TPE 2024: Day 3

My main takeaway from TPE 2024 is that premium cigar retailers have too much inventory.

It didn’t take three days of roaming the Las Vegas Convention Center to figure that out. It took about 30 minutes. Early on Wednesday, when I heard my first complaint about retailer attendance, I was told by an executive of one of the larger cigar companies that his salesforce wasn’t having much luck getting retailers that weren’t at TPE 2024 to take advantage of the show deals that were being offered to them. That, combined with comments I’ve been hearing for the last two months or so, seemed like enough.

While my views were colored for the rest of the show, I continued to ask most of the exhibitors I saw about their sales. Some newer brands said they were having great sales numbers, others expressed that certain days were great—it seemed like Thursday, Day 2, was the best—but the general refrain was similar. When I asked people what happened when they offered the deals to retailers that weren’t in Vegas for TPE, the response was similar: not a lot of bites.

For years, I’ve argued that it doesn’t make sense for a cigar company—especially ones with national sales teams—to fly their staffs to Las Vegas, rent expensive trade show booths that function as sales offices, and sell (the same) cigars to (the same) customers that they sell to the other 51 weeks of the year, only at a discount.

The COVID-19-related sales bump of the last few years has masked the gross inefficiency of this system, but as evidenced by the above, that sales bump has cooled off while imports remain quite high. Perhaps we are finally going to have to address it. Whatever the case, this system has been broken for quite some time, it didn’t just happen last week.

That is not to say that TPE is broken. Walking past the cigar section on TPE’s lower hall revealed a fairly vibrant array of booths promoting vape products, mushrooms, kratom, nicotine alternatives, every possible marijuana alternative (CBD, Delta 8, etc.), some likely not alternative marijuana products, and pretty much anything else you’d expect to see at your local vape or head shop. Upstairs—a separate trade show floor—was even more vibrant and had even more of these companies, as well as a completely separate trade show called Glass Vegas.

I am baffled as to how there is a demand for this many companies seemingly selling more or less the same Chinese-made vapes, but perhaps it is a microcosm of the whole thing: premium cigars are quite small in the world of things people puff on. Premium cigars sales are roughly 5 percent of all cigars sales; cigars sales are dwarfed by categories like cigarettes, smokeless and vape. Looking around the TPE 2024 floor—where premium cigars probably occupied less than 10 percent of the space—the picture is remarkably similar. I’d also point out that it doesn’t seem like TPE needs cigar companies, so if the exhibitors want to increase attendance, it’s going to take more than just TPE to fix the problem, the same can be said about PCA. I’d argue step one is to find an alternative to a model that is reliant on retailers showing up to get discounts, something they clearly do not need to do.

Final Notes + Q&A

• The major question for 2024 as a whole could end up being what does the moving of PCA 2024, from its normal July date to late March 2024, do to the sales cycles?
  • It seems like many cigar companies might have already lost a turn in 2024 or are in the process of losing one. For those unfamiliar with retail, a turn refers to the cycle of buying products and then selling through all of them to the point when the retailer needs to reorder. Each time that happens is considered a turn. Cigar manufacturers seemed concerned that the turn they normally get this time of year hasn’t fully developed as many retailers are content to hold off on most ordering until late March in order to take advantage of PCA 2024 discounts. It’s still possible that the larger orders in March offset the lack of ordering now, but it’s unclear how a big order in late March doesn’t come with a complete offset of the big summer order.
  • One larger company told me: if you have a bad March/PCA 2024, you are down for the year. There’s just nowhere to make it up on the calendar. I agree with this assessment.
  • I suspect that in addition to big deals at PCA 2024 in late March, cigar retailers will get offered another round of discounts into the summer. For TAA retailers, there will then be another round of them in the fall. The race to the bottom continues.
  • Again, the general rate of sales versus imports is the larger factor here. If this was 2021, it wouldn’t matter what time of year all these trade shows were taking place.
• Even with some FDA news at the start of Day 1, people seem more concerned about the situation in Ecuador than they do about FDA.
• Bradley Rubin, now at STG, had a much more pleasant TPE 2024 than he had TPE 2023. Last year’s TPE 2023 kicked off with news that Alec Bradley—the company founded by his father—had announced that it had sold to STG. Bradley Rubin was the highest-ranking Alec Bradley representative at the trade show and left to answer most of the questions.
• There were a lot of people at TPE just looking for jobs. I’m not sure if we are in the process of major cutbacks in the cigar industry, but there’s certainly a narrative there if you want to run with it.

• Did PCA 2024 Being So Close Make a Difference? — Yes it did. I don’t know how much of a difference it made. If retailers are loaded up on inventory, I’m not sure it matters when PCA is.
• Will 2025 Be the Same? — I would guess retail attendance will rebound. Some people are going to choose to sit out of PCA 2025 due to it being in New Orleans. If you think PCA 2024 hurt TPE 2024, then the reverse seems to be in play for next year.
• What was your favorite new cigar at the show? — I smoked two cigars in Las Vegas, technically half of two different cigars. Neither were new, so I have no idea.

• What was your favorite new cigar accessory at the show? — The S.T. Dupont Le Grand Perfect Ping Fluro in orange. I think I’d buy one of the other Le Grand Perfect Pings—gold or palladium—but the black/orange combination is striking. An honorary mention to the Raching 3800B, a split-level cabinet-style humidor, meaning you could have a humidor with two different humidity zones.
• What’s the best thing you can say about TPE 2024? — TPE rented out all of Omnia, the night club at Caesars, for its party. You could smoke inside, etc. It was a much nicer (and more expensive) party than what I’d normally expect at a cigar trade show, though something that is increasingly becoming common at TPE.
• What’s the worst thing you can say about TPE 2024? — Quite clearly, retail attendance was a huge issue for the cigar side.

• Favorite Booth? — Day 1 Caldwell, undefeated.