interests of the pipe tobacco industry, the rebranding seems to subtly erase this category from the organization and in turn treat them as a bullet point in the fine print of the organization’s focus.
The expansion into the consumer category was the topic of conversation among many retailers and manufacturers throughout the show. As Patel, Regina, and Eiroa all pointed out, the only way to grow the industry and ensure retailers and manufacturers have a future is to gain new customers. Tobacco use is on the decline overall as vaping, e-cigarette use and marijuana and CBD all continue to grow. Premium cigars, and pipe tobacco, are all very niche. The only way the industry will grow is if it gains new cigar and pipe enthusiasts. Including consumers in the PCA’s overall strategy is smart, but presents some issues for PCA’s current base.
Retailers are pressed for time. Do they have the time and interest in playing chaperone to their customers for a 1.5 day event? There are plenty of consumer-focused events already held across the U.S. each year where the primary focus is indeed getting and purchasing cigars. As it is, CigarCon will be more of an experience than a buying opportunity. Consumers may walk away with some cigars but for the most part, CigarCon gives them access to the industry’s biggest trade show and as it is now, gives them the coveted first day of the trade show to simply walk around and provide feedback to retailers. No business can be conducted until the later half of this event, taking away a very profitable day for manufacturers and preventing retailers from doing what they are coming to the trade show to do–buy and conduct business.
In its reboot, the PCA has to do a better job of being transparent and promoting what it’s doing to help its members beyond the trade show each year. Manufacturers and retailers must understand and see where how their investment in the organization and the trade show truly benefits them. With the Internet, mobile phones and how business is conducted today, a retailer can easily have access to a deal any time of the year, any day and at any hour with a simple email or text. A new product is released and that news is already spread and dispersed among the many different media outlets. The addition of a consumer day, while it may bring in some additional profit, will not solve the problems faced by the PCA in its previous iterations as the IPCPR and RTDA. How does it grow its retail base? How does it increase attendance for the actual trade show? How does it become a viable resource and partner for its retail and manufacturer members throughout the year? How can it make the trade show less expensive for manufacturers and the attending retailers?
If the rollout of the announcement and the handling of the questions that followed showed anything it’s that the PCA has some communication work to do. All paying members–whether they are part of the board or not, regardless of how many dollars they are spending, regardless of how long they’ve been in the industry–must be reached out to and heard for the PCA to experience any form of success and for CigarCon to work. There were many manufacturers and retailers who felt slighted by the changes, perhaps not because they were big changes but simply because they had not been reached out and thus felt their opinions had not been heard. The premium tobacco industry is built on relationships–those relationships are founded on trust, on sharing of information and banding together in booms and prosperous times and in times of great duress and challenges. The PCA’s future isn’t contingent on how successful an added consumer day is. The future of the PCA is on how successful it can bring together the many different businesses and voices in the premium tobacco and speak for them on Capitol Hill and in cities across the U.S.