Pipe Tobacco and Big Business

hearth home jpgWe were talking here recently about why smaller boutique brands have been thriving in the pipe tobacco category while some of the mass-market brands are stagnant or declining, and one reason seems readily apparent. For boutique manufacturers and larger companies who make pipe tobacco and little else, pipe tobacco is very important to their survival. But for companies that make cigarettes and other high-volume tobacco products, pipe tobacco represents a very small amount of their business. What they don’t understand is that, even though the volume seems low to them, their products are important to a lot of people. I know it’s a numbers game, but it’s a problem for a lot of people who have smoked the same brand for years, if not decades. When the numbers decline enough, these big companies just kill off the brand. Smaller companies could probably come up with a reasonable replica of these tobaccos, but they might not be able to handle the volume if people liked the new blends, or because of their small size, their versions might wind up being much more expensive.

One of the other problems is that the bigger tobacco companies  don’t want to have to deal directly with small tobacco shops and convenience stores. Their orders wouldn’t even be a blip on the radar. So these companies only sell their products to local distributors who then sell to the stores. The problem with this business model is that the distributor has to make a profit, so the price to the store is going to be higher. Additionally, built into the pricing is the cost of transporting the product to the distributor and the cost of trucking or shipping the product to the stores, so those blends that used to be very affordable are now more expensive than similar bulk tobaccos. The consumer now has to decide whether to continue enjoying their favorite or compromising by buying something they don’t like as well, but is more cost-effective.

During our conversation, we tried to come up with a solution to this. We have a pretty unique business in that we create a lot of our own products by working closely with our business partners and developing some new items to fill a void. So we looked at a bunch of OTC blends that were discontinued this year and a couple of products that were pricing themselves out of the market. We contacted one of our suppliers and discussed the issue with them and felt that we had the perfect answer. We would work together to duplicate these blends and to sell them direct to the public to eliminate the middleman, making the blends more affordable. I got involved in creating some of the items, and we feel that we’ve gotten really close with the blends. We wanted to keep things familiar, so they will be sold in plastic tubs. We’re figuring out costs right now, but I think that we’ll be able to offer them to you for less than what you would have paid before for the similar items.

They will be sold as a whole new line of Hearth & Home tobaccos and will roll out early next year. The partner who will produce them for us is big enough that if they’re as successful, or even more successful than we hope, they can definitely keep up with production, and we can keep the costs low. One of the most rewarding parts of what I do is helping to solve problems, and I think this is a good example of how we can better accommodate our customers. We’ll keep you updated, but you will also see them featured prominently in our January catalog.

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About Russ

Russ Ouellette is the blender/creator of the Hearth & Home series of tobaccos for www.pipesandcigars.com in Bethlehem, PA. He has been a pipe smoker and blender for over 30 years, and enjoys feedback from the pipe smoking public. You can reach Russ at russo@pipesandcigars.com or by calling 1-800-494-9144.