SMOKES GET IN YOUR AISLES

Specialty stores aren't the only place where cigar aficionados can get their favorite stogie. Kroger, Harris Teeter and many other retailers are also carrying the premium brands.Savvy retailers are capitalizing on what's become the fastest-growing area of the tobacco industry. Though some chains have offered packaged cigars for years, many are now getting into the premium hand-rolled end of the business.

Specialty stores aren't the only place where cigar aficionados can get their favorite stogie. Kroger, Harris Teeter and many other retailers are also carrying the premium brands.

Savvy retailers are capitalizing on what's become the fastest-growing area of the tobacco industry. Though some chains have offered packaged cigars for years, many are now getting into the premium hand-rolled end of the business. SN has seen everything from 4-foot shelf displays to walk-in humidors.

All of this is in response to the booming cigar business. Cigar consumption peaked in the early 1960's, and decreased through the 70's and 80's. But thanks to glamorization of cigar smoking, consumption has rebounded during this decade.

And supermarkets have reaped the benefits, experiencing a 9.3% sales jump to $97.3 million for the 52 weeks ended March 8, according to ACNielsen, Stamford, Conn.

In a recent visit to the Atlanta area, SN noticed that several new stores, including Harris Teeter and A&P, have humidors.

Harris Teeter on Holcomb Bridge Road in the suburb of Marietta, Ga., has a humidor in its wine department. The 4-foot humidor has four shelves, each of which carries about seven different cigar brands. Selections include Manifesto Corono, which sell at $5.39 each; Te-Amo Gran Piramides, $5.69; Leon Jimenes, $7.69; and Arturo Fuente, $5.39.

A new A&P on Old Milton Parkway in Alpharetta, Ga., has a humidor in the front of the store. It contains six shelves, each of which holds about five different brands. Selections include Don Tomas Cetros, which sell at $5 each, and Siglo 21, $5.50 each.

The most impressive display in the Atlanta area is a walk-in humidor at the two-level Harris Teeter in Briarcliff, Ga. The humidor, which is about 25 square feet, is located on the store's second floor, adjacent to an impressive wine department and near a kosher store-within-a-store section.

The humidor has two connecting wall units, each of which has five shelves. About 80 different brands are offered, including Dunhill, which retails for $9.99 each; Te-Amo, $5.49; and Royal Jamaica, $3.99. Santa Clara and Ashton selections are also offered. The humidor is kept at 70% humidity and 70 degrees Fahrenheit, a store associate told SN.

Along with cigars, the humidor holds several bottles of fine wine. The door to the unit is signed "Fine Wines and Tobacco."

Walk-in humidors are planned to be installed in all new Harris Teeter stores, according to Howard Price, the chain's manager of mechanical systems. Price's comments were made at the Energy and Technical Services Conference, held last month in California. Harris Teeter officials declined to comment on the chain's cigar business, saying the department was just taken over by a new manager who didn't yet have specifics on the program.

Other areas of the country are also getting involved in cigar merchandising. For instance, over the last eight months, Associated Grocers, Seattle, has installed humidors in 20 of its 33 Thriftway stores. The company hopes to have them in all its Thriftway stores eventually, said Bob Broderick, beer/wine/cigar buyer for Thriftway.

"We identified a market for premium hand-rolled cigars and found that it worked well," Broderick told SN.

Thriftway's humidors vary in size, depending on the store, but average about 6 feet high by 4 feet wide. Each holds between 20 and 40 different types of cigars. Retail prices range from $2 to $20 per cigar.

The stores stock well-known brands like Macanudo, but Broderick also buys many of the newer names. "In the cigar business, there's lots of opportunity for new brands," he said.

The question of where to put humidors is not easily answered. The customer service desk, wine department or a front-end endcap are all possibilities.

Though it formerly had some of the humidors in its wine department, Thriftway now prefers to keep them near the customer-service desk, where store personnel are more accessible to oversee the unit.

Palisades Market, Lake Oswego, Ore., meanwhile, has a 4-foot-by-6-foot humidor near the checkout. Palisades is a new upscale supermarket owned by Lamb's Wilsonville Thriftway, Wilsonville, Ore., a member of United Grocers, Portland, Ore.

"Having it by the checkout is a great area," said Mark Wood, Palisades' assistant grocery manager. "It adds to our impulse sales."

In just two months, Palisades sold 20 cases, each of which holds between 10 and 25 cigars, according to Wood.

Palisades' humidor holds about 22 different brands, including Macanudo and Don Tomas. Retail prices range from $3.49 to $16. Packaged domestic cigars are merchandises on a bottom shelf of the humidor

Palisades just launched a "Cigar of the Month" program, under which a certain cigar is promoted. As part of the program, Wood offers literature that gives information about the brand, such as how it rates and what kind of "smoke" it is.

Woodman's Food Markets, Madison, Wis., is in the midst of rolling out a cigar program. Cigar humidors are currently in four of its seven stores, and will be added to the remaining three in the next three months, according to Gordie Whipple, buyer/supervisor of the beverage department, where cigars are sold. Each store sells about 60 cigars every week.

The humidors, which debuted last month, are about 6 feet long by 6 feet high. Each holds about 20 different types, including Dunhill and Fuente.

Mana Corp., Bentonville, Ark., is one of many vendors offering retailers humidors and cigars. It recently helped roll out a program at Metro Basics Food Market, Baltimore, a division of Richfood Holding, Mechanicsville, Va., according to Rick Sherman, vice president of tobacco.

Metro has already put humidors in seven of its 26 stores, according to Sherman. Two additional displays are slated to be installed by next week. Officials from Metro Food did not return phone calls from SN.

Each display holds 2 feet of cigars and 2 feet of accessories. Between nine and 12 different brands, which carry retail prices ranging from $1.99 to $10, are offered.

"The growth has been phenomenal. And it's just beginning to take off in grocery stores," Sherman said.

As for maintenance, retailers polled by SN said humidors are relatively easy to maintain. While it's necessary to put water in it to maintain 70% relative humidity, Broderick said Thriftway's units are virtually maintenance free.

"It's not hard to maintain, but it's something that you constantly need to be aware of to make sure that there's enough moisture and the temperature is OK," Wood of Palisades added.

Of retailers polled, most said the premium cigar boom has not cannibalized sales of packaged cigars.

Sherman of Mana agreed. "In this market, you can attract the average customers looking for a 25- to 75-cent packaged cigar, but will want the $1.99 to $2.99 for the weekend," he said.

But not all retailers are jumping on the cigar bandwagon. Dorothy Lane Market, Dayton, Ohio, recently considered merchandising cigars, but decided against it, said Tom Winter, director of merchandising.

"As a company, our thrust is about eating healthier. We sell all-natural beef and free-range chicken. Cigars don't fit in with those kinds of products," Winter told SN.

Health concerns are also why some health advocates want cigars to be included in the stiff new Food and Drug Administration tobacco rules.

Several states are already beginning to crack down. Massachusetts lawmakers, for instance, are pushing for new warning labels on cigars, which don't carry the federal health warnings mandated for cigarettes. And in California, a recent TV ad was aimed at the "deglamorization" of cigars. Also, Alaska, Oregon and Utah reportedly have raised cigar and other tobacco taxes.