It was the worst-kept secret heading into IPCPR 2019. Through a series of leaks, IPCPR’s plans to rebrand as the Premium Cigar Association (PCA) and launch a consumer component to the annual Convention and Trade Show known as CigarCon were made public. On Friday, June 28th, IPCPR Executive Director Scott Pearce formally announced these plans.
The content of the announcement focused on two things: 1) A rebranding of the IPCPR to PCA and subsequent expanded mission of the new organization; 2) Plans for CigarCon. These two items are intertwined in that the mission of the PCA is expanding to include consumers.
This change is being made because the PCA feels there is strength in numbers and adding consumers to the mix builds the numbers. PCA believes that strength in numbers will help the organization take a more pro-active role in the fight against the U.S. Food and Drug Administration (FDA). At the same time, a consumer event like CigarCon is meant to provide a signature event for all members of the PCA (Manufacturer, Retailer, or Consumer) while helping fund legislative efforts. However, a consumer event has been perhaps the most controversial topic that I’ve seen in terms the ten years I have been covering the Trade Show. While PCA is not proposing consumers be allowed in the trade show, they are planning on piggybacking a consumer event up against the trade show for 2020. This plan has been equally controversial.
Over the past five years, declining attendance has become a big story at the IPCPR Trade Show. The recent 2019 Trade Show was in my estimate the lowest attended trade show in my ten years of coverage. It has also led many to believe that change is necessary as well and including consumers could give the premium cigar industry the boost that is needed.
The June 28th announcement was intended to introduce the rebranding and mission of the organization as well as CigarCon. Unfortunately, the information would leak out about 9 days prior to the event, thus (in this author’s opinion) setting a negative tone going into the 2019 IPCPR.
In this article, I break down what was presented during Scott Pearce’s announcement and include information from a subsequent press conference for the media. The goal here is simply to identify some of the key points and assess them.
Audio to the announcement and press conference is included for reference at the end of this article.
The Rebranding was Necessary
One thing the premium cigar industry has been trying to do is position themselves as being different than other types of cigar makers. While I don’t think there was anything wrong with the name International Premium Cigar and Pipe Retailers (IPCPR), I do believe the streamlined name is going to be much more effective.
There has been some controversy about eliminating “pipes” from the name, it is important to realize that when you go to an IPCPR (now PCA) Trade Show that the majority of exhibitors are from the premium cigar space. In the press conference with the media after the announcement, Executive Director Scott Pearce drew an analogy to the NRA. NRA stands for National Rifle Association but is meant to include other firearms such as handguns.
Pearce pointed out that there has been some confusion in meetings on Capitol Hill because the “CPR” part of “IPCPR” has been confused with first responders. Unfortunately, I’m not sure PCA will not create confusion. PCA also stands for Presbyterian Church of America or Porsche Club of America and these items show up highly ranked in a google search.
With now a consumer component being added to the mission of the organization, the “Retailers” portion of the name has been dropped. This is a little riskier in that retailers have been the foundation of this organization for 87 years. In a way its double-edged sword, and ultimately if this is going to succeed, the retailers’ needs and problems are going to have to be addressed. My concern is the CigarCon event could take away from addressing those needs.
One interesting note, in the inaugural issue of the new PCA Magazine, Pearce commented how the rebranding issue actually came up during the interview process. Basically, one can infer this is something that was put in motion long before Pearce came on board.
The New Logo Works
The logo is simple, but I think it sends an effective message. While I really liked the old Indian logo, the new leaf logo has some meaning and it gives the PCA an ability to use the logo to demonstrate what the industry is all about.
According to the PCA: the green in the logo represents the tobacco fields where the leaves are grown that are eventually used in premium cigars; the brown represents the curing of those leaves, and the gray represents the burning of those produced by consumers.
In the end, the logo represents an easy message for not just the PCA but anyone associated with premium cigars to deliver.
It’s time for the PCA to start playing offense
How many times have we heard that the trade associations are too much in react mode and the response is often slow? We heard it with the SCHIP tax, and we heard it when the Deeming Regulations came down with the U.S. Food and Drug Administration (FDA). In the announcement, Pearce made the point that for many years, the IPCPR had been strictly in defense mode, but it was now time to go on the offensive.
During this segment, Pearce talked about strength in numbers, and that adding a consumer component to the organization’s mission this will put them in a better position to generate offense. He also felt CigarCon could be a stage to demonstrate that strength in numbers.
While I agree strength in numbers is a good thing, there are some concerns I have in terms of “mustering the troops.” For starters, communication with the membership is going to be key. While there have been some signs by the IPCPR over the past year of being more open with communications, there are still times they have been silent or slow to react on topics. Tobacco 21 and Flavored Tobacco in particular have been two examples of that. In particular, I was quite surprised there wasn’t a swift communication to retailers when former FDA Commissioner Dr. Scott Gottlieb announced he was going after flavored tobacco. A ban of flavored tobacco represents a large percentage of sales to many retailers and I felt a more immediate response should have been made.
Another example was the silence by the organization once news of PCA and CigarCon leaked out before the announcement. I personally think PCA needed to be more transparent once the announcement came out prematurely.
In order to play offense, PCA is going to have to develop a stronger and more agile set of communications going forward. Political dancing here is not something that is going to lead to a more energized base to play the “offense” described.
Becoming a Full-Service Organization
This was also something I was encouraged about. This Fall, PCA will roll out a new website that will also feature a collaborative component for members, but I think there are some more exciting things in the future.
PCA also has a new publication – PCA Magazine. While I always thought the IPCPR did a good job with their magazine, I’m even more impressed with the quality of the work of the PCA magazine. To me, this looked as good as any industry trade publication I have seen.
There is a new series of tools and resources that will also combine to form an integrated learning program – something that I think had been missing from the IPCPR. It will include a portal that will allow retailers to look up sales reps. On paper, this portal seems like a great idea, but I’m not sure how practical it will be, nor how encompassing it will be.
The ipcprlegislative.org site will be combined into the new PCA site. I like consolidating this and it helps support a full-service organization model
PCA says it will provide industry news. Recently the IPCPR website has started to aggregate this from the key media partners. Hopefully, that will continue to be the strategy going forward and the PCA will not try to tackle this on their own. Between Cigar Coop, Halfwheel, and Cigar Aficionado I’d like to think as a whole we’ve got this covered pretty well.
CigarCon: The Consumers are Coming!
I was hoping to hear the CigarCon was not going to be announced for 2020, but it appears PCA is moving full-steam ahead on this. Introducing any type of organizational change is difficult enough, but incorporating a component that has been one of the most controversial topics in the cigar industry over the past ten years is a huge risk.
Pearce pointed out the purpose of CigarCon is to use the proceeds to fund legislative efforts. A number floating around as a goal is to bring in 4,500 consumers to CigarCon. One interesting note is that in order to participate in CigarCon, a consumer must be a member of the PCA.
It was also mentioned during the announcement about “the time was right” to introduce a component like CigarCon. The dismal attendance of the 2019 IPCPR Trade Show is certainly something of great concern. While I can see a point of shaking things up, I’m still not sure the cigar industry is ready for this. This is too much of a hot potato in an already divided industry.
The Proposed Logistics of CigarCon
One of the arguments I’ve heard against CigarCon revolves around logistics. Two common things being brought up are price sheets in view of consumers and booth design changes to support consumers. While I have some logistical concerns, these are not among them and it’s a weak argument by those against CigarCon.
In the end, if a financial model can be developed where its a win-win, then these two concerns will go away. Many companies change booth designs a lot, so ifor many companies, this is just something else that needs to be done. As for the price sheets, just put them away.
Ironically, while many retailers complain of consumers being on the Trade Show floor for business, they don’t seem to have a problem doing business at the old Circle Bar or Bar Luca. For years, I’ve heard how there is business “done at the bar after hours”, but it’s funny there isn’t any concern of price sheets or consumers (who very much are present at these bars) in that setting. Either the business angle at the bar is exaggerated or there is a double standard.
When it comes to the schedule proposed, this is something I have some concerns with. The proposed high-level schedule is as follows:
Day 1 – Pre-Event Learning/Seminars and a VIP Dinner
Day 2 – CigarCon – about 6 hours
Days 3 – 5 Trade Show – expanded to 8 hour days
If you look at actual selling hours, assuming the Trade Show expands to 8 hour days, the selling hours will be reduced from 25 to 24. Even if they add in an extra hour to keep 25 hours, there are still some problems. For starters, the manufacturers are still paying for 4 days of booth space. One of those days is Day 2, which will be CigarCon and not a selling day. As someone who has been going to Trade Shows, Expos, and Conventions for over 30 years, I can tell you no matter what, the last day is always going to be slower. It should not be as abysmally slow like it was at the 2019 IPCPR, but it still will be slower.
PCA and Pearce believe the extra hours will make up for it and (in the press conference) used the revised 2018 schedule due to the Convention Show fire as an example. I believe the fire was a unique circumstance and that human nature to leave town as early as possible will ultimately still hurt sales on the proposed final full day.
The Retailers Role in CigarCon
This is perhaps the part I least understand about CigarCon. CigarCon is not an event where consumers are going to be let loose on the floor, but something that is being done in collaboration with retailers.
For starters, tickets are going to be only sold through brick and mortar retailers. Pearce mentioned in our press conference that while they will implement some sort of an incentive program, retailers will not be able to profit from this. Much of this has to do the fact that the proceeds made on CigarCon will go to fund the legislative battles, but without profit for the retailers, I just don’t get this planned model. There is no better incentive to a retailer than profit, and without that part of the equation, I see few retailers going out of their way to sell tickets. With a goal of 4,500 attendees, this is going to be very difficult through the current planned model.
On top of that, retailers are essentially being asked to chaperone their customers on the show floor. While some retailers may like this experience, ultimately I think there will be a lot of retailers uncomfortable or unwilling to do this. I also think there is a huge risk to the retailers who choose not to support CigarCon in that if a competitive retailer across town is supporting it, there is a risk of customers floating to a competitor.
The idea is that the “retailer chaperone” model will also help move consumers in and out of booths to prevent log-jams at booths. On paper, this sounds easier than actually being put into practice.
There was also talk of a model where retailers can use consumers as input into getting a sense for what is “new” at the show. PCA talked of an App that would easily allow consumers to snap pictures from CigarCon and send them to their local retailer. While the app might be new, this really isn’t a completely new concept. As a media person, I’m constantly asked by retailers “what’s hot” at the show. When I tell them, most of the time I get answers such as “That brand never sells well at my store”, “I don’t like the sales rep”, “the price is too high”, or “It competes too much against brand XYZ which sells very well at my store.” In many of the retail shops I go to, I already hear consumers give input to brands as well – and usually, it doesn’t result in a retailer bringing in the product.
In the end, I think don’t think the time and effort a retailer will put forward will give them an ROI for such a model to work.
What is the ROI for the Manufacturers to participate in CigarCon?
This should be stated up front: there have been plenty of manufacturers we talked to at IPCPR 2019 who have told us they are excited about the possibilities of what CIgarCon could bring to the cigar industry’s signature event. There have been some who have told us they have some concerns.
It was discussed at the media press conference that the financial model and budget have not finalized. I personally talked to several senior management people at larger companies who told me they question the financial viability of CigarCon. Until a firm and finalized business case can be made, I’m just not sure how many manufacturers will be “all in” when it comes to this.
David Garofalo, the owner of Two Guys Smoke Shop, United Cigar distribution, and The Cigar Authority podcast announced he was not going to PCA 2020. He is not the first to stop going to IPCPR over the years (Abe Dababneh, proprietor of Smoke Inn Cigars has not gone in recent years). While the argument can be made that Garofalo can certainly get show deals outside the show, Garofalo’s exit is still very much newsworthy. If more large spending retailers pull out, manufacturers are going to question the ROI of setting up shop at the Trade Show, and this could threaten the future of the Trade Show.
Despite the criticism of the leaks and an ill-timed email to the media that happened prior to the announcement, the newly-branded PCA must be given a huge kudos for inviting the media to a press conference following the announcement. This is something I have never seen IPCPR do in the past. The press conference was hosted by Scott Pearce, Scott Regina, and Rocky Patel. With such a controversial topic, this was not an easy thing to do and while I still have some questions, I personally appreciated this opportunity and hope this will be an annual thing as a part of the future of the Trade Show and CigarCon.
Overall I was disappointed by the small percentage of media members that asked questions. It seems to me I’ve heard more media members over the years complain about not getting IPCPR lunch tickets (which we did get this year) then ask questions about the future of our trade organization.
Our very own Bear Duplisea asked a question early on about early access to the show. While personally, I’ve complained a lot about the fact that media cannot technically still ask for cigar samples at the Trade Show, the issue of early access is in fact a bigger problem. Early access to the show makes it easier for media members to get photography in as well as get a lay of the land. There is an irony that consumers, media, and retailers are all getting the same access. It’s also unfair that the only way media can get early access is to buy booth space on the show floor. This is especially true since PCA still has concerns about media interfering with the business of the trade show (specified in the ill-timed email to media), and early access would be a solution to alleviate some of these concerns. The good news is Scott Pearce sounded very open to working with us on this, and I have confidence he will work with us on this going forward.
While PCA and CigarCon was a big story for IPCPR 2019, there was a bigger one – it was the terrible attendance for our industry’s signature event. While many will say that the problem was the proximity to the Independence Day holiday, I think that’s an easy excuse. The photo below was taken one hour into Day Four (about 10am )of the 2019 IPCPR Trade Show. The fact that the trade show floor looked like a ghost town says it all. There is no way to sugar coat this – PCA/CigarCon aside, IPCPR 2019 was a complete embarrassment for the premium cigar industry due to the attendance. I don’t say this lightly. I am a huge fan of the IPCPR Trade Show and I know a lot of hard work goes into putting it on. I want to see it become the world-class event I know it can be.
What this tells me is that change is needed, and I give credit to the newly-branded PCA for taking the bull by the horns. The Trade Show as we know it is broken – and it needs fixing. Personally, I’m just not sure CigarCon is going to lead to more spending by retailers at the Trade Show portion. In fact, I’m now questioning whether it can be fixed. Bottom line, the industry cannot go status quo as we know it.
Overall I think the vision going forward with the PCA is solid, but I don’t have the confidence that CigarCon will deliver from both an execution and ROI standpoint the way the cigar industry hopes for. Going down the road, it might be that the Trade Show is antiquated – especially since brands like Cigar Marketplace will now allow retailers to take advantage of show specials early electronically.
It might be that the Trade Show transforms entirely into a consumer-driven event, and while I can MMQB the plan, part of me wonders if that might be our best hope for our industry having a world-class signature event.
Listen to the Announcement and Press Conference
The audio for the June 28th announcement and subsequent press conference for the media is below (Apologies for audio issues, please listen at higher volume. Video was not included here.)
Photo Credits: Cigar Coop
Great information and honesty. Irv CigarBroker
JEFFREY J MOUTTET
Great write-up, Coop and solid assessment of the relevant issues. As a retailer who has taken numerous groups to Nicaragua, I can say the PCA has never tried to chaperone a group of grown men who paid good money to go somewhere. This portion will be a nightmare for retailers, IMHO. As to the rest, trying to keep an open mind until I see actual details. Keep up the great work!
Thanks for the truth. I am owner of Xavier’s Cigar Lounge in Hallandale Beach FL. I have attended the trade show for the last 6 years. I also attended this years show and it was definately low turnout. Not very many retail stores from the South Florida mkt. At all yet it is a huge market. For next year I am not willing to babysit customers who attend day one next year, In fact I might not even go next year. The vendors were stingy and looked miserable to be there. I think other exjibiting vendors got more samples for themselves then we the retailer did. I take these samples seriously and let my customers try them unlike most. Not sure what you can do to fix this poor attendance not only by me the retailer but the manufacturer as well. I think you are pricing the boutique brands out if the trade show. And I t seems to be getting worse. Maybe better show pricing for the manufacturer would increase the representation of many more brands. The smaller brands just cant afford to attend your show. I think that hurts you as a whole. Just some honest feedback.
I found it very concerning that the financial model for CigarCon had not been worked out in advance before the announcement. My questions at the retailer Q&A concerning the financial impact were answered poorly. I question how a decision could have been made to go forward with CigarCon without a detailed financial plan developed. You can’t make a decision of this magnitude without understanding the financial impact on the PCA, manufacturers and retailers.
Further, I think the case for CigarCon was made poorly. I do not have enough information to determine if I think it is a good or bad idea. As such, I am not ready to offer a firm opinion on that, however, a change of this magnitude for an organization generally needs a crisis to drive it through. In no way was a strong case made. We received somewhat nebulious reasons like involvement and funding the FDA fight. We deserve real data. We should have been provided financial results of the PCA for last year, detailing the amount spent fighting the FDA – The PCA had a significant loss last year. We should have been provided projections for future years of PCA revenue and expense. If there is a future funding issue projected, we then should have been taken through a path of items considered and why CigarCon is the solution. There should have been projections on how CigarCon actually would help the retailers & manufacturers in future years. There was nothing of any substance presented to drive consensus that CigarCon is needed or makes sense. I believe all the angst could have been avoided and our path forward galvanized if an appropriate level of analysis and communication was presented.
Minor detail, but if you trying to create a new brand, why have the “PCA” in the actual logo be different font from the “PCA” on the magazine cover. These little things matter, particularly with establishing a brand. I see it as sloppy.