InterTabac 2022: Day 3

I made it to the trade show shortly after the doors opened and quickly headed over to the Wolfertz GmbH booth to get information on some new products that I’ll cover in a post tomorrow. After that, I tried to see as many people as I could, knowing that my day would be cut short.

One of the more productive things I did was talk to some German retailers, which really helped to give me some insight into how things are going in Europe, but from a much different perspective. In short, things are going well though inflation is worse in Europe than here in America, there are concerns as to what the winter and the need for non-Russian gas will do to make it worse, and of course, the market is a bit weird because of the lack of Cuban cigars. That said, I feel like most of the retailers who are likely to attend InterTabac are probably ones that are reliant on more than just Cuban cigars, so perhaps some of this attitude is a self-selecting sample size.

I strolled by some of the smaller booths and continued to see people very busy. Stefan Lampert of Lampert Cigars was once again in a meeting; I tried to talk to the people at Fox Knives, but they were busy; and Oscar Valladares’ booth remained swamped. Speaking of Valladares, his eponymous company just opened up its warehouse in Germany. It reminded me of more than a decade ago when I learned that Oliva was opening a warehouse in Europe, something many of its competitors scoffed at and deemed unnecessary. It turns out, that was a smart move and I imagine the same will be true of Valladares’ decision.

That said, there are major concerns for Europe going forward. Track and trace will be required for cigars sold in the European Union by the end of the year, another part of the EU’s strict regulations for tobacco sales. Track and trace require each tobacco product to get a unique ID code that will track the product from manufacturing to point of sale. Proponents of the system say that it will reduce illegal and illicit sales, though I suspect more of that will be done indirectly. It’s been interesting to ask various companies about their preparations for track and trace as the cost of the software needed might fully eat into the profits for some smaller distributors. This is supposed to be handled by the distributors themselves and not the manufacturers, which I imagine isn’t the most cost-effective way, but I’m rather naïve about the fine details of the system.

Track and trace won’t be the end of EU regulations. At some point, there will be another Tobacco Products Directive from the European Union, one known as TPD3. While I suspect much of the energy regarding TPD3 will be spent on vaping products, it’s unlikely cigars will go unscathed. In the most basic terms, the European Union will agree to a floor of regulations and member countries can choose to have even more restrictions. For example, plain packaging is not required in the EU, but Ireland—an EU member—introduced plain packaging in 2017/2018.

Unfortunately for cigar smokers and sellers in the EU, there’s not a U.S.-style court system that is angled towards rolling back the tobacco regulations passed by legislatures, meaning the regulations are almost certainly going to get worse. At InterTabac, there were numerous panels hosted about a number of topics, including the regulatory environment.

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Earlier today, Westfalenhallen Unternehmensgruppe—yes, that’s the name—announced the attendance for InterTabac 2022: 12,100 visitors, about half from Germany and half from elsewhere. That is a 12.3 percent decline from 2019, which feels about right given my general observations on the trade show floor. While the number was down compared to 2019, InterTabac remains the largest tobacco trade show that I know of, and I don’t think it’s particularly close, though some vaping/e-cigarette trade shows are larger from what I understand.

While I’m not overly concerned with the drop in attendance, I do think the ratio of attendees to exhibitors is concerning. While there was a decline in attendance, there were 100 more exhibitors—a 20 percent increase—and the ratio of attendees to exhibitors went from 27.6 people per exhibitor to 20.17 for 2022.

What I can say is that people generally looked busy most of the time I was on the trade show floor, something that wasn’t the case when I went to my first InterTabac in 2012. Given that so much of the trade show is focused on things other than cigars, perhaps the cigar side had an even better year than 2019, while the rest of the trade show suffered. It’s not clear, but I definitely think InterTabac remains in a very good place.

The video above shows a quick walk through Halls 4 and 7, the two halls that contain most of the cigar-related booths. If it’s not immediately clear, here are some things that stand out, though I’m not sure that many of them are unique to this year’s InterTabac:

• The trade show looks a lot nicer — The booths and the trade show itself look very nice. You can’t see it in this video, but a lot of the booths have full wet bars, some have multiple bars and many booths—Drew Estate, Vandermarliere Cigar Family—have things like dishwashers to clean glassware, something that’s an extreme rarity at the U.S. trade shows I’ve attended. Furthermore, a lot of the larger booths have servers that will come and bring drinks, clean ashtrays, etc. I’m curious to know the costs of these things, but I suspect they are much more reasonable than they would be in the U.S.
• The hallways are constantly busy — There are always people walking by, which gives a different feel to the trade show. The consistent flow of people gives an energy that is far better than most trade shows.
• People dress a lot nicer — Sure, I’m in a sweatshirt, but I’m in the extreme minority. If you want to dress to fit in, expect to be in a suit—ties are optional—or something similar. Yes, this is also a trade show where you’ll see a person dressed in a full gimp suit (2012) or a woman with a horsehead mask and booty shorts (this year)—but for the most part, it’s much more professional.
• There are fewer retailers — This is something you can’t really see on video. I’m not sure if that’s a good thing or a bad thing, but it’s a different thing compared to the other trade shows halfwheel covers.

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InterTabac remains my favorite trade show, not for the reasons above but because it’s always been a place where I can sit down with people and have extended conversations that I don’t feel like time permits at the PCA Convention & Trade Show and, to a lesser extent, at TPE. Years ago, that was more or less the reason I went—talk to Americans who I struggle to talk to at trade shows in the U.S. But over the years, I’ve also met a lot of people from international markets and find myself talking to those folks about as much as I talk to Americans.

We’ve been fortunate to have our audience grow every year at halfwheel, but the growth outside of the U.S. is outpacing the American growth. Five years ago, our traffic was 83.3 percent American, that number is now down to 71.2 percent.

In that same five-year span, our traffic in Germany has doubled, the Netherlands is up 125 percent, Australia is up 144 percent, and the U.K., 167 percent. France and Sweden are up roughly 84 percent in the same time period.

And then there is China. Our traffic in China is up 3182 percent in five years. Yes, it’s nearly 33 times what it was five years ago. China went from our 14th ranked country in terms of visitors to the second, now roughly 6 percent of our audience, the only time a non-U.S. country has cracked five percent of our audience.

We don’t have a WeChat platform, meaning I know our traffic in China could be a lot greater. And that’s probably how most companies at InterTabac feel: if only we could do business in mainland. It’s the next frontier for everyone in the business, but whether you are a cigar blogger or a cigar factory, the issues are basically the same. It’s a massive market, one that is by all accounts growing, but it’s also one where government regulation and laws make it the most tedious to enter. Even once you get into China, there are concerns about intellectual property for the longterm, but if you get in with the right circumstances, the sky is the limit.

I hope InterTabac makes serious inroads into trying to make it easier for its attendees to do business in China. Whether that’s seminars, official delegations, etc., it’s a glaring frontier but one that remains out of reach for most.

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Those familiar with German soccer and my bio on halfwheel will recognize that I am a Borussia Dortmund fan. When I went to InterTabac 2012, I was told that I should go across the street and take a tour of the soccer stadium because it’s massive and really the only reason why most Americans—or non-Germans—would know anything about Dortmund as a city.

After returning to the U.S., I casually checked in on BVB and remember tuning into to watch the second half of this game. Ever since then, I was hooked. I loved Dortmund’s exciting brand of soccer, I felt an unearned connection to the city and I loved the underdog nature of BVB.

Most Saturdays during August-April, I wake up to watch Dortmund play. I’ve seen them play on broadcasters such as GolTV and Bein as well as more common names like Fox and now ESPN. I’ve seen Dortmund play in Munich, I’ve seen Dortmund play in Charlotte, and yes, I’ve seen Dortmund play at the Westfalenstadion.

Each year, I check the schedule to see if InterTabac overlaps with a Dortmund home game; if it does, it’s a must to find a ticket to go to a game. This year, my heart skipped a beat.

Schalke.

There’s no real way to explain to those who don’t watch soccer what the Revierderby is. A derby is a rivalry game played between teams that are neighbors. For Americans, imagine the Iron Bowl (Alabama-Auburn), Red River (Oklahoma-Texas) or to a lesser extent, the Subway Series (Mets-Yankees). But the importance is just different in European soccer. In America, football is the most popular sport but the other sports receive plenty of attention; if American football is king, European football might as well be a deity. Furthermore, the clubs are also much more local and smaller cities can have professional teams that compete at the highest level.

For Americans, imagine if 85 percent of the NFL teams were more or less the Green Bay Packers: the one professional sports team in the area and owned by the fans. At a very elementary level, that’s German soccer.

Dortmund and Gelsenkirchen, where Schalke is located, are about 20 miles apart by car. While there are other clubs located in between them, these are two of the largest clubs in Germany and it’s one of Germany’s greatest rivalry. Because of Schalke’s relegation (lol) and COVID-19, it’s been nearly five years since Dortmund last hosted Schalke at home with a crowd. As soon as I saw the schedule, I knew this would not only be a rare chance at attending one of the few events on my sports bucket list but also one of the coolest times to see it. Outside of the COVID-19 pandemic, I don’t think there’s ever a way to get a subdued Revierderby, but this would be one where some pent-up emotion would be let go.

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At 9:30 a.m. I headed to the stadium to acquire a card that would allow for me to purchase food and drinks inside the stadium, the riot police were already assembling. At 1:50 p.m., I was told by German police that the pedestrian bridge I had used to get between my hotel and the trade show each day was no longer accessible to me because of the color shirt I was wearing. At 2:30 p.m., I waited as riot police escorted Schalke fans into the game. At 5:50 p.m., I was told by a different German police officer that I couldn’t walk where I was walking because I was in an area reserved for the supporters of the losing team to exit the stadium.

Dortmund won, 1-0; Marco Reus’ injury is not as bad as it looked; and I got to attend a sporting event where the beer is cheap, the fans loudly sing songs in the bathroom, and where smoking is still allowed in the stands. Even if you aren’t a fan of soccer, I’d recommend attending any game at Signal Iduna Park. If you are ever lucky enough to get tickets where Schalke is involved, don’t say no and don’t wear blue.