Last month, I made my second visit to Dortmund, Germany for Inter-tabac 2013, the main international tobacco trade show. For those who have been to Inter-tabac, there’s an easy way to describe it: much different. While there’s not an immense amount of new product introductions and the buying is hardly at the pace of the IPCPR trade show and convention, I still think it’s easily amongst the three most important trade shows in the industry, behind the Tobacconists Association of America convention, and only gaining in importance. Rather than trying to tour the show as we’ve done annually with IPCPR, I’ve decided on broader thoughts and the basic differences.
Dortmund is a wonderful city—also home to my favorite soccer team for those of you that are interested—located in the state of North Rhine-Westphalia, meaning it falls near Germany’s western border with the Netherlands and Belgium near the latitudinal border between the two countries. If you are coming to Dortmund from the U.S., you are likely to get there by one of two ways: either by flying into Düsseldorf, located less than an hour southwest of Dortmund, or by taking ground transport from a neighboring countries. For those in the latter, usually it’s because they have been in European for a few days doing events. In my case, I’ve taken the train from the Düsseldorf airport into Dortmund or the neighboring city of Essen where I stayed this year. Honestly, it’s only a handful of minutes longer compared to a taxi in no traffic, and at a fraction of the cost.
Inter-tabac has been held at the Westfallenhallen for some time, although that could change soon. It’s a sprawling collection of buildings located next to Signal Iduna park, the seventh largest soccer stadium in Europe. Like the stadium, the Westfallenhallen is gigantic—over a half million square feet in floorspace—big enough that over the past two years in addition to Inter-tabac the space has played host to a trucking show, an Oktoberfest celebration and what appeared to be an education conference, all at the same time.
Because of smoking laws passed in the state, the trade show was forced to receive an exemption to allow smoking in the Westfallenhallen. It received this, which was met by threat of protest and some evidence of actual protest, although it seemed minimal. This has put the show’s fate in Dortmund in jeopardy and it appears there is a very real possibility it will move into another area of Germany without these smoking laws.
But enough about that.
Without doing any sort of official measurements myself, I would make the case that Inter-tabac is larger and more attended than the IPCPR trade show. According to both parties, there’s evidence to suggest that: IPCPR claimed over 250 exhibitors in more than 300,000 square feet to Inter-tabac’s 350 exhibitors in over 30,000 square meters, or roughly 325,000 square feet. The physical difference is the European show is much more spread out due to the fact that it is in multiple halls with larger and more logical walkways than the U.S. show.
If you stopped reading there, you might be left with a much different impression of the show. Where I would venture to guess that close to two-thirds of the space at IPCPR is occupied by premium cigars, Inter-tabac is a tobacco trade show. Cigars account for what is probably around 20 percent of the space at Inter-tabac, the rest is filled by cigarettes, smokeless, e-cigarettes, pipes, hookah and then some other bizarre things. It creates a much different feel, one that I tried to capture with the pictures.
Another massive difference is that at Inter-tabac, the distributors play a much larger role. Manufacturers like Arturo Fuente and Drew Estate have their own booths, much like at IPCPR, but in a much different form, most of the company’s sales might be done elsewhere, in the booths of the German, Dutch and other distributors. It’s an interesting dynamic, but one that leads to the third difference regarding the show.
Sales are some times secondary to relationships. For many of the U.S.-based manufacturers, the cost of attending Inter-tabac is not covered during the three days of selling, it’s a net loss. Rather, Inter-tabac is more about making the relationships in the variety of countries around the world—not just in Europe—that attend the show. While there’s a strong contingent of German and Dutch retailers, there isn’t a consistent flow of much else as far as retail buying is concerned. If you need any evidence of this, Christian Eiroa of Fabricas Unidas was actually in Europe the week before Inter-tabac started with plans on attending the show. His sales representative in the Washington D.C./Virginia area resigned while in Europe and Eiroa flew back to the States, missing the trade show, because the sales in the region for that month likely would have eclipsed the sales for Europe for most the year.
Eiroa, a relatively new company, is not every company. Oliva, Padrón and others have made massive inroads in some European markets and Joya de Nicaragua’s European business is said to be beyond sizable, close to half of its annual sales.
There’s also one booth that’s noticeably present at Inter-tabac, 5th Avenue. For those that are unfamiliar with the name, it’s the German distributor for Habanos S.A. and the company has a massive two-story booth at the trade show. It’s the literal elephant in the room when describing the difference between the trade shows and the markets between the U.S. and Europe.
It’s clear that inroads are being made by the non-Cuban brands across Europe and one of the main reasons why is because of the growing frustration with the Cuban cigar business by both retailers and consumers. While some fare better than others, many retailers are seeing their customers get tired of the rising costs of Cuban cigars and looking for other alternatives. This in turn is leading people to try non-Cuban cigars—oftentimes the biggest hinderance to the success of these brands—and in turn, Habanos S.A.’s market sharing is falling in many regions.
The increased innovation, lower price points, consistency and taste are what I heard over and over; and a lot of that makes sense. There’s also an interesting us vs. them attitude present with many, one that seems wanting to take down the dominance of Habanos S.A.
I have no idea about actual attendance figures and I honestly don’t know how much they matter given there seemed to be little tracking of these things on a daily basis at both of the world’s largest trade shows. What I can tell you that is surprising to me, even as I sit here and write this, is that there was substantially more press. This includes both tobacco-centric and general press, the former of which is shocking, given that a professional venture like halfwheel is illegal in many of these countries due to advertising laws regarding tobacco.
As for it on a larger level, attendance seemed up in Dortmund and that—and a football team—makes me wish it stays at the Westfallenhallen. If you ever have the opportunity to attend, I can’t recommend it enough. It’s a different show, a fun show and a great one. It’s also one that is getting more important for U.S.-based companies each and every year, and that’s there were more principals from U.S. companies compared to last year, a trend that’s been going up in Dortmund for the last few years.